Payday for Stephenson Harwood after firm shares fee risk on two-year deal
10 September 2012 | By Joshua Freedman
22 July 2013
4 February 2014
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31 July 2013
20 January 2014
Stephenson Harwood is set to receive an uplift after completing a two-year deal for an energy client to which it charged more than half of the fees conditional on the transaction closing.
The firm advised Elcrest Exploration & Production Nigeria, a joint venture of Starcrest Nigeria Energy and Eland Oil and Gas, on the $154m (£96.5m) acquisition of a 45 per cent interest in Niger delta oilfield Oil Mining Lease 40 and Eland’s related £118m AIM admission.
Stephenson Harwood started work on the deal two years ago, with corporate partner Tony Edwards leading a 20-lawyer team. The firm was paid a small amount on a monthly basis but is set to receive most of its fees following the closing.
The deal was funded through the AIM listing, on which Mayer Brown London energy partner Robert Hamill and corporate finance partner Kate Ball-Dodd led for nominated adviser Canaccord Genuity.
Stephenson Harwood’s fees were largely dependent on the deal going ahead as there would have been minimal funds available had the AIM float not happened. Previous funding came from a private placement but these funds became unavailable after reaching a long-stop.
The stake was acquired from Royal Dutch Shell, which consulted an in-house legal team led by managing counsel Nike Olafimihan.
Edwards commented: “In today’s market clients do expect law firms to be prepared to assume a greater degree of risk around completion occurring. This deal was no exception. We were confident in the client’s ability to deliver and the overall result was a good one. There’s a greater sharing of risk with advisers. Where traditionally investment bankers were far more success-driven [in terms of fees], perhaps the law is having to move towards that position where clients are less prepared to bill in full on a monthly basis.”
Others in the UK firm’s team were energy partner Jeremy Sheldon and senior associate Judith Elgood.
While Mayer Brown fielded one team including Hamill, Ball-Dodd and associates Simon Allison and Frances Hull, Stephenson Harwood referred the international work for Eland to seven foreign firms, Covington & Burling, Norton Rose in Canada, BLC Chambers, Ogier, Bär & Karrer, Dillon Eustace and Minter Ellison. Eland also instructed Nigerian firm Streamsowers & Kohn.
The Covington team was led by London corporate partner Kristian Wiggert, while Toronto corporate partner Robert Eberschlag led the Norton Rose team.
Streamsowers & Köhn, which already had a relationship with Eland, fielded Chiagozie Hilary Nwokonko and Tamuno Atekebo, while Allen & Overy partner Lorraine Ball advised Standard Chartered Bank on a US$22m (£13.8m) bridge facility. Stephenson Harwood banking partners Nick Avery and David Lacey handled this matter for Eland.
For equity facility arrangements, Eland shareholder Helios Natural Resources instructed Vinson & Elkins City corporate partner François Feuillat, while Solstice International Investments, another investor, turned to corporate and commercial partner Daniel Oldfield at Laytons Solicitors.
Background to this deal:
Stephenson Harwood has been advising Eland since 2010, when it won a pitch after being approach by the company. Stephenson Harwood partner Nigel Porter knew Eland CFO George Maxwell from the latter’s time as commercial director at Vroon, which Porter advised. Eland was formed in mid-2009 by a team from Addax Petroleum, where they used Nigerian firm Streamsowers. Eland used Aberdeen and Inverness firm Stronachs in its gestation period before turning to Stephenson Harwood when major deals came onto the agenda.
Mayer Brown has an established relationship with Canaccord, which it has been working together with while advising the Afghan government on its mining industry (28 March 2011).