PF Archive

Portugal's roads programme goes on trial

16 12 2009

The Portuguese Accounts Court has added the Litoral Oeste and Algarve Litoral road concessions to its list of projects that have been preliminarily rejected ratifying visas. In total, the Court has now rejected five of the six financed new road concessions, with only one concession outstanding – Baixo Tejo. The Eu600 million ($904.9 million) Litoral Oeste concession is sponsored by a Brisa-led consortium and closed at the end of February. The deal was structured with front ended availability payments to enable the debt to be fully amortising rather than featuring refinancing risk as in the non-Brisa mini-perm deals of the other concessions. The Eu350 million Algarve Litoral is sponsored by Iridium, Edifer and Dragados and closed at the end of April 2009. The Accounts Court's rejection of Algarve Litoral and Litoral Oeste follows its rejection of Douro Interior, Transmontana and Baixo Alentejo. While the Court's rulings are preliminary and have no legal bearing on the project financings, if the Court's decisions are upheld as final rulings it will be an event of default that leaves Estradas de Portugal (EP) to repay full breakage costs to sponsors and banks. On Tuesday 17 November, EP presented its appeal to the Accounts Court with a blow-by-blow account of how the timeline of indicative bids and BAFO stages coincided with the collapse of Lehman's and the global financial meltdown. EP presented data such as stock...