Offshore: Deals and cases Q2 2014
21 July 2014
24 February 2014
18 November 2013
16 July 2014
28 April 2014
24 February 2014
The latest offshore deals comprise a few firsts, including a groundbreaking hybrid mutual in Bermuda and the largest ever catastrophe bond issuance
African Risk Capacity Insurance Company
The African Risk Capacity Company is the first of its kind in Bermuda, valued at $135m (£79m). It is a specialist hybrid mutual insurance company intended to help African Union member states become more resilient to extreme weather events and protect insecure food populations in light of climate change.
Germany and the UK are founding members of the company and contributed the initial capital. Additionally, $55m will be provided via global reinsurers and weather risk markets to cover the risks it is taking on from the participating countries.
For African Risk Capacity Insurance Company: Appleby partners Brad Adderley and John Wasty, counsel Martin Ouwehand and associate Seth Darrell; Stroock Stroock & Lavan partners Conrad Bahlke and Tom Weinberger
Everglades Re catastrophe bond
Bermuda special purpose insurer Everglades Re issued a $1.5bn catastrophe bond, the largest such issuance in history. The bond will provide reinsurance coverage for Florida’s state-created property insurer Citizens Property Insurance.
The issuance was originally marketed at $400m but was significantly oversubscribed.
The catastrophe bond market helps insurers offset the risk of natural disasters.
For Everglades Re Ltd : Appleby partner Alan Bossin and associate Janine Carey
For Structuring agent and bookrunner Citigroup Global Markets : Sidley Austin partner Michael Madigan
Financial services information provider Markit listed on Nasdaq in June, raising $1.3bn after increasing the number of shares available.
The IPO values the company at $4.3bn, and is the fourth-largest in the US this year so far.
For Markit : Conyers Dill & Pearman partner Marcello Ausenda and associates Niel Jones, Chiara Nannini and Robert Alexander; Davis Polk & Wardwell partners Richard Truesdell, Kyoko Takahashi Lin, Michael Mollerus and Gregory Rowland; Ashurst partners Jonathan Earle, Paul Randall, Martin Rodgers, Sarah Watson and Richard Palmer; Gibson Dunn & Crutcher partner Jonathan Earle
For the underwriters, Merrill Lynch, Pierce Fenner & Smith, Barclays Capital, Citigroup Global Markets, Credit Suisse Securities, Deutsche Bank Securities, Goldman Sachs, HSBC Securities, JP Morgan Securities, Morgan Stanley, UBS Securities, BNP Paribas Securities, Jefferies, RBC Capital Markets, RBS Securities and TD Securities : Skadden Arps Slate Meagher & Flom partner David Goldschmidt
British Virgin Islands (BVI)
State Grid Overseas Investment notes issuance
7 May 2014
Chinese state-owned electric giant State Grid Corporation of China issued three sets of senior notes, all rated A+ by Fitch and valued at a combined $3.5bn.
The issuance saw the company, through investment vehicle State Grid Overseas Investment, issue $1.25bn 2.75 per cent notes due in 2019, $1.6bn 4.125 per cent notes due in 2024 and $650m 4.85 per cent notes due in 2044.
For State Grid Overseas Investment (2014) Ltd and State Grid Corporation of China : Walkers partner Kristen Kwok and legal manager Maria Lau; Herbert Smith Freehills partners Kevin Roy and Tom Chau, counsel Zhong Wang and associates Isaac Chen, Jin Kong and George Wu; King & Wood Mallesons partners Zhang Yongliang and Song Yanyan.
For the trustee : Mayer Brown JSM
BVI and Cayman
Nord Anglia Education IPO
22 April 2014
Cayman-domiciled, Hong Kong-headquartered international schools group Nord Anglia Education listed on the New York Stock Exchange in an IPO raising $350m.
The company also refinanced, through a senior secured $515m Term Loan B facility and $75m revolving credit facility which closed alongside the IPO. The Term Loan B is believed to be the largest such syndication to date for a company headquartered in Asia.
