March 19, 2020
Latham & Watkins has advised an ad hoc group of first-lien lenders to Doncasters Group on the successful completion of its financial restructuring. The ad hoc group comprised of both US and European based investors, including Barings, CVC Credit, Corre Partners, Credit Suisse Asset Management, Franklin Templeton, Lord Abbett, and Owl Creek.
The transaction was implemented by way of a UK scheme of arrangement (with U.S. Chapter 15 recognition) and a pre-packaged administration sale to a newly incorporated group owned by Doncasters’ first lien and second lien lenders. The parties were required to obtain clearance from the Committee on Foreign Investment in the United States (CFIUS) as the transaction was subject to the then-in effect pilot program regarding US businesses with critical technology. The Latham team demonstrated its highly regarded capabilities in the areas of national security reviews subject to CFIUS jurisdiction, navigating numerous novel issues to achieve CFIUS clearance on an expedited basis.
The transaction also involved the disposal of non-core assets as part of a wider divestment strategy, an amendment, restatement and re-tranching of the group’s existing debt facilities into a new senior term loan facility and holdco PIK facility, and the introduction of a new £70 million ABL Facility to fund a pay-down of the first-lien debt prior to completion and for general working capital purposes. The financial restructuring has removed c. £900m of debt from the operating group’s balance sheet and provides improved liquidity to support the next phase of the group’s strategy.
The transaction required seamless coordination between Latham teams across practices and jurisdictions, including the UK, the US, and Germany. The team was led by London restructuring & special situations partners Yen Sum, Jennifer Brennan and counsel David Wallace, with associates Bhav Parekh and David Cooper-Parry. Corporate and equity matters were led by London partner Huw Thomas with associates Natalie Brown and Adam Czernikiewicz. London partner Catherine Drinnan and associate Patrick Ritchie led on employment and pensions matters, while London partner James Chesterman, with associates Tracy Liu and Chen Yang Sia, advised on banking aspects. The team in New York was led by restructuring & special situations partners Mitchell Seider and Adam Goldberg, with associate Brett Neve. Partner David Teh, counsel Jonathan Wry and associate Aditi Sharma advised on banking aspects; and Washington D.C. partner Les Carnegie, counsel Rachel Alpert and associate Andrew Galdes led on CFIUS and ITAR regulatory clearance. German advice was provided by restructuring & special situations partner Frank Grell, banking partner Sibylle Muench, and associates Martina Eisgruber and Rizwan Ahmad.