Allen & Overy (A&O) has billed in excess of £10m for last year’s rescue of Drax Holdings, reaping nearly 80 per cent of the total over a six-month period.
The magic circle firm had around 150 lawyers acting for the senior lenders on the reorganisation of the owner of Western Europe’s largest coal-fired power station, which began in October 2002.
But following the withdrawal of US parent company AES from the process of reorganising the company’s £1.3bn debt mountain in mid-2003, Drax entered a six-month restructuring period, from June to December, during which A&O earned £7m.
The bumper job is reminiscent of the fee levels the firm earned on the mammoth Marconi turnaround, when A&O again employed over 100 lawyers for the debtor, earning an astounding £31m.
On this deal, Drax, as the debtor, also paid an estimated £6m for its law firm Norton Rose and around £2m for bondholders’ counsel Milbank Tweed Hadley & McCloy. International Power, once a potential buyer of Drax, paid Clifford Chance around £1m.
Finance and legal fees totalled £45m and included Slaughter and May, which first acted for AES and then Drax’s Jersey-based entity, and Cayman Islands firm Walkers.