For Nord Anglia Education : Latham & Watkins partners Bryant Edwards, Eugene Lee, Marc Jaffe and Ian Schuman
For the IPO’s underwriters, led by Credit Suisse, Goldman Sachs and JP Morgan and the refinancing’s joint lead arrangers Goldman Sachs, JP Morgan, Credit Suisse and HSBC : Ogier partners James Bagnall and Ray Wearmouth and senior associates Mark Santangeli and Christopher Newton; Milbank Tweed Hadley & McCloy partners Joshua Zimmerman, Rodney Miller and Lauren Hanrahan, counsel Mandy Wong and associates Benjamin Miles, Jessica Zhou, Mindy Allen, Theo Hart, York Wu, Stanley Boris and Laura Larsen.
First closing: 9 April 2014; second closing: 15 May 2014
Oil and gas private equity firm EnCap Investments formed and registered EnCap Flatrock Midstream Fund III-C LP, a Cayman Islands exempted limited partnership feeder to Texas limited partnership EnCap Flatrock Midstream Fund III.
The fund, which had a target of $2.25bn, was oversubscribed and closed on $3bn of capital commitments from limited partners including pension plans, family offices, insurance companies, endowments and foundations in four months. The fund will invest in oil and gas storage and transportation companies in the North American energy sector.
For EnCap Investments : Appleby partner Simon Raftopoulos and associate Samuel Banks; Thompson & Knight partner Anna Marie Dempsey
Saudi Electricity Company sukuk offering
The Saudi Electricity Company issued a $2.5bn sukuk, reportedly the Middle East’s largest Rule 144A sukuk. The offering comprised both a 10-year and 30-year maturity term – the latter being the longest duration for any senior unsecured sukuk to date.
For the Saudi Electricity Company : Walkers partners Tim Buckley and Daniel Wood; Allen & Overy partners Atif Hanif, Sachin Davé, Jamie Durham and Zeyad Khoshaim, senior associate Cieren Leigh, and associates Tracy Tong, Anne Korenblit, Edana Richardson and Hosam Ghaith.
For joint lead managers Deutsche Bank and HSBC : Latham & Watkins partners Harj Rai, Nomaan Raja and Lene Malthasen and associates Lee Irvine, Muhannad Alnajjab, Ibrahim Soumrany and Theo Kalic
China-headquartered online sales company JD.com, domiciled in Cayman, listed on Nasdaq in May. The IPO consisted of the sale of 93,685,620 American depositary shares, each representing two Class A ordinary shares of the company and valued at $19 each. The offering raised $1.78bn and is believed to be the largest IPO for a Chinese company listing in the US.
For JD.com : Maples and Calder partner Greg Knowles, of counsel Richard Spooner and associate Sophie Yu; Skadden Arps Slate Meagher & Flom partners Julie Gao and Jonathan Stone; Zhong Lun partners Wu Peng, Scott Yu, Anthony Zhao and Jia Haibo
For the underwriters, Bank of America Merrill Lynch and UBS Securities : Davis Polk & Wardwell partners James Lin, Li He and John Paton; Commerce & Finance (partner undisclosed)
23 May 2014
Private mining venture X2 Resources launched a Guernsey closed-ended investment vehicle which raised $2.5bn of committed equity capital funding and up to a further $1.25bn of conditional equity capital funding from a group of five investors.
X2 is in talks with a further select group of potential investors seeking to benefit from opportunities in the natural resources arena.
The company was launched by the former CEO and chief financial officer of Xstrata – Mick Davis and Trevor Reid – following that company’s merger with Glencore.
For X2 Resources : Ogier partner William Simpson and senior associate James Cooke; Freshfields Bruckhaus Deringer partners Julian Makin and Mark Watterson and associate Oliver Crowley
Cayman, Guernsey & Jersey
Ogier Fiduciary Services MBO
18 June 2014
Channel Islands firm Ogier sold its fiduciary services company Ogier Fiduciary Services in a management buyout backed by Electra Partners. The deal was valued at £180m and saw Electra invest £82m of equity.
