ASIA TEAMS OF THE YEAR International firm of the year ... IFLR/April 2010 ASIA TEAMS OF THE YEAR Strong relationships with Asian issuers fuelled Clifford Chance’s work this year

20 IFLR/April 2010 www.iflr.com

ASIA TEAMS OF THE YEAR

Strong relationships with Asian issuersfuelled Clifford Chance’s work this year.The firm assisted Vincom on itsconvertible and counselled KookminBank on its groundbreaking coveredbond. Banks such as China DevelopmentBank on the China Minmetals deal andthose on the Buma LBO also turned toClifford Chance. The firm was alsoinvolved in two of the year’s mostimportant restructurings – AsiaAluminum and FerroChina.

Also nominated: Allen & Overy;Linklaters; Freshfields BruckhausDeringer; Latham & Watkins; SidleyAustin and Skadden Arps Slate Meagher& Flom

International firm of the yearClifford Chance

L-R: Connie Heng, Angela Chan and Tony Oakes of Clifford Chance

Sidley Austin had a very active 2009,acting for the companies on a swathe ofAsian deals. In capital markets, it assistedIndika on its senior note offering, thePRC government on its renminbi bond inHong Kong, and Sands China. The firmalso counselled the targets of privateequity, namely Transpacific and Gome.

Also nominated: Davis Polk &Wardwell; O’Melveny & Myers; Latham& Watkins; Milbank Tweed Hadley &McCloy; Shearman & Sterling andSkadden Arps Slate Meagher & Flom

Most innovative US firm: Sidley Austin

L-R: Benjamin Carale, Renee Xiong, Ivy Tseng, Matthew Sheridan, Timothy Li andCarmen Guo of Sidley Austin, with Jack Wilson of RR Donnelley

Corporate work dominated Walkers’practice in 2009, with the firm advisingon a number of important M&A andprivate equity deals in the region. InHong Kong, it assisted Carlyle on itstake-private of Natural Beauty Bio-Technology. The firm also assisted BainCapital on its investment in Gome byway of a subscription to convertiblebonds and an underwritten open offer. InCambodia, meanwhile, the firm assistedthe banks on Royal Group’s takeover ofCamGSM. Elsewhere, the firm assistedDeutsche Bank on Asiana Airlines’securitisation of ticket receivables.

Offshore team of the year: Walkers

L-R: Tom Young of IFLR, Denise Wong, Carol Hall and Kristen Kwok of Walkers

www.iflr.com IFLR/April 2010 21


Linklaters remains a trusted adviser forunderwriters and bookrunners, with the firmassisting the banks on Bank of East Asia’s $500million core capital raising and the PRC’s Rmb6 billion offshore bond. The firm also assistedthe banks on Tata Steel’s $875 million exchangeoffer in November, the largest such deal in Asia.

However, the firm showed it has otherstrings to its bow by assisting Sino-Forest onits consent and exchange offer with US lawadvice.

Also nominated: Clifford Chance; Davis Polk& Wardwell; Shearman & Sterling and SidleyAustin

Debt and equity-linked: Linklaters

L-R: Jeremy Webb of Linklaters, Rachel Evans of IFLR

Allen & Overy’s structured finance team iswidely respected as one of the best in the region.The past 12 months were no exception withA&O picking up several important mandates inKorea. The firm advised the arrangers onKookmin’s groundbreaking covered bond inMay and assisted Nomura on the IBK-guaranteed securitisation of Hanjin’s shippingcontracts in October.

In non-transactional matters, the firm alsoshowed its clout, advising on the Nafmii masteragreement and counselling the AsiaDevelopment Bank on the introduction of close-out netting for derivatives transactions in thePRC.Also nominated: Clifford Chance; O’Melveny& Myers and Orrick Herrington & Sutcliffe

Securitisation: Allen & Overy

L-R: Walter Son of Allen & Overy, Rachel Evans of IFLR

In May, Freshfields capitalised on itslongstanding relationship with Hutchison toadvise the company on the spin-off of its HongKong telecommunications business. Althoughwell respected for its work with issuers, the firmalso played a crucial role on the Sands IPOcounselling the sponsors, bookrunners andunderwriters.

The firm also assisted the underwriters onChina Minsheng Bank’s $3.9 billion IPO andChina Longyuan’s $2.6 billion offering.

Also nominated: Clifford Chance; Linklaters;Norton Rose and Sidley Austin

Equity: Freshfields

L-R: Tom Young of IFLR, Iris Leung and Calvin Lai of Freshfields



Clifford Chance picked up several interestingmandates in south-east Asia in 2009. In Augustthe firm counselled the banks on Buma’stakeover by Delta while, in November, the firmassisted Royal Group on its purchase of theCambodian operations of Millicom. This wasCambodia’s biggest M&A deal to date at $346million and marked the first buyout of aninternational firm by its local partner.

Elsewhere, the firm assisted ChinaDevelopment Bank on China Minmetals’takeover of Oz Minerals.

Also nominated: Freshfields BruckhausDeringer; Linklaters; O’Melveny & Myers andPaul Weiss Rifkind Wharton & Garrison

M&A: Clifford Chance

L-R: Tom Young of IFLR with Connie Heng of Clifford Chance

Linkaters’ private equity team grows fromstrength to strength. This year the firm assistedAffinity Equity Partners on its club deal withKKR to buy Oriental Brewery from InBev. Notonly was this transaction Asia’s largest LBO since2006, before the credit crunch, it also involvedsome innovative structuring of the intercreditoragreement to deal with different financingfacilities. The firm also assisted Carlyle on itssuccessful take-private of Natural Beauty, as wellas TPG on the sale of its stake in BankThai.

