Top finance deals in 2002

The Lawyer team picks the best deals of 2002


Marconi’s debt restructuring

Marconi: Allen & Overy (David Morley, David Frauman, Randal Weeks, Gordon Stewart)
Bondholders: Bingham McCutchen (James Roome)
Barclays Capital and HSBC: Clifford Chance (Mark Campbell, Nick Frome)

The complex, high-profile process of sorting out Marconi’s huge debt problems defined the year for hundreds of lawyers.

The fees said it all: a weekly payment of £500,000 to advisers and an estimated £16m of total billings split between Allen & Overy (A&O), Bingham McCutchen, Clifford Chance and PricewaterhouseCoopers (PwC). And it is not over yet. Two weeks ago, Marconi postponed the publication of its interim results for a second time as it submitted to its creditors revised proposals for the restructuring of its £4bn debt. It is now awaiting approval of its syndicate of 27 lending banks, and an informal committee of bondholders, which are owed approximately £4bn, for changes to the agreement in principle, which was signed in August.

It involves a complicated debt for equity swap, handing ownership of Marconi to its lending banks, including Barclays and HSBC, and the bondholders, advised by Binghams.

The restructuring has been long-drawn-out to say the least. Bearing in mind that Marconi issued its first profits warning in July last year and spent five months chasing its tail over an unsuccessful refinancing plan, time and money have been wasted in spades.

At one point A&O’s team swelled to 100 lawyers and included big-hitters such as Marconi relationship partner and global head of banking David Morley. Linklaters has been another firm to benefit, racking up fees acting for a small number of banks, including those connected to Marconi’s employment share ownership plan.

At Clifford Chance, swathes of lawyers, led by Mark Campbell and Nicholas Frome, saw months of negotiations come to naught while racking up major fees. Their role for Barclays Capital and HSBC on the restructuring helped propel the firm to winning Finance Team of the Year at The Lawyer Awards in June.

NTL recapitalisation

NTL: Travers Smith Braithwaite (Jeremy Walsh, Spencer Summerfield)
Bondholders: Fried Frank Harris Shriver & Jacobson (US) and Cadwalader Wickersham & Taft (UK)
JPMorgan Chase: Clifford Chance (Mark Hyde, Geeta Khehar, Mark Liscio)

Travers Smith Braithwaite’s appointment on NTL’s $20bn (£12.7bn) recapitalisation early this year was a coup for the firm. As The Lawyer went to press, the final touches were being made to a $10.9bn (£6.9bn) debt-for-equity swap involving a record corporate bond default.

The UK cable group has a longstanding corporate relationship with Travers, but the firm did well to keep hold. Travers offers a small but well-respected restructuring team, although even with all hands to the pumps it was not big enough – the lateral hire of Berwin Leighton Paisner partner Keith Bordell was made partly to cope with the workload.

According to NTL relationship partner Spencer Summerfield, just over 10 per cent of Travers’ total workforce has been involved. NTL is expected to emerge from bankruptcy any day now.

The firm has sewn up most of NTL’s corporate work over the last few years, although Baker & McKenzie got a look-in on a $2bn (£1.27bn) IT outsourcing agreement last year.

Sanitec’s high-yield bond issue

BC Partners: CMS Cameron McKenna (Ashley Painter) and Thacher Proffitt & Wood for US law (Walter Van Dorn)
Goldman Sachs and Merrill Lynch: Latham & Watkins
HypoVereinsbank: Clifford Chance

In an exceptionally busy year for private equity, finance capability became increasingly important for winning instructions as venture capitalists struggled to get more debt into buyout structures.

With this in mind, it is worth singling out CMS Cameron Mc-Kenna’s appointment on a major piece of work with BC Partners.

In a pleasing twist, Camerons scooped the role advising BC Partners on Sanitec’s high-yield bond issue on the back of its alliance with German member CMS Hasche Sigle Eschenlohr Peltzer Schafer.

Dickson Minto advised on the initial transaction when Sanitec was acquired from Tripod, but the boutique has limited finance capacity so Camerons was brought in to do the high-yield debt.

Camerons partner Ashley Painter took the lead role. The deal involved a e260m (£166.5m) issue used to refinance the e245m (£156.9m) junior facilities incurred in the leveraged buyout of Sanitec, a Finnish company that markets bathroom ceramic products.

In tough market conditions, the deal was nevertheless four times oversubscribed and the interest rate went down to 9 per cent.

To Camerons’ credit, the firm won the role for BC Partners despite the house’s virtually exclusive relationship with Dickson Minto in the UK. This was the second time that Camerons has been brought in to advise on a large capital markets transaction.