Latham Advises New Look on Comprehensive Restructuring and Recapitalisation

Cross-practice team advises New Look in its comprehensive balance sheet and operational restructuring and recapitalisation via a company voluntary arrangement and English scheme of arrangement.

November 19, 2020

Latham & Watkins has advised New Look, a leading UK multichannel fashion retailer, on the successful completion of the Group’s financial and operational restructuring. The completion of the complex transaction is a significant milestone for the New Look Group, enhancing the Group's financial strength and operational flexibility in order to implement the Group's strategy. 

The Latham team worked closely with New Look’s management team and its other advisers to structure and facilitate the multi-faceted restructuring, which included a re-basing of the Group's lease obligations under its store portfolio and a switch to turnover based rents through an English law company voluntary arrangement ("CVA"), an English law scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme") (with parallel Chapter 15 recognition proceedings in the United States) in order to implement a debt for equity swap in respect of the Group's £440 million senior secured notes resulting in significant deleveraging, the injection of £40 million new capital and an extension of the Group's working capital facilities in order to ensure that the Group has no near term debt maturities.  The transaction also included a parallel competitive sales process. 

The CVA that was successfully approved as part of the operational restructuring was notable in the number of stores (almost 500 stores and over 350 individual landlords) and the turnover rent nature of the compromise. The Scheme effected a deleveraging of the Group's indebtedness by releasing the Group's £440 million senior secured notes in exchange for non-voting equity within the Group and a £40 million shareholder loan . All of the noteholders were also invited to participate in an amount equal to their pro rata share in a £40 million new money facility and voting equity in the Group. The Scheme was approved by an overwhelming majority of the noteholders.

The Group together with the unanimous support of its lenders under its working capital facilities, agreed to amend and extend all of its working capital facilities to ensure that the Group had no near term maturities. 

Latham teams across practices and offices were led by London restructuring & special situations partners Yen Sum, Jennifer Brennan and Jessica Walker, with associates Hugo Bowkett, Tristram Gargent, Bhav Parekh, and Husni Almousli. Corporate and equity matters were led by partner Kem Ihenacho with associates Alex McCarney, Harry Redford, and Warren Wellington, while partners Francesco Lione and Adrian Chiodo, with associates Tamryn Jensen, Lewis Atherton, Chris Devine, Philipp Hagenbuch, and James Mac Sweeney, advised on finance aspects. 

London partner Quentin Gwyer and counsel Michael Beanland, with associate Danni Davies, led on real estate aspects, while London partner Oliver Browne, with associates Duncan Graves and Amaryllis Bernitsa led on litigation aspects.  Regulatory advice was provided by London partner Carl Fernandes, with associates Brett Carr and Sherryn Buehlmann, while anti-trust advice was provided by partner Jonathan Parker, with associates Alexandra Luchian and Salar Alambeigi. Partner Sarah Gadd, with associate Adam Ray, handled employment and incentive matters, while partner Sean Finn, with associates James Leslie and Magdalena Nasuto, advised on tax matters. Intellectual property matters were led by partner Deborah Kirk and associates Grace Erskine and Claudia Sousa. The US Chapter 15 recognition proceedings were led by New York partner Adam Goldberg, with associates Tianjiao Li in New York, Jeramy Webb in Chicago and Benjamin Roth in Los Angeles.

 
 
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