Also nominated: Sidley Austin; SimpsonThacher & Bartlett; Skadden Arps SlateMeagher & Flom and Sullivan & Cromwell

Private equity: Linklaters

L-R: Carl Hopkins of Major Lindsey & Africa and Betty Yap of Linklaters

FerroChina’s distress and insolvency in Chinakept Clifford Chance busy this year, with thefirm representing some of the company’s offshorecreditors. The deal was closely scrutinised for itsinsight into China’s new bankruptcy law andhow foreign creditors would be treated.

gAsia Aluminum, meanwhile, exposed thedangers for offshore investors in Chinesecompanies with onshore assets. The company’soffshore vehicles were put into liquidation whileits onshore assets were sold to a companyaffiliated with the management. Clifford Chanceadvised a group of private equity investors.

Also nominated: Allen & Overy; Lovells andSidley Austin

Restructuring: Clifford Chance

L-R: Tom Young of IFLR with Clifford Chance’s Tony Oakes



Latham & Watkins counselled the lenders onthe Paiton 3 project, an Indonesian power plantto be built on the site of an existing, separateproject. The deal required the careful drafting offinancing documents to ensure that both sets oflenders were protected in the event of eitherproject getting into distress.

The firm also assisted Senoko Power on therefinancing of its senior and mezzanine debtfacilities. The original deal was shortlisted forIFLR’s Project Finance Deal of the Year lastyear.

Also nominated: Clayton Utz; Herbert Smith;Shearman & Sterling and Skadden Arps SlateMeagher & Flom

Project finance: Latham & Watkins

L-R: Andrew Lam of Latham & Watkins with Rachel Evans of IFLR

Clifford Chance’s China practice had a busy2009. The firm was hired by Chinalco on itsaborted investment in Rio Tinto, as well asassisting China Development Bank on ChinaMinmetals’ more successful takeover of OzMinerals. The firm was also chosen by creditorsof Asia Aluminum and Ferrochina looking toextract value from the onshore assets of thedistressed PRC-based companies.

Also nominated: Davis Polk & Wardwell;Linklaters and Sidley Austin

China practice: Clifford Chance

L-R: Tom Young of IFLR, Connie Heng of Clifford Chance

Allen & Overy has supported charities and goodcauses across the Asia-Pacific region, from HongKong and China, to Singapore, Japan andThailand. The firm advised Roots & Shoots andthe World Wildlife Fund on corporategovernance issues in China, and counselledEnlighten (which aims to improve the life ofthose with Epilepsy) on establishing its branchin Hong Kong.

Meanwhile, in Thailand, the firm assisted theA-Pac Financial Coalition with a report for theInternational Centre for Missing and ExploitedChildren on a legal framework for use againstthe abuse of children over the internet.Elsewhere, the firm supported Prison FellowshipInternational with Christmas presents for thechildren of prisoners in Singapore and India.

Pro-bono firm: Allen & Overy

L-R: David Kidd of Allen & Overy with Rachel Evans of IFLR

Credit Suisse worked on several innovative debtdeals in 2009. The bank was the solebookrunner on Vincom’s convertible bond, andalso played a role on Bumi Resources’ andCapitaLand’s convertibles. Credit Suisse alsohelped structure Sino-Forest’s exchange offer,acting as dealer-manager and solicitation agent.

Also nominated: Barclays Capital; Citi;Deutsche Bank; HSBC; Morgan Stanley andNomura

In-house, debt: Credit Suisse

L-R: Stephen Monick of Credit Suisse, IFLR managing editor Simon Crompton

Goldman Sachs worked on a swathe ofshortlisted equity deals of the year. The bank wasthe sponsor of Hutchison Telecommunications’introduction in Hong Kong, a joint bookrunneron Sands China’s IPO, and a joint globalcoordinator of Maxis’s offering. Also in Malaysia,Goldman led Malayan Banking’s RM6 billion($1.6 billion) rights issue.

Also nominated: Bank of America MerrillLynch; BNP Paribas; Credit Suisse; JP Morganand UBS

In-house, equity: Goldman Sachs

L-R: Jasmine Karimi of HKCCA, Steven Winegar of Goldman Sachs

Mallesons is one of Australia’s strongest firms,but it also benefits from strong offices in GreaterChina. This year the firm picked up somequality domestic mandates, counselling theliquidators on Opes Prime’s restructuring andNational Australia Bank and Westpac onVictoria’s desalination plant. National AustraliaBank also turned to the firm for advice on theSMHL Securitisation Fund. Meanwhile theHong Kong team assisted the banks onLumena’s IPO.

Also nominated: Kim & Chang; King & Woodand Mayer Brown JSM

Regional: Mallesons Stephen Jaques

L-R: David Olsson of Mallesons Stephen Jaques with Rachel Evans, IFLR




ASIA AWARDS

Local law firms often make thedifference between a deal’s successor failure. They truly understandthe nuances of the law in their

jurisdiction, and the practicalities of applyingit. This year was no exception, with local lawfirms across the region playing a crucial roleon many of the most innovative deals of 2009.

For example, Vietnamese winners YKVNacted on the Debt Deal of the Year, helpingCredit Suisse structure an internationalconvertible for Vincom.

Melli Darsa & Co, the Indonesianwinner, and Stamford Law (Singapore),counselled Northstar Pacific on its 40%

stake in Delta – the second leg of IFLR’sM&A Deal of the Year, which began withBuma raising financing for its acquisitionby Delta.

Korean Firm of the Year, Kim & Chang,also played its role on a winningtransaction, representing HSBC andCitibank on Kookmin’s covered bond. Thiswas the first covered bond in Asia and wasnamed Structured Finance Deal of the Year.

Indian firm Luthra & Luthra,meanwhile, was recognised for its nationalwork, notably on shortlisted deals Sterliteand Cairn India.

But of all the national winners, King &

Wood acted on the most nominated deals –four in total. The firm assisted HutchisonTelecommunications on its introduction onthe Hong Kong exchange, ChinaDevelopment Bank on China MinMetalsinvestment in Oz Minerals, Natural Beautyon its take-private by Carlyle, and a groupof creditors on the Asia Aluminumrestructuring.

Blake Dawson pulled off a surprise win,wresting the Australia Law Firm of the Yearfrom Mallesons (who’s held it since 2003)thanks to its work on the China MinMetalstakeover and for Merrill Lynch throughoutthe restructuring of Opes Prime.

