A&O, Linklaters advise as Co-op unveils £1.5bn restructuring plan

Allen & Overy (A&O) and Linklaters have taken headline roles advising on the Co-operative Group’s £1.5bn debt restructuring that will see bondholders offered shares in the bank through a so-called ‘bail-in’.

Co-operative bank
Source: The Co-operative

A&O is taking the lead role for the Co-op, fielding a team led by partners including financial institutions head Alistair Asher, global restructuring and insolvency chief Mark Sterling, corporate partner David Broadley and capital markets partner Matthew Hartley.

Others advising are A&O building societies and mutuals head Richard Slynn and regulatory, tax and pensions partners Etay Katz, Vimal Tilakapala and Dana Burstow.

Insurance head Philip Jarvis, meanwhile, is leading on the plan to dispose of the Co-op’s general insurance business. 

Linklaters has taken a smaller mandate for the bank, details of which are unconfirmed. The magic circle firm’s team is led by banking and restructuring partner David Ereira.

Mark Sterling
Mark Sterling

Under the deal, announced today (17 June), £1bn will be contributed in 2013 and £500m in 2014 to plug the Co-Op’s capital hole.

Background to this deal:

A&O’s mandate from the Co-op follows its role for Britannia Building Society on its merger with the Co-op’s financial arm in 2009, on which corporate partner Richard Slynn led for Britannia. The Co-op went off-panel to instruct Slaughter and May corporate partner Simon Phillips (21 January 2009). Its panel firms at the time included Addleshaw Goddard, ­Pinsent Masons and TLT, although Addleshaws’ relationship was partly through partners Phillip Slater and Lucy Newcomb, who joined Reed Smith in 2009.

Newcomb has since left Addleshaws to become a teacher.

While Addleshaws remain on the panel following the 2010 review, the bank went off-panel by mandating the duo, now at Reed Smith, for its £950m debt refinancing last year (6 August 2012).

It is understood the panel has not been altered since 2010.

The Co-op’s unsuccessful attempt to acquire 632 branches from Lloyds Banking Group, which fell through earlier this year, saw instructions given to Clifford Chance corporate partners Hilary Evenett and Mark Poulton for the Co-op and Linklaters’ Jeremy Parr and Matthew Bland for Lloyds (19 July 2012).