For the Ogier Group : Addleshaw Goddard
For Ogier Fiduciary Services management : Macfarlanes partner Stephen Drewitt and senior solicitor Justin Hope
For Electra Private Equity : Mourant Ozannes partners Mike Williams, Robert Duggan, John Lewis and Helen Ruelle, managing associate Matthew Shaxson, senior associates Nathaniel Luker, Victoria Cabot and Pamela Doherty and associates Jane Rosen and Rebecca Clark; Clifford Chance partner David Pearson
For the lenders, HSBC, Lloyds, RBS, Babson Capital Europe and Alberta Investment Management : Walkers partners Alex Carus, Jonathan Heaney and David Collins , senior associate Chinyin Johnston and associates Christophe Kalinauckas and Mark Galazzi; Appleby partner Jeremy Berchem, counsel Matthew Wrigley and senior associate Chet Pohl; Linklaters partner Edward Aldred and managing associate Andrew Jennens
Endiang acquisition of ARC Group
Canadian-controlled investment holding vehicle Endiang Holdings acquired ARC Group, the holding company of investment consultancy Asset Risk Consultants. The group is licensed in Guernsey and Jersey to provide consulting services to funds and private portfolios.
The value of the transaction was not disclosed.
For Endiang Holdings : Mourant Ozannes partners Gavin Farrell, Mark Chambers, Helen Ruelle and Jessica Roland, managing associate Matthew Shaxson, senior associates Helen Wyatt, Victoria Cabot, Carla Benest and Carly Parrott, associates Mathew Du Val and Bonnie McPartland and consultant Kate Dewsnap; Miller Thomson partners John Campbell and Ormonde Benson
For Asset Risk Consultants Ltd : AO Hall
Heritage sale to Arthur J Gallagher
21 May 2014
Heritage Group sold Guernsey-based Heritage Insurance Management to Illinois-headquartered insurance brokerage and risk management services firm Arthur J Gallagher & Co. The terms of the transaction were not disclosed.
For Arthur J Gallagher Artex Risk Solutions : Bedell Cristin partners Mark Helyar and Kate Ovenden, and associates Richard Sharp, Sukh Chana and Emma Corbin
For Heritage Group : Collas Crill partners, Ian Kirk and Jason Green, senior associate Wayne Atkinson and associate Kit Hobbs
HKT loan financing
Hong Kong Telecommunications (HKT) entered into a $2.5bn secured loan financing to acquire CSL New World Mobility from Telstra Corporation and New World Development. This will result in the creation of the largest mobile telecoms operator in Hong Kong, with the combined market share of the two operators being roughly 31 per cent.
For HKT : Linklaters partner Nathalie Hobbs
For the arrangers, Standard Chartered and HSBC : Appleby partner Jeffrey Kirk and senior associate Rupen Shah; Clifford Chance associate James Tong
Isle of Man
Acquisition of Rational Group
12 June 2014
Amaya Gaming Group entered into an agreement to acquire privately held Oldford Group, the parent company of poker business owner and operator Rational Group. The aggregate purchase price is $4.9bn. The transaction will result in Amaya becoming the world’s largest publicly traded online gaming company.
Rational runs online poker platforms PokerStars and Full Tilt Poker, which together have more than 85 million registered players on desktop and mobile devices.
For Amaya Gaming Group : Cains directors Richard Vanderplank and Tristan Head; Greenberg Traurig partners Gary Epstein, Lorne Cantor, Yosbel Ibarra, Gary Cooper, Drew Altman and Cindy Davis; Osler Hoskin & Harcourt partners Eric Levy, Antonella Penta and Manon Thivierge.
For Oldford Group : Appleby partner Simon Harding and counsel Kyle Sutherland;
Herzog Fox & Neeman partners Gil White, Alan Sacks, Harriet Finn and Ran Hai, and associate Aviram Hazak
Intu Properties acquisitions
2 May 2014
Intu Properties acquired a 50 per cent interest in Merry Hill shopping centre in the English West Midlands and 100 per cent interests in Derby’s shopping centre and Northern Ireland’s Sprucefield retail park from Westfield for a total of £867.8m.
Intu acquired the interests in the three properties from Westfield and certain joint venture partners, and the purchase price was funded by a £500m rights issue and new debt facilities. Westfield’s 50 per cent stake in Merry Hill will be acquired for £407.7m.