National winners

The winners of the national teams of the year with their awards

AustraliaBlake Dawson

ChinaKing & Wood

Hong KongJSM

IndiaLuthra & Luthra

Indonesia Melli Darsa & Co

Japan Nagashima Ohno & Tsunematsu

Malaysia Kadir Andri & Partners

New Zealand Bell Gully

Philippines SyCip Salazar Hernandez &Gatmaitan

Singapore Stamford Law

South Korea Kim & Chang

Taiwan Lee and Li

Thailand Chandler & Thong-ek

Vietnam YKVN

The winning firms

“Local law firmsoften make the difference betweena deal’s success orfailure”


ASIA DEALS OF THE YEAR

Bank of East Asia core capital In November, Bank of East Asia (BEA)

became the first Hong Kong bank to do a

hybrid tier-one capital raising, with the $500

million deal approved as Category One core

capital by HKMA. While many Asian banks have

emerged well capitalised from the credit crunch,

this was not the public perception of BEA, which

suffered a bank run in September 2008.

November’s offering allowed the bank to boost its

regulatory capital, while the instrument was treated

as debt by the tax authorities.

One deeply subordinated note was issued by

the bank on which payments of interest would be

tax-deductible, alongside a preference share

issued by a special purpose vehicle owned by BEA.

These were contractually stapled together. If a

particular event occurred, the two would be

unstapled and the note would be assigned (the

rights having already been purchased) to the SPV

with the preference share dividend paying.

Indikasenior notes Indika’s $230 million offering of senior notes

in November was one of the more complicated

debt deals to come out of Indonesia in 2009. It

came to market when a lack of certainty about

deal documentation was at its highest, thanks

to Law 24 on translating documents into

Indonesian.

Indika successfully solicited consent from

existing senior secured noteholders to go ahead

with this debt offering and to modify their indenture

so that some of the collateral from the earlier deal

could be used again. Covenants were also struc-

tured to give Indika a greater degree of control over

its 46%-owned subsidiary (Kideco) than would

usually be the case.

PRC renminbi bond In October, Hong Kong was chosen as the

venue for the PRC’s first offshore sovereign

renminbi bond. Under Hong Kong regulations,

the PRC government cannot issue debt without a

full prospectus. As this is unsuitable for a sovereign

bond, China used a dealer exemption that had not

been used for almost 20 years. The offering

documents were issued by the bookrunners under

their licences, thereby bypassing the need for

regulatory approval of a prospectus.

To meet the high demand for this product, the

regulators agreed to relax the rules governing the

sale of debt products to the retail market. For the

first time, bonds could be bought through phone

and internet banking. HKMA is now consulting on

expanding these changes to other debt offerings.

Sino-Forest exchange offerAs redemption dates approached for many

bonds in late 2008 and early 2009,

companies rushed to head off a default and

exchange their obligations. But for some

companies, particularly those with bonds held

by US investors, this was not simple.

Bonds that had traded into the US secondary

market could not simply be exchanged; new bonds

could only be offered to Qualified Institutional

Buyers (QIBs), not all bondholders. To address this,

Sino-Forest turned away from the typical model of

exchange offers, where consent and exchange are

sought and documented simultaneously, and

created a dual-track process where consent was

required from all bondholders but new bonds were

only offered to those that were eligible.

Sterlite convertible This $500 million convertible bond from

Sterlite Industries in October was the first

from an Indian issuer to be SEC-registered;

previously, deals into the US had been done

under Rule 144A.

Sterlite had to manage US tax issues, as well

as investors used to anti-dilution provisions. Todeal

with Indian regulations on the price of conversion,

whichset a minimum floor price below whichequity

can’t be issued, the convertible included a feature

to compensate investors if the price dropped.

Sterlite also had to deal with regulations

governing the amount of money that can be raised

outside of India and how such proceeds are used,

as well as Securities and Exchange Board of India

registration of shares so that no further approval

would be required after the bond converted.

Vincom’s $100 million convertible inNovember was a groundbreaking deal forVietnam. The deal was the first convertibleto be sold overseas, and only the secondinternational bond. (The first was issued bythe sovereign in 2005.)

This created a number of challenges toready the regime for an internationalconvertible bond. Vincom successfullysought verbal approval from the StateBank of Vietnam prior to pricing,providing comfort to it and thebookrunner. Two 10b-5 opinions werealso prepared to educate investors aboutthe company and the convertible’sstructure – and to manage the liability ofthe issuer and bookrunner.

Vincom also worked with the regulatorson the regime for conversion. Vietnamrestricts foreign ownership so a cashconversion was built into the structure incase the bond cannot convert into shares.

Debt and equity-linkedVincom convertible

Runners-up

L-R: Dang Duong Anh of Vilaf, Connie Heng of Clifford Chance, Matthew Bersani ofShearman & Sterling and Truong Nhat Quang of YKVN



Asiana Airlines ticket receiv-ablesAs global demand for structured products

ground to a halt last year, issuance in Korea

continued, albeit at a slower rate. New deals

continued to innovate as Asiana Airlines’ $86

million securitisation showed in June.

This transaction securitised the airline’s

ticket receivables through a complicated

structure under which the receivables were

transferred to a trust that then issued two

investor certificates and one seller certificate.

Each investor certificate was sold to an

onshore SPV, which then issued a bond to an

offshore SPV and entered into a loan-esque

contract with investors, instead of issuing more

common asset-backed notes. This attracted a

different class of investors that was happy to

trade through transfers rather than a tangible

piece of paper.

IBK structured noteThis deal out of Korea issued notes based on

contracts between Hanjin Shipping and Posco.

The $200 million three-tranche transaction

closed in October and involved a novel

guarantee.

Industrial Bank of Korea guaranteed the

notes; the notes are unsecured and the security

over the issuer’s assets is in favour of IBK.

Unusually, the SPV issuer was an onshore

entity (offshore vehicles are usually used to

issue bonds to international investors) and

issued foreign-currency bonds directly to

offshore investors.

