The London office of Weil Gotshal & Manges has advised Nikko Principal Investments in connection with the first ever securitisation of European port revenues.
The securitisation raised £305m, which was used to refinance Nikko’s acquisition of the ports of Tees and Hartlepool in the North East.
The firm won the work in a pitch against Allen & Overy (A&O) last year. Nikko’s last securitisation was the Road Chef deal a couple of years ago, when it instructed Freshfields Bruckhaus Deringer, so the work is a breakthrough for Weil Gotshal.
Lead partner Jacky Kelly says: “This is the first whole business securitisation we’ve done in the UK. We’ve only had corporate expertise in the last two years and before that this would not have been possible.”
Most securitisation deals only require finance expertise, but there have been three stages to Nikko’s transaction.
Last year, Weil Gotshal advised Nikko on the banking and corporate aspects of its acquisition of Powell Duffryn, the parent group of the ports. It then advised on Powell Duffryn’s conversion to a private company and on the reorganisation of the group into discrete ports and engineering businesses.
Once the two sides of the business had been separated, the revenues generated by the ports were securitised on a secured-loan basis.
Kelly says: “The idea is not to pool the assets but to keep them up and running to pay for the deal.”
The financing was paid for partially by the securitisation of the ports and partially by the disposal of the engineering businesses.
Appointed lead manager Deutsche Bank was advised by Norton Rose for acquisition finance and by A&O for the securitisation.
The deal follows similar securitisations of whole businesses, including City Airport, Madame Tussaud’s and Rank Hovis McDougall, where Freshfields and A&O have tended to be the main advisers.
Kelly says: “Whole business is flexible as you don’t have to isolate the assets. We hope to get more work on the back of the successful conclusion of this deal.”
Kelly led the Weil Gotshal team, with partner Andrew Norwood providing tax advice, head of the London office Mike Francies providing corporate advice and banking done by partner Helen Burton.
International capital markets partner Paul Bedford led the A&O team.