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Corporate Update: Mongolia, NuStar, YES

July 2014

MONGOLIA

After a 5-month competitive procurement process involving 12 top-tier international law firms, Boies, Schiller & Flexner, in a representation led by Managing Partner Jonathan Schiller, was selected as international counsel for the Mongolian state-owned coal company Erdenes Tavan Tolgoi. The company holds the rights to develop the Tsankhi portion of the Tavan Tolgoi strategic coal deposit, near the Gobi Desert, one of the world’s largest untapped reserves with an estimated 6.4 billion tonnes of coal. With this selection, Boies, Schiller & Flexner becomes one of a select few foreign law firms to undertake substantial representation of Mongolian interests in the country’s burgeoning natural resources sector.

The project will establish and operate a best-in-class coal mine with modern integrated mining and processing technology, in accordance with national laws and international health, safety, and environmental best practices. Development will take several years and will require new infrastructure for coal extraction and processing, power generation and transmission, water supply, and rail transportation. The project is expected to result in the construction or improvement of public roads, schools, hospitals, housing, local government buildings, and community centers.

Boies, Schiller & Flexner’s work has three separate phases. The first will involve negotiation with foreign investors seeking to become joint venture partners in the project. The second will involve negotiation with the Mongolian government on behalf of the joint venture. The investors will agree to certain minimum investment commitments, environmental standards, and local employment and social investment, and will agree to pay certain taxes, royalties, and other fees to the government. In return, the government will ensure a stable and predictable legal structure. The third phase will involve advising the joint venture on international project financing to fund the project. Boies, Schiller & Flexner is also representing Erdenes Tavan Tolgoi on certain matters associated with its current mining contractors and offtakers.

The team of lawyers is headed by Mr. Schiller, with assistance from partners Robert Leung, Mike Huang, and Jonathan Sherman and associates Michael Anastasio, Lidia Frenkel, Joseph Eno, and Gloria Ho.

NUSTAR

When NuStar Energy disposed of its 50 percent stake in its asphalt joint venture earlier this year, it turned to Boies, Schiller & Flexner’s corporate group to handle the transactions. NuStar, which sought to continue its focus on its core oil pipeline and terminal businesses, completed the transfer of its equity interest in the business to its joint venture partner, an affiliate of the investment firm Lindsay Goldberg, in February. In connection with the transfer of the equity interest, the Firm assisted NuStar with amendments to its debt facilities, terminal leases, and oil supply contract with the joint venture, which was renamed Axeon Specialty Products.  NuStar, which has been a client of the Firm since 2009, sold an initial 50 percent stake in the asphalt business to an affiliated fund of Lindsay Goldberg in 2012. The asphalt business originally was purchased by NuStar in 2008. Partner Jason Hill, along with associates Michael Anastasio and Joseph Eno, worked on the transactions, with assistance from partner Robert Lia and counsel Ivan Mitev.

YES

Earlier this year, Boies, Schiller & Flexner represented Yankees Entertainment and Sports Network in connection with the sale of a 31 percent equity stake to 21st Century Fox. The YES Network televises New York Yankees baseball and Brooklyn Nets basketball, as well as other leading local and national sports-related programming. The transaction raised 21st Century Fox’s ownership in the YES Network to 80 percent from the 49 percent it had acquired in 2012. The Firm also represented the YES Network in connection with the 2012 transaction. Associates Russell Franklin, Lidia Frenkel, and Elaine Tapp worked on the most recent transaction.

CAITHNESS

In late April, the Firm assisted longstanding client Caithness Energy with the sale of development assets relating to a proposed 569 MW nominally rated combined-cycle power facility to be located in Riverside County, California, to an affiliate of Canadian power company AltaGas.  Partner Jason Hill and associate Joseph Eno worked on the transaction.