SMHL Securitisation Fund 2009-3This A$784 million ($706 million) securiti-

sation in November included a novel tranche

of senior notes. The deal, backed by

residential mortgages, allowed holders of the

A1R class notes to redeem or convert them

on any monthly payment day for two years

after issuance.

After two years, the A1R notes will

automatically convert into A1 notes, which

compensate for the lack of early redemption

rights by paying a higher coupon. The two

types of notes with different risk and reward

profiles help to bring in a more diverse investor

base.

This was the first Australian RMBS to offer

a convertible and redeemable class of notes,

with more now expected to follow. The notes

were sold to domestic and international

investors and listed in Ireland.

Covered bonds came to Asia in 2009 withKookmin Bank’s $1 billion offering inMay. Although other issuers have not yetfollowed Kookmin’s example, marketcommentators expect more covered bondsout of Korea and, possibly, Japan.

Another first, Kookmin’s bond includedcredit card receivables within the coverpool of assets backing the deal. Creditcards were added to the structure to boostthe rating and ensure that the bond’s assetscould be sold if the bond defaulted (themortgage market in Korea is not veryactive).

The deal was six-times oversubscribedand the Korean government is nowconsidering introducing new legislation tofacilitate further covered bonds. Thistransaction was unusually structured as astandalone deal as the present Asset-Backed Securities (ABS) Law does notmake it easy to issue under a programme.

SecuritisationKookmin covered bond

Runners-up

L-R: Soo-Man Park, Kim & Chang, Walter Son of Allen & Overy, Young-Hee Jo ofShin & Kim and Tony Oakes of Clifford Chance

“This was the first Australian RMBS tooffer a convertible and redeemable classof notes, of which more will follow”



BW Plantation IPO As the first initial public offering to come out

of Indonesia in 2009 – in October – BW

Plantation’s offering was closely watched.

Market observers were not just looking for

investor demand; the deal was completed

under new rules from Bapepam on under-

writers.

Once an offering opens, local underwriters

cannot invoke broad market-out provisions to

back out of a deal before closing. Instead, they

can only exit a deal if the share index of the

Indonesia Stock Exchange drops below 10% on

three consecutive days, in the event of certain

force majeure, or if allowed by Bapepam.

The local banks – which underwrite all

stocks in an IPO – required back-to-back agree-

ments with international underwriters to

distribute the risk on this deal. Local and interna-

tional underwriters had to get comfortable with

the additional risk associated with their limited

ability to exit.

Hutchison Telecommunicationsintroduction In May, Hutchison spun off its Hong Kong

telecommunications business by way of an

introduction on the Hong Kong Stock

Exchange. The deal raised $613 million

from qualified existing shareholders of

Hutchison Telecommunications

International.

In Hong Kong, the deal had to comply with

the exchange’s listing rules on the issuance of

new shares, and on spin offs. Hutchison had to

show that its Hong Kong and international

communications businesses had been

separated into standalone companies.

The deal’s complexity was increased by the

fact that some of Hutchison International’s

shareholders were in the US. The company had

to file a prospectus with the SEC to convince the

regulator that it did not need to register for a sale

of securities. This posed issues with regards to

coordinating the information provided to share-

holders in the US and Hong Kong.

Lumena IPO Lumena was one of the first companies

brave enough to test market demand with a

large IPO in the turbulent first half of 2009.

The company raised $149 million in June

with its Hong Kong offering.

To offer in Hong Kong, Lumena had to

introduce strict corporate governance proce-

dures; the management was restructured to get

the exchange comfortable with the listing. The

company also had to ensure that it had appro-

priate approvals to continue its operations, such

as land permits, and obtain these if it didn’t

already have them.

Concurrently, a secured pre-IPO loan to

Lumena was restructured with a partial

repayment from the IPO proceeds, the partici-

pation of warrant holders in the IPO and a new,

almost unsecured, loan following the IPO.

Maxis Berhad IPOThis landmark deal for Malaysia’s capital markets

involved the listing of Maxis Berhad on Bursa

Malaysia. The $3.3 billion IPO in November was

the largest ever in south-east Asia and introduced

a new feature to Malaysian offerings – the corner-

stone investor.

Previously, cornerstone investors had not

been permitted by the regulators on the basis that

this would be favouring a select group. The

company was able to persuade the regulators that

this feature was crucial to the deal’s success,

setting a precedent for future transactions.

Prior to listing, Maxis’s relationship with its

Malaysian subsidiaries was restructured, as were

dividends from those companies to Maxis.

Schramm IPO As the Hong Kong Stock Exchange looks at

different ways to attract non-Chinese

companies, Schramm became the first

German company to list in December.

To list, Schramm worked with the exchange on

conflicts between Hong Kong’s listing rules and

the German Companies Law on issues such as

shareholder protection and issuing new shares.

On the latter, Schramm worked around the

German requirement to register shares on any new

offering (to comply with Hong Kong practice on

speed of issuance) by devising a structure whereby

new shares could be issued to underwriters who

would be registered. The shares could then be sold

into the market when desired.

Listing casino operators is always tricky thanks tothe highly regulated environment in which theyoperate, but Sands China’s $2.5 billion offering inHong Kong at the end of November was morecomplicated than most.

Sands China was spun off from its US parent,Las Vegas Sands, prompting a number of carve-outissues about separating the businesses and timingdisclosure to potential investors in Hong Kongand shareholders in the company’s NYSE-listedparent.

Sands China’s IPO was also part of a widerfundraising effort, including $1.75 billion inproject financing and pre-IPO obligations, someof which converted into equity at the point oflisting. This again required regularly updateddisclosure on the company’s capitalisation.

EquitySands China IPO

Runners-up

L-R: Calvin Lai of Freshfields, Matthew Sheridan of Sidley Austin, DeniseWong of Walkers and Gerhard Radtke of Davis Polk



China Minmetals/Oz Minerals China Minmetals’ A$1.39 billion ($1.24

billion)takeover of Oz Minerals in June 2009

was a necessary rescue for the troubled

Australian mining company. The deal,

however, was nearly thwarted after the

original structure was rejected by the Foreign

Investment Review Board.

