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News Sep 20, 2018

Acquisitions of Minority Equity Interests in South Field Energy

Shearman & Sterling advised various acquirers on their acquisitions of indirect equity interests in South Field Energy LLC in connection with a $1.3 billion project financing to build a 1,182 MW combined-cycle gas turbine power generation facility in Columbiana County, Ohio, U.S. (South Field Project).

On August 23, 2018, RS Global Capital Investment LLC (RSGC) (a joint venture between Development Bank of Japan Inc. (DBJ) and Showa Shell Sekiyu K.K. (Showa Shell)), Kyushu Electric Power Co., Inc. (Kyushu Electric) (through Kyuden International Corporation, its wholly owned subsidiary) and Shikoku Electric Power Co., Inc. (Shikoku Electric) each entered into a definitive agreement with an affiliate of Advanced Power AG (Advanced Power) for the acquisition of certain indirect minority equity interests in the South Field Project.

The transaction included:

1. RSGC’s acquisition of 27.2% equity interests.  RSGC is a joint venture between DBJ, a Japanese corporation that provides financing, investment, and consulting and advisory services in Japan and internationally, and Showa Shell, a Japanese corporation that refines and sells oil products worldwide.

2. Kyushu Electric’s acquisition of 18.1% equity interests. Kyushu Electric (TSE:9508), a Japanese company established in 1951, is one of the 10 electric utilities in Japan and primarily engages in electric power business in Japan and internationally.  Kyuden International Corporation is a wholly owned subsidiary and overseas the investment arm of Kyushu Electric. 

3. Shikoku Electric’s acquisition of 8.9% equity interests. Shikoku Electric (TSE:9507) is one of the 10 electric utilities in Japan that carry on the integrated process of generating, transmitting, distributing and selling electricity in their respective service areas.  Since its establishment on May 1, 1951, the company has been providing electricity service to more than four million people in Shikoku.

Advanced Power, NH-Amundi Asset Management, PIA Investment Management and an affiliate of Bechtel Development Company, Inc. also own equity interests in the South Field Project.

Advanced Power is a privately owned company established in 2000 to develop low-carbon and renewable electric generating projects in Europe and North America.  The company has more than 7,000 MW in operation, under development, construction or management in the United States and Europe.  South Field Project is Advanced Power’s third major infrastructure project in the United States in 3½ years.

Expected to be completed in the second quarter of 2021, the South Field Project will create approximately 1,000 construction jobs during its peak period and will produce enough electricity to power approximately one million homes.

The Shearman & Sterling team below was supported by visiting attorney Daisuke Matsui (New York-Project Development & Finance).

The Team