Argentina: Posco Argentina Secures $668 Million Loan with Alfaro Abogados Advising on Argentine Law
Following the financing obtained in 2023, Posco Argentina S.A.U. obtained on April 19, 2024, a new loan amounting to up to $668,000,000 from BNP Paribas Seoul Branch; Citibank N.A. Hong Kong Branch; Crédit Agricole Corporate and Investment Bank; JPMorgan Chase Bank, N.A.; The Hongkong and Shanghai Banking Corporation Limited (HSBC); Bank of America; and The Export-Import Bank of Korea (KEXIM), to finance the construction and development of the second phase of the "Sal de Oro" project: a lithium project located in Salar del Hombre Muerto, in the provinces of Catamarca and Salta in Argentina. This loan represents a crucial milestone for Posco in consolidating its lithium business in Argentina.
The project was acquired by Posco in 2018 for $280,000,000 and represents one of the most important lithium projects in the country. Additionally, on January 25, 2023, Posco obtained financing of $411,900,000 for the construction and development of a lithium plant as part of phase 1 of the project, including financing for infrastructure and certain imports of goods.
The funds from this loan will be used for the import of capital goods and the construction of a factory that will annually produce 23,000 tons of lithium carbonate, with construction estimated to be completed by August 2025.
The financing was structured under a common terms and conditions contract for two different loan agreements: K-SURE Covered Facility Agreement and KEXIM Covered and Direct Facility Agreement.
The loan is guaranteed by Posco Holdings Inc., a company incorporated in South Korea and one of the world's leading lithium producers, and by K-Sure and KEXIM, the Korean export credit agencies (ECAs).
On April 25, 2024, the first disbursement of the Loan in the amount of $42,000,000 was made.
Tavarone, Rovelli, Salim & Miani and Milbank LLP advised Citibank N.A. Hong Kong Branch; Crédit Agricole Corporate and Investment Bank; JPMorgan Chase Bank, N.A.; The Hongkong and Shanghai Banking Corporation Limited (HSBC) and Bank of America, as lead arrangers and lenders; KEXIM, as ECA and lender; K-SURE, as ECA; BNP Paribas Seoul Branch, as coordinator of the ECAs, lead arranger and lender; BNP Paribas Singapore Branch, as KEXIM agent and K-Sure agent; and BNP Paribas New York Branch, as agent for global financing, agent for KEXIM financing, and agent for K-SURE financing, under the laws of the Republic of Argentina and the State of New York, respectively.
Noe Benetti, from BNP Paribas, said: "Tavarone has been instrumental in achieving this financing. The ECA coordinator relied on the local law firm's knowledge of Argentine regulations to structure resilient financing."
Alfaro Abogados advised Posco Argentina S.A.U. under Argentine law.
Lawyers from the lead arrangers, lenders, ECAs, BNP Paribas Seoul Branch, as coordinator of the ECAs, BNP Paribas Singapore Branch, as KEXIM agent and K-Sure agent, and from BNP Paribas New York Branch as agent for global financing, agent for KEXIM financing, and agent for K-SURE financing.
Alfaro Abogados
Partners: Andrés Villarreal and Federico Palavecino.
Tavarone, Rovelli, Salim & Miani
Partner: Julieta De Ruggiero
Associates: Eduardo N. Cano, Ramiro Catena, Juan Pablo Baumann Aubone, and Micaela Aisenberg.
Milbank LLP
Partners: Alexander Borisoff and David Gartside
Associates: Chloe Kim, Anthony Scott, and Brian Youn.
Lawyers for Posco Argentina S.A.U.