Some of Oz Minerals’ assets were located in a

sensitive area where there was a military instal-

lation. This was off limits to a foreign company,

particularly a Chinese state-owned enterprise. The

deal was therefore restructured at the last minute

from an equity acquisition of Oz Minerals’ holding

company to a piecemeal acquisition of the

company’s subsidiaries.

This was done by way of a scheme of

arrangement, leaving the sensitive assets within Oz

Minerals’ holding company. The companies

pursued a low-key approach with the regulators to

obtain approval second-time round.

China Strategic/Nan ShanInsurance AIG’s troubles were closely watched over the

course of 2009, by investors, creditors and the

US government. But the sale of its Taiwanese

life insurance business, Nan Shan, for $2.15

billion in October certainly improved its

position.

Nan Shan was sold to a consortium

comprising Primus – a private equity-esque

financial institution – and China Strategic, a small

Hong Kong-listed company. This required

discussion with the Hong Kong exchange to allay

fears that the transaction amounted to a reverse

takeover effectively listing Nan Shan in Hong

Kong.

The exchange also had to be made

comfortable with China Strategic raising $1 billion

through a convertible bond to fund the acquisition.

This involved boosting the company’s

management team. All of it took place under the

close watch of the US government.

eBay/Gmarket This transaction saw consolidation in the

online market space with eBay buying Korean

Gmarket for $1.2 billion in June 2009.

Although Gmarket has American Depositary

Shares listed in the US and is not listed in

Korea, the deal raised some interesting

conflicts between US and Korean law.

eBay’s tender offer was not subject to Korean

takeover rules but some holders of Gmarket’s

shares were in Korea so there needed to be a

separate tender offer in Korea. Disclosure had to

be translated into Korean to ensure that all share-

holders were provided with the same information.

The companies also had to convince Korea’s

fair trade regulator that the transaction would not

be anti-competitive. Despite a combined market

share of over 90%, the merger was approved prior

to signing after the regulators were convinced that

the market in which the companies operate is so

flexible that market entry was not limited.

Royal Group/Millicom In a sign that Cambodian companies are

becoming more sophisticated, Royal Group

bought out its international joint venture

partner, Millicom, to acquire CamGSM in

November 2009.The $346 million deal was

Cambodia’s largest M&A to date and required

careful structuring to make lenders comfortable

with its risk. For example, the banks lent onshore,

taking security over onshore assets.

However, Royal Group purchased Millicom’s

Cambodian operations at the holding company

level, so share pledges were also required to

reassure the banks.

Sumitomo Mitsui/Nikko CordialSecurities This $8.7 billion deal saw one of Japan’s

largest financial institutions purchase Nikko

Cordial Securities from Citigroup. After talks

with US regulators, Citi decided to dispose of

the retail portion of Nikko Cordial, alongside

Nikko Asset Management and Nikko Citi

Trust.

The three deals were structured separately

but closed at the same time. Nikko Cordial’s

disposal was conducted as a demerger, with

Sumitomo acquiring all the retail assets which were

put into a new vehicle for the purpose. Citi however

kept the institutional and wholesale parts of Nikko

Cordial so the business had to be split, taking into

consideration regulatory restrictions, before

Sumitomo could acquire the retail portion.

In an unusual twist to conventionalM&A, the target of this deal raised thefinancing for its takeover. Bukit MakmurMandiri Utama (Buma) raisedapproximately $1 billion to finance itsbuyout by Delta Dunia Makmur (Delta)through a refinancing, a new facility, abond and an equity offering.

Buma’s management wanted the deal tobe a success so used Buma’s better credit.These fundraisings were documentedseparately but were done almostsimultaneously. Completion risk was aparticular concern for all parties as thefundraising was based on the premise ofthe M&A deal closing. At the same time,Northstar Pacific bought a 40% stake inDelta. The transactions were structuredaccordingly and were conditional on oneanother.

M&ADelta/Buma

Runners-up

LR: Angela Chan of Clifford Chance, Melli Darsa of Melli Darsa & Co, Wei Xiao ofMilbank Tweed, Neil Campbell of OMM and Min-tze Lean of Stamford Law



Warburg Pincus/TranspacificIndustries At stake on Warburg Pincus’s A$800 million

($616 million) investment in Transpacific

Industries was the need for a structure that

would facilitate the recapitalisation of the

waste management company without neces-

sitating shareholder approval or dispensations

from the Australian Securities Exchange.

Regulatory limits on stock dilution mean that

new shares have to be offered pro rata. Warburg

Pincus therefore made a A$65 million investment

in Transpacific by way of a placement and under-

wrote a A$735 million entitlement offer (similar to a

rights issue). If shares were not taken up by other

investors, the private equity company would

increase its stake.

However, to manage the amount of shares

that would be sold to investors or would remain with

Warburg, the private equity player used a structural

mechanism to cap the number of shares issued. All

parties communicated regularly with the regulators

to ensure that the investment was permitted and

didn’t cross the threshold for a general offer.

Carlyle/Natural BeautyOne of the high profile deal failures of early

2009 was CVC’s attempt to privatise Natural

Beauty Bio-Technology. When Carlyle set its

sights on the company later in the year, it was

keen to learn from CVC’s mistakes.

CVC tried to take Natural Beauty private

through a scheme of arrangement, which requires

shareholder approval. The deal was voted down by

minority shareholders. Carlyle instead elected to

conduct a general offer after its BidCo acquired

65.53 % of the target having done a deal in

advance with the controlling shareholder. As a

result, minority shareholders could not vote down

the deal.

This HK$800 million ($102 million) deal was

the private equity house’s first public-to-private

transaction in Hong Kong.

Bain/GomeWith its chairman under house arrest and

stock suspended for eight months, any trans-

action involving Gome was always likely to

capture the public imagination. So Bain

Capital’s Pipe (private investment in public

equity) deal in August was viewed by many as

rescue financing that could resurrect the

company’s fortunes. Bain’s investment

comprised two interconnected transactions,

namely a subscription to an Rmb 1.6 billion ($233

million) convertible bond and underwriting a $199

million open offer by Gome. The deal was struc-

tured to avoid seeking shareholder consent; the

number of shares to be issued when the bond

converts was kept under 20% of the share capital.

