Firms set to cash in as Drax begins refinancing and IPO

The fee bonanza that was the 2003 restructuring of power giant Drax is set to restart as the company begins a programme of refinancing that will culminate in an IPO later this year.

Linklaters is understood to have been selected as counsel to Drax’s sponsor and financial adviser Deutsche Bank after participating in a beauty parade, which is thought to have included most of the City’s large firms.

Norton Rose has picked up the mandate from the company after acting for it during its restructuring. Allen & Overy (A&0) is also reprising its role for existing lenders.

As exclusively reported in The Lawyer (12 July 2004), A&O netted £10m in fees following the restructuring, while Norton Rose picked up £6m.

Drax was forced to restructure £1.3bn of debt in 2002 and 2003 in a complex process, which was made more difficult when US parent AES withdrew from the transaction in spring 2003. Norton Rose stepped in to complete the deal, replacing AES counsel Slaughter and May. The transaction included the listing of debt in Luxembourg and the Channel Islands.

Norton Rose corporate finance partner Laurence Levy is leading the work for Drax. He described the new transaction as much less complex now that the company is not distressed. It will entail refinancing and an IPO, planned for December 2005.

“We acted on the 2003 restructuring and we’ve been doing a lot of work since then,” said Levy. “We’re delighted to be doing this.”

Fellow Norton Rose partners Mark Bankes and Simon Currie are also involved.

Milbank Tweed Hadley & McCloy has been reappointed as counsel for Drax’s bondholders Greenhill. Other firms involved include Cayman firm Walkers and Jersey’s Mourant du Feu & Jeune, which will be advising Drax on offshore elements of the refinancing.