Gibson Dunn resolves Polestar debt

Gibson Dunn & Crutcher and Allen & Overy (A&O) have pulled off a landmark European debt restructuring for printing company client Polestar.
The London office of the Los Angeles firm scooped the work advising the company when it ran into difficulties at the start of the year. Polestar is owned by private equity group Investcorp, a longstanding client of Gibson Dunn London partner Paul Harter.
Polestar has finally worked out a solution to a long-running battle with its bondholders over the restructuring of its debt. The bondholders were represented by Andrew Wilkinson, managing partner of the London office of New York firm Cadwalader Wickersham & Taft.
The company was originally financed through an £810m leveraged buyout, which became one of the largest European deals to run into debt problems. It is being seen as a test case for European debt restructurings.

“This is probably the first successful European high-yield debt restructuring”
Andrew Wilkinson, Cadwalader Wickersham & Taft

Wilkinson said: “This is probably the first successful European high-yield debt restructuring – it's a restructuring basically between the company, the banks, the shareholders and the bondholders.”
Gibson Dunn called in A&O partner Ian Field to advise on the restructuring and insolvency aspects of the deal. A&O has acted for Investcorp in the past.
A Clifford Chance team, led by head of insolvency Mark Hyde, acted for the banks, which were led by JP Morgan Chase.
The eventual solution involves Investcorp injecting £74.3m in cash to buy back bonds and provide extra liquidity. Polestar will buy back existing junk bonds with a face value of £140m, and bondholders will receive new 10-year bonds with a face value of £21m. The bonds will only pay interest when they mature.
Hyde said: “We were retained by the bank group in early September – it's not a matter we were involved in at the origination stages. It involved a lot of people here, as there were any number of ways we might have achieved the restructuring.
“We certainly needed quite heavy involvement from the financial restructuring and insolvency group, and input from corporate lawyers. At various stages there were almost 15 people on it.”
Polestar is the largest independent printing company in Europe, publishing titles that include supplements for The Sunday Times, The Sun and News of the World.