For Intu Properties : Ogier partner Raulin Amy, managing associate Richard Daggett and associates Amy Galley, Emily Barette and Kylie Maguire; Macfarlanes partners Ian Nisse and Graham Gibb; Linklaters partners William Buckley, Adam Fogarty and Jeremy Stokeld and associate Dan Lawrie
For Westfield : Mourant Ozannes partner Gareth Rigby; King & Wood Mallesons SJ Berwin partners Michael Goldberg and David Fitzgerald, and associates Laura Byrne and Matt Dickerson; Freshfields Bruckhaus Deringer partners Colin Hargreaves, Caroline Stroud and Martin Hutchings and associates Pay Nassiri, Alison Wald and Holly Insley
For lenders : Mourant Ozannes partner James Hill
Heritage Oil takeover
Heritage Oil was taken over by Energy Investments Global Ltd, a wholly owned subsidiary of Al Mirqab Capital. The takeover was implemented by way of a Jersey court-sanctioned scheme of arrangement and valued Heritage Oil at about £924m. Anthony Buckingham, Heritage Oil’s CEO, retained a 20 per cent interest in Heritage Oil following completion of the takeover.
For Energy Investments : Ogier partner Raulin Amy; Mishcon de Reya partner Saul Sender
For Heritage Oil : Mourant Ozannes partners James Hill and Mark Temple, senior associates Jon Woolrich and Andrew Salisbury, and paralegal Naomi Garton; McCarthy Tetrault partner Robert Brant
Avago acquisition of LSI Corp
A consortium of lenders led by Deutsche Bank provided facilities for Avago Technologies and affiliates to acquire LSI Corp for $11.15 per share in an all-cash transaction valued at about $6.6bn.
The deal creates a diversified semiconductor market leader with some $5bn in projected annual revenues.
For the lead arranger, Deutsche Bank Securities, Barclays Bank, Citigroup Global Markets, Merrill Lynch and Pierce Fenner and Smith : Appleby partner Malcolm Moller and senior associate Anjana Ramburuth; Simpson Thacher & Bartlett partner Patrick Ryan
For Avago : Conyers Dill & Pearman; Latham & Watkins partners Christopher Kaufman, Luke Bergstrom and Anthony Richmond
For LSI : Skadden Arps Slate Meagher & Flom partners Amr Razzak, David Meister, Sean Shimamoto, Alec Chang and Frederic Depoortere
Agrenco Ltd v Credit Suisse
Supreme Court of Bermuda
Chief Justice Kawaley
Judgment date: 10 April 2014
Credit Suisse Brazil (Bahamas) Ltd brought a cross-claim against Agrenco Ltd in respect of its claim to approximately $60m outstanding under a loan agreement. The issue was related to insolvency proceedings in Brazil.
Chief Justice Kawaley found that an August 2013 ex parte injunction preventing Credit Suisse from presenting a winding-up petition against Agrenco should be discharged.
For the plaintiff, Agrenco Ltd : Conyers Dill & Pearman director Ben Adamson
For the defendant, Credit Suisse Bahamas (Brazil) Ltd : Appleby counsel Martin Ouwehand, Counsel (Bermuda)
(1) Anzen Ltd, (2) Lund 3 APS, (3) Travellab Global AB v Hermes One Ltd
Eastern Caribbean Court of Appeal
Chief Justice Pereira, Justice Blenman, Justice Webster
Judgment date: June 2014
In March Mr Justice Bannister, sitting in the High Court of the BVI, dismissed an application by the defendants to stay proceedings brought by Hermes One in a shareholders agreement dispute. The respondents had asked for the proceedings to be stayed in favour of arbitration.
In June the Court of Appeal upheld Bannister J’s decision, holding that an arbitration clause that provides for an option to arbitrate does not create an immediately binding contract to arbitrate – it only becomes binding when the option is exercised by making the referral to arbitration.
For the appellants, Anzen Ltd, Lund 3 APS, Travellab Global AB : SCA Creque senior associate James Dixon
For the claimant/respondent, Hermes One : Forbes Hare partner Robert Nader and associate Sam Robertson
Fairfield Sentry Ltd v Migani & Ors
Lords Neuberger, Mance, Clarke, Sumption and Toulson
Judgment date: 16 April 2014
This case, started in the BVI by Fairfield Sentry against former investors, is an attempt to recoup funds paid out before redemptions were suspended when Madoff’s funds were revealed as a Ponzi scheme.
