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10 CITY
Simpson Thacher called in after
takeover puts Pearl in the red
RESTRUCTURING
By Kit Chellel
PEARL Group has begun
talks to restructure £3bn of
debt, some of which was
used to buy rival Resolution
in 2008, with Simpson
Thacher & Bartlett winning
the mandate from the
insurane giant.
It is understood that
Simpson Thacher is acting
for Pearl after advising it on
the financing for its £5bn
acquisition of Resolution.
Finance partner Stephen
Short acted on that deal.
Ashurst represented the
banks, Lloyds TSB, Dresdner
Kleinwort and RBS, on
the Resolution deal after
Linklaters was conflicted
out. Both Ashurst and
Linklaters are in line for the
lenders’ counsel role, as Pearl
owner Hugh Osmond
considers his options.
Pearl Group built up
£2.2bn of debt to fund the
takeover of Resolution and
owes another £800m across
its business. However, the
debt is ringfenced from its
life assurance companies,
which have more than seven
million policyholders.
The structure of the
Resolution merger is being
investigated by the Financial
Services Authority
(FSA), alongside a separate
probe into the conduct of
former Resolution owner
Clive Cowdery and other
company directors.
It is understood that the
FSA wants to tighten the
rules on insurers’ capital
amid plummeting share
prices in the sector.
Dentons helps raise cash
for African power projects
PRIVATE EQUITY
By Margaret Taylor
DENTON Wilde Sapte is
advising on the raising of a
private equity fund that will
focus exclusively on power
and related projects in
Africa.
Funds and financial
markets partner Rosali
Pretorius led the Dentons
team, working alongside tax
partner Jeremy Cape.
The African Energy
Infrastructure fund, which
aims to raise $500m
(£354.05m), has been set
up as a joint venture
between investment bank
DEALS ROUNDUP
FRESHFIELDS SCOOPS
DUAL CATTLES ROLE
Freshfields Bruckhaus
Deringer won a double role on
the probe into subprime lender
Cattles’ finances, advising the
company as well as leading the
review. Last month Cattles,
DEAL OF
THE WEEK
Fieldstone and asset manager
Prescient Investment
Management. The African
Development Bank has
already taken a major stake
in the fund.
“The fund’s likely to invest
in some of the most important
projects that will be
vital for Africa’s development
in the future,” said
Pretorius. “The fund’s goal
isn’t just to generate an
attractive return for
investors, but also to
strengthen local capital
markets by investing in
companies that will provide
steady long-term returns for
their shareholders.”
which suspended three senior
executives including its finance
director, announced that its
annual financial results would
be delayed. An independent
forensic review led by Freshfields
and accountancy firm
Deloitte is now looking into the
Osmond: the Pearl Group owner is in talks to restructure £3bn debt REUTERS
Pearl’s takeover of Resolution,
which began as a
merger between Resolution
and Friends Provident,
called in a host of firms, with
rival bids from Standard
Life and, finally, Pearl.
Pearl turned to longstanding
adviser Freshfields
Bruckhaus Deringer, led by
financial institutions partner
Will Lawes, while Resolution
instructed Herbert
Smith corporate partner
Malcolm Lombers. Standard
Life called on Clifford
Chance while Friends Provident
turned to Linklaters
corporate partners David
Cheyne and Owen Clay.
Simmons & Simmons
was given a role by new
client Royal London Mutual
Insurance Society on an
agreement with Pearl to
fund part of its approach to
Resolution.
Weil gets Kaupthing Bank’s claim
against UK Govt off the ground
LITIGATION
By Katy Dowell
WEIL Gotshal & Manges
has scored a High Court
victory in the first step
towards forcing the UK
Government to revisit its
decision to put the UK arm
of Icelandic bank Kaupthing
into administration.
The High Court agreed to
the request for a judicial
review from the statecontrolled
Icelandic bank
last week.
Weil litigation partner
Matthew Shankland was
instructed to represent the
bank in its action against
finances. Freshfields dispute
resolution partners David Scott
and Ali Sallaway are leading the
review. Deloitte is not receiving
separate legal advice.
Freshfields is also advising
Cattles, with corporate partner
Gareth Stephenson leading.
the Government in January
after weeks of threats. The
action includes claims that
the decision contributed to
the bank’s downfall.
Kaupthing Bank also
contends that the actions of
the UK authorities were
unjust and illegal.
The Government seized
control of the UK arm,
Kaupthing Singer & Friedlander
(KSF), in October
2008 following a recommendation
by the Financial
Services Authority that
argued that KSF was unable
to honour its obligations to
customers.
The Treasury invoked
NABARRO WINS DATA
CENTRE SALE WORK
Nabarro has advised
longstanding client Electronic
Data Systems on the
acquisition of two Norwich data
centres from Aviva. Real estate
partner Belinda Solomon led
new banking powers to
transfer KSF’s £2.5bn of
retail deposits for 160,000
customers to Dutch bank
ING Direct.
In October, Iceland’s
government was told by
Lovells that taking direct
action against the UK Government
had little chance of
success. It decided instead
to support Kaupthing’s
action.
In a statement the bank
said it “hopes that promised
financial support will be
forthcoming from the
Icelandic government to
ensure that legal proceedings
can be continued”.
the team, working with
planning partner Joshua
Risso-Gill, construction partner
Penny Moore and tax partner
Nick Burt. Aviva used in-house
lawyers on the property aspects
and Clifford Chance for the
services agreement.
THE LAWYER
23 MARCH 2009
Skadden
advises
American
Apparel on
Lion’s share
PRIVATE EQUITY
By Julia Berris
TWO US firms have secured
the lead roles on American
Apparel’s sale of an 18 per
cent stake to private equity
house Lion Capital.
Regular American
Apparel adviser Skadden
Arps Slate Meagher & Flom
is advising the US retailer
on the deal, which will see
Lion Capital pump $80m
(£56.65m) into the
company. Skadden partners
Jeff Cohen, David Reamer
and David Eisman are
leading the team.
Lion Capital is being
advised by Simpson
Thacher & Bartlett partner
Katie Sudol. This is the first
public deal the firm has
advised Lion Capital on
since the UK private equity
group launched in the US
in 2008.
“It’s a very exciting new
relationship,” said Sudol.
“Given the economic conditions
we see there being a
lot of private equity activity
of this type in the near
future.”
Cohen said: “We’ve been
working with American
Apparel since the summer
of 2007. We’ve been involved
in a lot of their debt financing
work since last year.”
In 2007 Skadden advised
American Apparel on its
acquisition by Endeavor
Acquisition Corp, with
Eisman and Cohen leading
the team as relationship
partners for the retailer.
Commenting on Lion
Capital’s investment, Cohen
said: “This really does provide
American Apparel with
the flexibility and ability to
address prospects for
growth for the future.”
CONTACTS
Corporate: Margaret Taylor
or Kit Chellel
Real estate: Luke McLeod-Roberts
Litigation: Katy Dowell
Finance: Julia Berris
Email: forename.surname
@thelawyer.com
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