Davis Polk advised Sete Brasil Participações S.A. and Sete International GmbH in connection with a capital call credit facility in the amount of $1.25 billion. The facility will be used to finance the ongoing construction of 21 ultra-deep water drilling rigs to be built in several Brazilian shipyards, each costing approximately $950 million.
There are 28 rigs to be built and financed as part of the so called “Sete Brasil” project, each being chartered to Petrobras, a Brazilian national oil company. Petrobras requires the rigs for the exploitation of the sub-salt reserves discovered approximately five years ago in very large fields well below the “salt layer” under the sea bed, 200 to 300 kms offshore of the State of São Paulo in waters averaging 2,500 to 3,000 meters deep.
Sete Brasil Participações S.A. was recently established in Brazil for this specific project. Its shareholders include Banco Santander, Banco Bradesco, Banco BTG Pactual, two of the largest domestic pension funds, several international investment funds and Petrobras, which indirectly owns 10% of the capital.
The $1.25 billion capital call facility is being provided by a syndicate comprised of Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, Standard Chartered Bank, Bradesco BBI S.A. and Citibank, N.A. Sumitomo Mitsui Banking Corporation acted as administrative agent. BNY Mellon Serviços Financeiros DTVM S.A. acted as collateral agent.
The Davis Polk team that advised the Sete Group as to matters of English law comprised James Vickers, Stephen Hood and Gina Iungano. All members of the Davis Polk team are based in the São Paulo office.