Fairfield brought an appeal to the Privy Council against an Eastern Caribbean Court of Appeal judgment on one point, with a counter-appeal brought by the investors on a separate point. Both were decided in favour of the investors, with four claims conjoined into a single hearing.
Mr Justice Bannister in the BVI High Court, and the Eastern Caribbean Court of Appeal, previously ruled that documents issued by the fund’s administrator and investment manager were not binding certificates of the fund’s net asset value. The investors appealed this point before the Privy Council and won.
Meanwhile, Fairfield Sentry appealed the lower courts’ decision that the redeeming investors had given “good consideration” for the redemption payments made to them by surrendering their shares in the fund and, accordingly, the fund could not seek restitution of those payments. The Privy Council ruled that the BVI High Court and the Court of Appeal had made the correct decision.
For the appellant/respondent, Fairfield Sentry (in liquidation) : 4 Stone Buildings’ Jonathan Crow QC, leading Maitland Chambers ’ Andrew Westwood and Brick Court Chambers ’ Stephen Midwinter, instructed by Forbes Hare partners William Hare and Alistair Abbott and associate Sinead Harris; Macfarlanes partner Barry Donnelly and associate Will White
For the respondents/appellants Lombard, Odier & Cie & Ors : 3 Stone Buildings’ David Lord QC, instructed by Ogier senior associate Claire Goldstein and associate Robert Christie; Blake Lapthorn partner Sarah Rees and associate Alex Shirtcliff
For the respondents/appellants Credit Suisse London Nominees & Anor : One Essex Court ’s Laurence Rabinowitz QC and Maximilian Schlote, instructed by Maples and Calder BVI managing partner Arabella di Iorio and associate Ben Mays; Herbert Smith Freehills partner Christopher Foster
For the respondents/appellants Quilvest Finance Ltd & Ors : Brick Court Chambers’ Mark Hapgood QC and Alan Roxburgh, instructed by Harneys head of litigation Phillip Kite and partner Kissock Laing; Latham & Watkins partners John Hull, Oliver Browne and Christopher Harris
For the respondents/appellants UBS AG New York & Ors : Gibson Dunn & Crutcher partner Charles Falconer QC, instructed by O’Neal Webster partner Paul Webster QC
Mobile Peak Holdings Ltd
The petitioners presented a petition under Section 238 of the Companies Law in relation to MobilePeak Holdings, the surviving entity in a merger. The petitioners were seeking to be paid fair value for their shares, having disagreed with the merger.
Prior to the final hearing the parties entered into settlement discussions and agreed a compromise.
In the absence of relevant rulings in Cayman, the petitioners’ case for determination of fair value relied principally upon Delaware authorities and, to a lesser extent, rulings in other Caribbean jurisdictions.
For the petitioners : Appleby partner Tony Heaver-Wren; Broad & Bright
For MobilePeak Holdings Ltd : Sinclairs
Scot Foith et al v The Proprietors, Strata Plan 436 et al
Grand Court of the Cayman Islands
Mr Justice Henderson
Judgment date: 30 May 2014
The claimants bought strata lots in a resort owned by Ritz Carlton, thus becoming subject to by-laws restricting the right to rent out their premises. They challenged these provisions before the High Court.
Mr Justice Henderson found the provisions were “valid and enforceable”.
The legality of such provisions, which apply in many resorts in Cayman, has never been tested before. This case sets a precedent under Cayman law and is of importance to developers, condominium owners, resorts and the real estate industry.
For the plaintiffs, Scot Foith et al : HSM Chambers’ senior counsel Kenneth Farrow QC
For the first to third defendants, Strata Corporations : Forbes Hare partner Christopher Young and associate Christina Kish
For the fourth defendant, the owners of the Ritz Carlton Hotel and Resort : Conyers Dill & Pearman partner Nigel Meeson QC and associate Hilary Brooks
In the matter of the R and RA Trusts
Guernsey Court of Appeal
Michael Beloff QC, Sir John Nutting QC, Sir Michael Birt
Judgment date: 20 May 2014
This was an application for leave to appeal by L against a decision of the Deputy Bailiff whereby he refused the application of the trustees of certain family trusts for orders requiring disclosure of specified information by some of the beneficiaries of those trusts, namely the first, second, third and fourth respondents. L had supported the trustees’ application but had also submitted her own application for more far-reaching disclosure orders against the first, second and fourth respondents which the Deputy Bailiff had also dismissed.
