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DLA Piper Completes Financing for Third Bosphorus Bridge in Istanbul

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DLA Piper Turkey and YukselKarkinKucuk (YKK), the firm's Turkish arm, completed the financing for the USD 4 billion Third Bosphorus Bridge Project on May 21, 2014, acting for the sponsors, the Turkish IC Holding and the Italian Astaldi Group.  

The overall value of the investment amounts to approximately USD 2.9 billion (Astaldi has a 33% stake and IC Ictas a 67% stake), funded on a project finance basis with an 80/20 debt/equity ratio. The concession duration is for a period of more than 10 years, 30 months of which for construction activities and the remaining period for management activities. The project will be performed using the BOT formula (Build, Operate, Transfer) and involves the construction of a 1.4 kilometer long-span bridge to be used by road vehicles and trains to cross the Bosphorus Strait from Poyrazkoy in Asia to Garipce in Europe, as well as the construction of a section of the North Marmara Highway along the Odayeri-Pasakoy route. 

The Third Bosphorus Bridge will be the widest in the world, measuring 60 meters in width and housing 8 motorway lanes (4 in each direction), divided by two high-speed rail corridors of 1,048 meters. It will also be the longest suspension bridge and will achieve another first for its A-shaped pylons standing more than 320 meters tall. Commissioned by the Turkish Ministry of Transport, the works will be performed by a joint venture involving Astaldi and the Turkish company, IC Ictas, which is already working as Astaldi’s partner on projects currently in progress in St. Petersburg (the Pulkovo International Airport and the Western High Speed Diameter). 

DLA Piper describes the project as "one of the most important 'build-operate-transfer' projects in Turkey," reports that the deal is financed by 6 leading Turkish banks, and reports that "it is also one of the few projects in the Turkish market covered by a debt assumption of the Turkish Treasury. 

YKK Partner Muharrem Kucuk and DLA Partner Tamsyn Mileham and acted as local and international counsel on all aspects of the financing, including English-law governed finance documents, Turkish and English-law governed security documents, and an implementation contract direct agreement and debt assumption agreement entered into with the KGM administration and Treasury, respectively. Kucuk and Mileham were assisted by Senior Associate Ferda Dumrul, Associate Aslihan Ozbey and Trainees Neslihan Kasap and Emre Usca.


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