Cleary joins Slaughters' French ally on Franco-Belgian bailout of Dexia

Longstanding Dexia adviser Cleary acted for the Franco-Belgian bank. The team was led by corporate finance partner Laurent Legein and tax and securities partner Laurent Ruzette in Brussels and Paris corporate partner Amélie Champsaur.

Brussels antitrust and state aid specialist François-Charles Laprévote is also advising the bank on EU state aid matters, while Paris corporate finance partner Marie-Laurence Tibi is providing advice on amendments to the states’ guarantee and related legislative amendments.

Corporate partner Patrick Dziewolski at Slaughter and May French best friend Bredin Prat is advising France on the bailout, while Brussels-based Yves Herinckx, who left Clifford Chance earlier this year to set up independent arbitration practice Herinckx SPRL, is acting for Belgium.

Clifford Chance is also advising the Belgian state alongside Herinckx, with competition partner Johan Ysewyn and corporate partner Philippe Hamer in Brussels office comprising the team.

The deal comes as the bank’s financial results reveal that it posted net losses of €2.4bn (£1.9bn) in the first nine months of 2012. It will see France and Belgium inject €5.5bn into Dexia, with Belgium providing €2.9bn (£2.3bn) and France contributing €2.6bn (£2.1bn).

The bank will issue preference shares entitling both governments to obtain a preferential dividend, equivalent to around $7bn (£4.4bn), which will then be converted into ordinary shares. The proceeds of the recapitalization will then be used primarily to reinforce the balance sheet of Dexia Credit Local, Dexia’s primary remaining subsidiary,

The proposed terms of the recapitalisation will be submitted to a shareholders meeting and are also subject to approval from the European Commission. Following these approvals, it is expected that the deal will close by the end of the year.

Background to this deal:

Cleary is a longstanding adviser to Dexia, having advised the Belgian bank on its €6.4bn bailout by the Belgian government in 2008 and then again in 2010 as the state moved to acquire the bank’s retail arm (10 October 2011).

Before leaving Clifford Chance to set up his own firm earlier this year, Herinckx, along with Clifford Chance competition specialist Johan Ysewyn, advised the Belgian finance ministry on Dexia’s break-up at the end of 2011 (10 October 2011).

Bredin Prat has been acting for the French government in matters related to Dexia for some time (31 October 2011).