The court confirmed that in the exercise of its supervisory jurisdiction over trusts it has the power to require the beneficiaries of a trust to provide information to the trustees. It is believed that this is the first time orders of this nature have been made.
For the applicants : AO Hall partner Alison Ozanne; Clifford Chance partner Jeremy Kosky
For the second respondent : Babbé partner Ian Swan
For the third respondent : Mourant Ozannes partner Jeremy Wessels and senior associate Sharon McHugh; Harcus Sinclair
For the fourth respondent : Ogier partner Simon Davies, managing associate Amanda Mochrie and associate Sam Dingle; Withers partner Dawn Goodman and associate Sarah Aughwane
In the matter of an application for an administration order in respect of Esquire Realty Holdings Ltd
Royal Court of Guernsey
Bailiff Richard Collas
Judgment date: 16 April 2014
This was the first occasion on which the Guernsey courts have had to consider an application for a company to be placed into administration in the context of an intended pre-packaged sale by the administrators of the company’s assets immediately thereafter.
In his judgment the bailiff provided important guidance as to the type of information that the court would consider necessary when considering such applications. In addition, judicial comment was made as to the importance of making privacy orders in relation to such applications to protect sensitive and confidential commercial information and reduce the risk of distress to those who might otherwise be affected by news of insolvency events orders commonly used in trust matters but not used often in the corporate context.
For the applicant, Lloyds Bank : Bedell Cristin partner Alasdair Davidson and associate Jon Barclay; Hogan Lovells
For Esquire Realty Holdings Ltd : Ogier partner Mathew Newman
Isle of Man
Exclusiva General Inc v Vintage Holdings Ltd
High Court of Justice of the Isle of Man
His Honour the Deemster Doyle
Judgment date: 23 June 2014
The court appointed provisional liquidators in recovery of substantial debt from Isle of Man company Vintage Holdings. A beneficiary disputed the winding-up order.
The court held that, despite the fact the claim is disputed on genuine and substantial grounds that would ordinarily result in the dismissal of the winding-up proceedings, it would, in the exceptional circumstances prevailing, adjourn the winding-up proceedings pending determination of that dispute in the Isle of Man High court.
For the claimant, Exclusiva General Inc : Appleby partner Mark Holligon and associate Mark Emery; Stephenson Harwood partner Louis Flannery and associate Nick Pike
For the provisional liquidators, Vintage Holdings : Appleby partner Mark Holligon; Stephenson Harwood partner Stuart Frith
For the third, fourth and fifth parties, Julija Goncaruk, Targus Holdings Ltd and Vorko Ltd : Quinn Legal director James Quinn; Mishcon de Reya partner Michael Armstrong and associate Samantha Kakati
Crociani, Foortse, BNP Paribas Jersey Trust Corporation Ltd & Appleby Trust (Mauritius) Ltd v Crociani & Ors
Jersey Court of Appeal
Michael Beloff QC, Sir John Nutting QC, Nigel Pleming QC
Judgment date: April 2014
The Court of Appeal in Jersey has delivered a landmark ruling in the first occasion on which an order for interim costs has been sought before the Jersey Court
The court dismissed the appeal, finding that interim costs should be paid and upholding the decision of the Royal Court not to stay proceedings on the basis of forum non conveniens.
The decision considered issues including exclusive jurisdiction clauses and the meaning of the term ‘forum for administration’ in trust instruments.
For the appellants, Edoarda Crociani, Paul Foortse, BNP Paribas Jersey Trust Corporation Ltd and Appleby Trust (Mauritius) Ltd : Carey Olsen partner Robert MacRae
For the respondents, Cristian Crociani, A and B : Bedell Cristin partner Anthony Robinson and associate Paul Lewis