NZECO Supports International Buyer Access EU 17m
Page updated 18 Mar 2010
A New Zealand designed and constructed, walk-through aquarium has quickly become one of the biggest talking points in Istanbul. Capable of housing 15,000 sea creatures, it is one of Europe’s largest walk-through aquarium and is located in the basement of Europe's biggest shopping mall. It is a successful example of leading-edge technology and skills performed by Auckland exporter Marinescape, and supported by the New Zealand Export Credit Office (NZECO).
Although Marinescape may fly below the radar in New Zealand they have become an international name over the past 25 years in the specialised field of aquarium design, development, construction, operation and maintenance. With 21 projects completed in NZ, Australia, Brunei, Singapore, Malaysia, Hong Kong, Thailand, China, UK, Kazakhstan, Vietnam and Russia, over 150 million people have visited Marinescape’s aquariums.
Ian Mellsop, the founder and Managing Director of Marinescape, spent three years planning and arranging this Istanbul aquarium project. “We needed a debt facility to support the equity raising”, Ian explains, “And it was impossible to find a bank prepared to fund a New Zealand contractor-led commercial aquarium project of this scale, as it was an entirely new business proposition in Turkey.”
“The NZECO credit support for the project was a significant breakthrough for us at a critical time, and enabled us to arrange the required debt funding from an international bank. Without this support, the project would most certainly have been lost to Marinescape and New Zealand.”
“As it has turned out, it has been a major New Zealand success story, with a significant portion of the project cost being repatriated to New Zealand, more than 20 New Zealanders being employed directly on the project, and many more indirectly.”
“Even more importantly, this project has established Marinescape in the Mediterranean/Middle East market, with the prospect of at least three more projects stemming directly from the Istanbul aquarium, which again may be supported by the NZECO.”
NZECO Support – Buyer Credit Guarantee
This is an excellent example of how the NZECO can play a key role in securing project debt funding from an international bank by guaranteeing an exporter’s performance as well as the project’s repayment risk. Carmen Moana, Manager of the NZECO, notes that “the NZECO worked closely with Marinescape, the project investors and the bank to successfully arrange the financing required for the project.”
“To be able to help NZ exporters provide prospective buyers’ repayment terms can be hugely attractive, especially to those based in developing countries where the cost and availability of finance may be limited. With a government backed guarantee at the table this may also motivate the financiers to be involved, extend the repayment terms, and lower the cost of capital, that allows the project to be more economically feasible.”
This deal involved the NZECO providing its Buyer Credit Guarantee to the financing bank, in order to provide them with the comfort to directly fund Marinescape during the aquarium construction period, as well as a multi-year loan to the Aquarium owners. Project finance transactions typically rely on the future earnings to repay the debt facility, and the NZECO is underwriting this repayment risk.
Read how the NZECO assesses, structures and executes a typical project finance transaction.
