Sell-Side Advisory: Barcelona Metro Line 9 PPP, Spain

Line 9 is a landmark metro project for the Barcelona region which will ultimately connect the city centre with many of the city’s most important economic areas, including the port, airport and university district.  Upon completion, Line 9 will be the longest ‘driverless train’ metro line in Europe and is the largest infrastructure investment undertaken by the Generalitat de Catalunya with an estimated total investment of €6.9 billion.

Metro Line 9 construction works started in 2004. In 2008, IFERCAT, an agency of the Catalonian government, tendered out the construction and operation of the stations (not the track, systems or rolling stock) to the private sector under four concession contracts. (i)  Line 9 Section I, (ii) Line 9 Section II, (iii) Line 9 Section III, and (iv) Line 9 Section IV.  As of today, three of the sections (I, II and IV) have been awarded to different consortiums under PPPs concession contracts. Line 9 Section III remains pending to be awarded.

Over the course of 2 years, Rubicon was mandated on 5 separate occasions to sell equity interests in various different sections on behalf of major industrial sponsors who were involved in the original construction, including Iridium (Grupo ACS), OHL, Comsa-EMTE and Acsa Sorigué.  All assets were fully operational with strong yield generation, granted under long-term concessions with effectively availability-based payment schemes and remaining weighted average life of over 20 years.

As part of its scope of work, Rubicon managed the Due Diligence, Investor Development, Sale Process, Transaction Documentation and Closing of each sale.  It should be noted in particular that these processes were run at a time when financial markets and international appetite for equity deals in Spain and Catalonia was generally weak.  Notwithstanding this, Rubicon was able to generate significant interest and attractive returns for its clients through its ability to demonstrate to sophisticated financial investors both the inherent value in the assets and robust analysis regarding the economic situation and viability of the grantor.