Allen & Overy is advising the Co-operative Group and the Co-operative Bank on the comprehensive plan announced on 17 June 2013 to generate capital for the bank and provide stability.
The group has agreed to support the capital requirements, which will involve:
- An exchange offer to investors in the bank’s subordinated capital securities; at least £1bn of Common Equity Tier 1 capital will be generated in 2013 from the exchange offer
- Capital commitment from the group, sourced from an issue of bonds by the group and the transfer of a significant minority equity interest in the bank to security holders; both will be effected through the exchange offer
- Contribution in 2014 of further £500m Common Equity Tier 1 capital by the group, to be committed on the exchange offer becoming effective
- Implementation of previously announced self-help actions from the bank
The Allen & Overy team has been led by Global Head of FIG Alistair Asher and senior finance partner Mark Sterling, with expert advice from Richard Slynn, head of A&O’s Building Societies and Mutuals practice.
Asher has been asked by the Co-operative Group to take on a key role in its new senior management team as group general counsel. He will therefore be retiring from Allen & Overy on 1 July 2013 after more than 34 years with the firm, 26 of which as a partner.
Additional support, and the core team that will advise the group and the bank through the execution of the exchange offer following Asher’s appointment, is being led by corporate finance partner David Broadley and debt capital markets partner Matthew Hartley. Regulatory, tax and pensions advice is being led by partners Etay Katz, Vimal Tilakapala and Däna Burstow respectively.
Head of the A&O insurance group Philip Jarvis is leading on the announced plan to dispose of the Co-operative’s general insurance business.
The group and the bank have been advised by UBS Investment Bank. The bank has additionally been advised by HSBC in relation to the exchange offer.