The Firm represented Celulosa Arauco y Constitución S.A. (“Arauco”), together with its subsidiary Arauco Celulose do Brasil S.A., in a landmark financing totaling up to $2.195 billion to be used to finance the construction, development and operation of the pulp mill identified as the Sucuriú Project located in the municipality of Inocência, in the state of Mato Grosso do Sul, Brazil (the “Project”). The comprehensive financing consisted of two separate credit facilities:
(a) a term loan facility of up $1.225 million to be advanced by the International Finance Corporation and the Inter-American Investment Corporation under their A/B loan program, with the participation of JPMorgan Chase Bank, N.A., Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, Crédit Agricole Corporate and Investment Bank, The Hongkong and Shanghai Banking Corporation, Limited, Banco Santander, S.A., Bank of America, N.A., Bank of China Limited (Panama Branch), and China Construction Bank (Asia) Corporation Limited, as participants; and
(b) an export credit agency covered term loan facility of up to $970.0 million, with JPMorgan Chase Bank, N.A. as global coordinator, and JPMorgan Chase Bank, N.A., Banco Santander, S.A., The HongKong and Shanghai Banking Corporation Limited, and Crédit Agricole Corporate and Investment Bank, as joint mandated lead arrangers and Lenders, supported with a guaranty of Finnvera plc, the export credit agency of Finland.
The credit facilities include environmental, social, and governance provisions, aligning with IFC’s Performance Standards on Environmental & Social Sustainability and the World Bank Guidelines on environmental, health, and safety matters applicable to the Project.
The Project represents one of the world’s largest, state-of-the-art single-phase pulp mill developments. With an estimated total investment of approximately $4.6 billion, the Project will have the capacity to produce approximately 3.5 million tons of short-fiber pulp per year, supported by approximately 400,000 hectares of sustainably managed eucalyptus and biomass-based energy.
Arauco is a global company with more than 50 years of experience in producing and managing renewable forest resources. It is also one of Latin America’s largest forest plantation owners and one of the word’s largest producers of bleached and unbleached softwood kraft pulp, bleached hardwood kraft pulp and wood products in terms of production capacity.
The Simpson Thacher team included Juan M. Naveira, Jomar Vargas, Raissa Fini and Sofia Reizin (Latin America – Banking and Credit); and Michael Mann (Tax).