Corporate adviser - acquirer
A UK subsidiary of a Finnish agrochemicals business was performing poorly and in the absence of additional support was likely to become insolvent with the pension scheme falling into the Pension Protection Fund. A German industrial turnaround investor was interested in acquiring the business provided the pension scheme risks could be managed. The transaction would offer the trustees of the scheme the potential for a new much-improved covenant compared with the alternative of admission to the PPF.
Role
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Act for the German acquirer and assess the risks presented by the pension scheme
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Liaise with the trustees to ensure that the value of the proposed covenant was recognised
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Put in place a funding agreement that provided short term flexibility for the acquirer to support the turnaround process
Results
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The trustees recognised the value of the acquirer's proposal and agreed a suitable funding plan
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The transaction was able to proceed and the UK subsidiary became a solvent employer with an improved covenant
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A claim on the PPF was averted
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