Allen & Overy LLP is advising Co operative Group Limited (the Group) and The Co operative Bank plc (the Bank) on the comprehensive plan announced yesterday to generate capital for the bank and provide stability.
The Group has agreed to support the capital requirements which will involve:
- An Exchange Offer to investors in the Bank’s subordinated capital securities. At least GBP1bn of Common Equity Tier 1 capital will be generated in 2013 from the Exchange Offer.
- Capital commitment from the Group, sourced from an issue of bonds by the Group and the transfer of a significant minority equity interest in the Bank to security holders. Both will be effected through the Exchange Offer.
- Contribution in 2014 of further GBP0.5bn Common Equity Tier 1 capital by the Group, to be committed on the Exchange Offer becoming effective.
- Implementation of previously announced self-help actions from the Bank.
The Allen & Overy team has been led by Global Head of FIG, Alistair Asher, and senior finance partner Mark Sterling, with expert advice from Richard Slynn, head of A&O’s Building Societies and Mutuals practice.
As announced earlier today, Alistair Asher has been asked by the Co-operative Group to take on a key role in its new senior management team as the Group General Counsel. Alistair will therefore be retiring from Allen & Overy on 1 July 2013 after over 34 years with the firm, 26 as a partner.
Additional support, and the core team that will advise the Group and the Bank through the execution of the exchange offer following Alistair’s appointment, is being led by corporate finance partner David Broadley and debt capital markets partner, Matthew Hartley. Regulatory, tax and pensions advice is being led by partners Etay Katz, Vimal Tilakapala and Däna Burstow, respectively.
Head of the A&O insurance group, Philip Jarvis, is leading on the announced plan to dispose of the Co-operative’s general insurance business.
The Group and the Bank have been advised by UBS Investment Bank. The Bank has additionally been advised by HSBC in relation to the Exchange Offer.