KKR and Affinity’s acquisition of OrientalBrewery from InBev in July was not just alandmark deal for Asia, but also globally. The $1.8billion takeover was the largest in Asia since 2006and the third largest in the world in 2009,suggesting that leveraged acquisitions could beabout to make a comeback.

Upstream guarantees are not possible underKorean law so debt at the acquisition companylevel was not secured by assets, but by the target’sshares. Four separate facilities were provided to thecompany – two offshore and two onshore atHoldCo and OpCo level – which were treated paripassu.

InBev also negotiated the right to re-acquireOriental Brewery within five years under certaincircumstances and pre-agreed financial terms.

Private equityKKR and Affinity/Oriental Brewery

Runners-up

L-R: Yong Jae Chang of Lee & Ko, David Grimm of Paul Hastings, Betty Yap ofLinklaters, Sky Yang of Bae Kim & Lee, Anthony Choi of Simpson Thacher, UrsFankhauser of Sullivan & Cromwell and Seong-Koo Cheong of Kim & Chang.

“When Carlyle set its sights on NaturalBeauty later in the year, it was keen tolearn from CVC’s mistakes”



Asia AluminumIf investors needed a reminder of the dangers

of channelling money into China through

offshore structures, Asia Aluminum provided

it. Its highly publicised difficulties in the first

half of 2009, were resolved in such a way that

many investors walked away with next to

nothing.

The complexity of the deal stemmed from the

company’s many different levels of debt. While

material operations and some debt were accrued

onshore, debt was also acquired through offshore

trading entities, through two layers of bonds, and

through a series of Pik (payment-in-kind) notes.

When the company offered to buy back the

senior and Pik notes in February for between 13

and 27 cents on the dollar, investors rejected the

deal. The management, as threatened, put the

company into provisional liquidation and, despite

efforts to find a white knight, Asia Aluminum’s

assets were sold to a company associated with the

management and sanctioned by the PRC

government.

Opes Prime In October, Hong Kong was chosen as the

venue for the PRC’s first offshore sovereign

renminbi bond. The Rmb 6 billion ($878

million) deal was the first bond issue by China

since 2004 and was three-times oversub-

scribed.

Under Hong Kong regulations, the PRC

government cannot issue debt without a full

prospectus. As this is unsuitable for a sovereign

bond, China used a dealer exemption that had not

been used for almost 20 years. The offering

documents were issued by the bookrunners under

their licences, thereby bypassing the need for

regulatory approval of a prospectus.

To meet the high demand for this product, the

regulators agreed to relax the rules governing the

sale of debt products to the retail market. For the

first time, bonds could be bought through phone

and internet banking. HKMA is now consulting on

expanding these changes to other debt offerings.

DavomasWhat could have been a standard exchange

offer for some outstanding bonds was compli-

cated when Davomas was tipped into the

Indonesian insolvency process. As a result, the

exchange and consent solicitation had to be

conducted under a plan of composition, the

first time this has been achieved in Indonesia.

Under the deal, $238 million in high yield

bonds were exchanged following a joint solicitation

and tender offer. Over 98% of bondholders

accepted the offer, which was 50% lower than the

notes’ face value, and received variable-rate

guaranteed senior notes due 2014.

The plan of composition had to be approved by

creditors and a Jakarta court. Without approval the

offer could not go ahead and the company could

have been forced into insolvency.

Evergrande Following the financial crisis’s arrival in Asia,

Evergrande became distressed, defaulting on

its core financing. Under the terms, this meant

the company could be forced to repay up to $1

billion of that debt early.

The company decided to do an IPO to raise

capital. With the capital markets closed for much of

2009, the company made the most of a window to

list in November. To do so, Evergrande had to obtain

waivers for the defaults from its creditors.

This was complicated by the number of

creditors with different levels of security over

Evergrande. For example, strategic investors also

had equal security on some parts of the deal as

senior secured investors. And convertible

bondholders had first rank security over some of

the group’s subsidiaries. Consent from 100% of

creditors was however obtained and the company

completed a $725 million IPO.

FerroChina’s problems provided the first major testfor China’s new bankruptcy law when it enteredformal procedures at the end of 2008. Thecompany, which had debtors onshore and offshoreset a precedent for how foreign creditors would betreated in future insolvencies.

In the end, foreign creditors were treated thesame as Chinese creditors. But those that investedthrough offshore structures received nothing.Secured onshore creditors could expect to receive60% of their debt, while unsecured onshorecreditors could expect 20%. Five of FerroChina’ssubsidiaries were sold to China Minmetals torecoup the money.

The deal highlighted problems with China’sinsolvency law, namely the appointment of a localadministrator, difficulties arranging a rescue salewithout management cooperation, and thenecessity of local government support.

RestructuringFerroChina

Runners-up

L-R: Tom Young, editor of IFLR and Matt Fairclough, Clifford Chance

“The regulatorsagreed to relax the rules governing the sale of debtproducts to theretail market”



Victorian desalination plant Victoria’s desalination plant in Australia was

nearly scuppered by the financial crisis. This

A$4.8 billion deal struggled to find financing

so the Victorian government, which invited bids

for the project, offered to guarantee the syndi-

cation of the debt.

This was the first time that an Australian

state had provided such a guarantee. At the

same time, Victoria also agreed to guarantee

the refinancing after five to seven years.

However, despite its help with financing, the

government did not make the project easy.

Bidders for the tender were required to submit

bids four times as the project’s nature shifted.

In the meantime, work on the project

began on the basis that the losing bidder would

be compensated by the winner. This required

careful documentation to ensure that all

parties were happy with the risk. The project

also required the building of power infra-

structure to supply the plant. This was done

under a separate (government guaranteed)

project financing; the project company and

lenders had to get comfortable with the

ownership risk as the government was set to

sell the infrastructure within three years.

