Herbert Smith and Weil Gotshal & Manges have won roles in the administration and subsequent rebirth of Cobra, the popular curry-house beer.
Stephen Wilkinson
Cobra went into pre-packaged administration with debts of around £100m, to re-emerge under the joint ownership of Canadian brewer Molson Coors and Cobra founder Lord Bilimoria.
Weil advised Cobra in the run-up to being placed into administration, appointed by joint administrators Zelf Hussain, David Chubb and Colin Haig at PricewaterhouseCoopers.
The Weil team was led by London managing partner Mike Francies and finance partner Stuart Hills.
Clyde & Co corporate partner Philip Rogers acted alongside Weil on behalf of the Cobra shareholders, in particular Lord Bilimoria.
Molson Coors, which picked up 51 per cent of the new company for £14m, turned to Herbert Smith, led by corporate partner Stephen Wilkinson.
The firm has acted for Molson Coors, which produces well-known brands including Carling, Coors Light and Grolsch, for around three years. Molson Coors also uses Kirkland & Ellis and Cleary Gottlieb Steen & Hamilton in the US.
It is understood that Linklaters acted for hedge fund Och-Ziff, one of Cobra’s major secured creditors.
Lord Bilimoria put Cobra up for sale last year but struggled to find a buyer.
The company was put into pre-packaged administration last month and the Cobra brand transferred to a new company, majority owned by Molson Coors with the remainder owned by Lord Bilimoria.
The process means that unsecured creditors, which are owed some £70m, will not receive anything. Secured creditors, including Lord Bilimoria, Och-Ziff and Bank Leumi, are expected to recoup around £20m.
Herbert Smith’s Wilkinson said: “The form on the transaction changed over time. It was only in the later stages that it became clear a pre-packaged administration would be necessary.”
Cobra has been hit by falling beer sales and made a loss of £15.9m in 2008.
Cobra’s sales have dropped because the quality of the beer has dropped significantly lately, it used to be a great beer but now it’s nowhere as good as its big rival Kingfisher.
Cobra sales have not fallen. On an annual basis, they are in 45% volume growth. It is the beer market in general that is in decline – in particular the On Trade. The Cobra liquid has not changed.