Herbert Smith Freehills’ Moscow office has advised Far Eastern Shipping Company (FESCO) and Industrial Investors on the sale of 55% of FESCO’s shares to Summa for US$1.3 billion.
FESCO is one of Russia’s largest logistics companies and Summa is a Russian diversified holding company with assets in the port logistics, engineering, construction, telecoms and energy sectors.
Herbert Smith Freehills’ corporate team advised Industrial Investors as selling shareholder on the restructuring of its FESCO shareholding, including the unwind of complicated stock-lending and repo arrangements.
The firm’s finance team advised FESCO as target borrower on the acquisition finance matters in relation to the sale to Summa. This transaction was unique from a finance perspective: while remaining a partially public (RTS-listed) company, FESCO and its subsidiaries acted as guarantors and lenders to Summa for the purposes of the acquisition. Furthermore, this was one of the first genuine leveraged buyouts in the Russian market since the global financial crisis.
Partner Evgeny Zelensky led the Herbert Smith Freehills team with assistance from senior associate Gurgen Gortsunyan and associate Denis Morozov. Moscow-based finance partner Ed Baring led on the senior $800m financing provided by Goldman Sachs, ING and Raiffeisen, assisted by senior associate Ragnar Johannesen and associate Georgiy Entin. London-based finance partner Dina Albagli led the team on a separate US$140 million ISDA-based margin loan provided by Natixis and other banks, assisted by senior associate Nick May and associate Joy Amis.
Evgeny Zelensky commented: “This transaction was very complex which required a high level of commitment and dedication from the team. We are delighted to be able to assist Industrial Investors and FESCO on this important mandate and we hope to continue to work closely with FESCO, for whom we have already advised on other finance, M&A and corporate matters following its acquisition by Summa.”
Orrick, Herrington & Sutcliffe LLP acted as co-counsel on the acquisition. White & Case acted for Summa, Allen & Overy advised the syndicate banks and Ashurst acted for the margin lenders.