New Bong Escape Undertaking the first hydroelectric IPP in

either Pakistan or Azad Jammu & Kashmir

(Kashmir) is no easy task. The project, which

began in Kashmir in 1996, has been rocked by

bombings, assassinations and an earthquake,

but financing for the $175 million plant finally

closed in 2009.

Unsurprisingly, political and legal (this part

of Kashmir is administered by Pakistan but is

also semi-autonomous) risks were a major

concern for lenders and the sponsor. (The

original sponsor was replaced by Hubco and

Proparco and IFC joined the lender group late

in the day.)

The financing was structured as a direct

US dollar-denominated loan from Asian

Development Bank, IFC, and Proparco, an ijara

facility from Islamic Development Bank and a

shariah-compliant commercial facility from

Habib Bank and National Bank of Pakistan.

While reps and warranties were the same, each

facility agreement was different, with all tied

together by a complex intercreditor

agreement.

Cairn IndiaThis mixture of corporate and project

financing allowed Cairn India to channel $1.6

billion from an international dollar facility and

domestic rupee facility to its oil project in

Rajasthan.

Cairn holds its interests in Rajasthan

through a number of subsidiaries. As a result, a

complex structure was required to direct cash

from the project back to the lenders, and to

give them security over the project’s assets.

This was complicated by Cairn’s plan to merge

its subsidiaries.

This is one of the first reserve-based

financings of an oil project in India. The deal

also required careful drafting of the production

sharing contract and joint operating

agreement.

The $1.4 billion Paiton 3 project in Indonesiaused a challenging financing structure to fund anew project constructed within an existingproject complex. The new IPP (independentpower plant) will share some of the existingproject’s facilities but has been financed byseparate lenders.

The financing for the new project has beenstructured using the vehicle that financed theexisting plant. As such, the cash flows and securityarrangements had to be structured to give lendersaccess to their project, rather than both.

Complex agreements were required to stipulatewhat will happen if either project gets intodistress, as well as the use of shared facilities. Theterms of the contracts had to be agreed betweenthe borrower and the new lenders, as well asbetween the borrower and the original lenders.

Project financePaiton 3

Runners-up

L-R: Alan Schiffman, Skadden, Andrew Lam of Latham & Watkins andStephen Bottomley, Mayer Brown JSM

“Despite its help with financing, theAustralian government did not make the project easy”


EUROPE TEAMS OF THE YEAR

Linklaters was rewarded for itsoutstanding performance across theboard in Europe. The firm had wins inthe structured finance, equity andprivate equity team categories, and wasalso present on the year’s best debt andequity-linked, structured finance, equity,private equity and restructuring deals.

It was Linklaters’ work for Lloyds thatreally stood out this year. The firmworked for the bank on itsgroundbreaking enhanced capital notesand also helped with its rights issue.Linklaters also fielded multiple teams tohelp Source issue exchange-tradedcommodities while avoiding swapcounterparty default risk and credit risk.

Also nominated: Allen & Overy,Clifford Chance, Freshfields BruckhausDeringer and Shearman & Sterling

International firm of the year:Linklaters

Richard Youle (L) and Stephen Griffin (R) of Linklaters receive the award from SimonCrompton of IFLR (centre)

Another great year for Shearman &Sterling saw the firm win nominationsin five of IFLR’s six deal categories,proving its proficiency across theboard.

From acting for the security agencybank on Schoeller Arca Systems’restructuring to advising French andUS advice to the lead managers andbookrunner on Club Med’s ORANEbond issue, Shearman proved to bethe banks’ go-to US firm. It also wonroles advising the Qatar InvestmentAuthority on its acquisition ofderivative options in VW, and wasalso present on two of tonight’sshortlisted private equity deals.

Also nominated: Cleary GottliebSteen & Hamilton, Latham &Watkins and Sullivan & Cromwell

Most innovative US firm in Europe:Shearman & Sterling

L-R: Roger Kiem, Bertrand Sénéchal, Julian Tucker and Richard Price ofShearman & Sterling receive the award from James Abbott of Deutsche Bank



Of the five deals shortlisted for IFLR’s debt andequity-linked deal of the year, Allen & Overywas involved in three, proving the lastingstrength of its debt capital markets team.

This year, the firm worked on the exchangeoffer for newly created BPCE, and advised thedealer managers on the innovative LloydsECN deal. It also won roles advising Europeanissuers, including Wind Telecommunicationson its complicated refinancing.

Also nominated: Clifford Chance, FreshfieldsBruckhaus Deringer, Linklaters and Lovells

Debt and equity-linked:

Annet Tamminga of JP Morgan presents the award to Yannis Manuelides, Henri Wagner and Daniel Fletcher of Allen & Overy

Linklaters’ impressive securitisation workcontinued this year, with the firm present ontwo of IFLR’s shortlisted deals.

On the Yorkshire Water whole businesssecuritisation, the firm developed a newstructure for the issuer that incorporated e-voting and co-existence, and on the SourceETC programme the firm provided multi-faceted advice to the banks involved, whichsucceeded in accessing the tricky commoditiesmarkets while mitigating swap counterpartyrisk.

Also nominated: Allen & Overy and CliffordChance

Structured finance: Linklaters

Stephen Griffin of Linklaters receives the award from Cynthia Cheung of Bankof America Merrill Lynch

Linklaters won lead roles on the region’s mostinnovative, and often largest, deals in 2009.The firm acted for the underwriters in HSBC’s£17.7 complex rights issue and the issuer,Lloyds, in its highly structured equity offering.It was also instrumental in the success of otherlandmark deals last year, working on the RioTinto rights issue and the Tom Tom offering.

Also nominated: Allen & Overy, ClearyGottlieb Steen & Hamilton and FreshfieldsBruckhaus Deringer

Equity: Linklaters

L-R: Peter Castellon of Citigroup presents the award to Stephen Griffin ofLinklaters

Allen & Overy



As ever, Freshfields was striking for its breadthof work. Advising Essent on the sale of its ratherpoliticised business to RWE was not easy, andlocal pressures combined with a difficult marketto create the need for a truly innovativesolution. Elsewhere the firm also advisedPorsche on the sale of its derivatives to the QIAand spent a long time helping Sinochemnegotiate between their Chinese regulators andthe UK Takeover Panel.

Also nominated: Hengeler Mueller, Linklaters,Shearman & Sterling and Sullivan & Cromwell

M&A: Freshfields

Shawn der Kinderen of Freshfields Bruckhaus Deringer receives the awardfrom Laura Holleman of Goldman Sachs

If three nominations for deal of the year isgood, four is just damned impressive. Linklatersnot only led Oaktree to the first really successfulloan-to-own deal in Europe, it also advised themanagers on the hideously complicatedrestructuring and buyout of Invitel byMidEuropa, advised the lenders on the buyoutof Anheuser Busch’s business in eastern Europeand worked for Arcus on its managementbuyout of Babcock & Brown.

Also nominated: Clifford Chance, FreshfieldsBruckhaus Deringer, Lovells and Shearman &Sterling

Private equity: Linklaters

Ian Bagshaw (L) and Richard Youle (R) of Linklaters receive the awards fromStephen Whitbread of Morgan Stanley (centre)

Freshfields spent 2009 landing leading roles onthe most innovative deals. The firm advised theunderwriting bank on the Yell restructuring. Itacted for the lending banks on Thomson’s e2.8billion debt restructuring, as well as Rolf in itsRussian refinancing. It also represented Honseland McCarthy & Stone in their restructurings.

Also nominated: Allen & Overy, CliffordChance, Latham & Watkins, Linklaters andLovells

Restructuring: Freshfields

L-R: Richard Tett, Catherine Balmond and Ken Baird of Freshfields BruckhausDeringer receive the award from Ruari Ewing of the ICMA



With roles on two of the deals shortlisted for theIFLR project finance deal of the year, CliffordChance showed its skill in road projects financing.The firm advised the EIB on the A2 Motorwayextension in Poland, ensuring that the bank’s termswere met and its guarantees appropriatelystructured. It also worked for the bank consortiumon the A5 Motorway project in Germany, whichincorporated a new LGTT structure.

Also nominated: Allen & Overy, Baker &Mckenzie, Freshfields Bruckhaus Deringer andSimmons & Simmons

Project finance: Clifford Chance

L-R: Matthew Layton of Clifford Chance receives the award from AmolPrabhu of Barclays Capital

A combination of high profile and smaller bespoke deals landedBank of America Merrill Lynch’s debt team on the shortlist for ourfirst specialised in-house awards. First, the Lloyds exchange offerinvolved careful timing to tie-in with the concurrent rights issue andof the differing US and European exchange offer timing rules. Theoffer was fully underwritten on day one with the inclusion of a top-up commitment that made drafting the agreement particularlychallenging.

A small, bespoke structured finance transaction also caught thejudges’ attention, with the divestment and syndication of LPinterests in Kreos Capital Venture Debt Fund presenting the teamwith several legal hurdles. The lack of standardised financingdocuments and structures for the asset class meant that agreementswere hotly negotiated. The transaction included acquisition fundingwhich involved complex and bespoke security arrangements witheach participating investor.

Also nominated: Citigroup and Goldman Sachs

In-house, debt: Bank of America Merrill Lynch

Andreas Theiss of Wolf Theiss presents the award to CynthiaCheung and Catherine Daly of Bank of America Merrill Lynch

Roles on the largest Polish equity offer since 2004 by PKO,Globaltrans’ follow-on listing and HeidelbergCement’s (HC)rights issue proved the Deutsche Bank equity team’s expertise incapital raising, and its ability to help companies access marketswhen liquidity was tight.

On PKO, the team negotiated the government’s involvement andcomplex pre-funding and settlement considerations to set a standardfor future Polish deals, and for Globaltrans it worked with the issuerto produce disclosure and due diligence opinions above the necessaryrequirements to keep in line with UKLA and best practice standards.

On the HC rights issue, the capital increase was closely tied toa refinancing to deal with HC’s over-indebtedness, and also hadto consider a share overhang from Merckle, the majorshareholder.

Also nominated: Bank of America Merrill Lynch, BarclaysCapital and Goldman Sachs

In-house, equity: Deutsche Bank

L-R: James Abbott of Deutsche Bank receives the award fromOkko Behrends of Allen & Overy


EUROPE NATIONAL WINNERS

The IFLR Austrian law firm of the year, CHSH, tooka lead role on Wienerberger’s capital increase, the firstin Austria to have hard underwriting and a discountedsubscription price. In the Baltics, Sorainen won for itsrole on the Barclays investment agreement with theLithuanian government, and for its work advising thenew majority shareholder in Parex Bank on its debtrestructuring. In Belgium, Linklaters was rewardedfor its role advising Fortis on the restructuring of itsoperations, and helping Carmeuse amend loan termsto ease its financial covenants. And IFLR’s winner inthe Czech Republic, Wolf Theiss, was recognised forits work on Erste Bank’s participation capitalsecurities, unravelling the country’s unclear guidelineson hybrid issuances.

National law firms of the year

Austria, Baltics, Belgium and the Czech Repulic

L-R: Paul Sestak of Wolf Theiss, Reimo Hammerberg of Sorainen, Irene Welserand Edith Hlawati of CHSH, François De Bauw of Linklaters

In Denmark, IFLR’s law firm of the year wasPlesner, which took a key role for MidEuropa on its acquisition of a holding inInvitel, one of IFLR’s shortlisted M&A deals.In Finland Roschier took the trophy for itswork on the first successful public tenderoffer by a private equity fund in Finland, andfor several innovative project financings. InFrance, winning firm Gide Loyrette Nouelwas rewarded for its work helping tostructure French bank rescue fund SFEF, andfor its role on Eurazeo's convertible bonds inDanone. And the German law firm of theyear, Hengeler Mueller, wins for its role onthree of IFLR’s shortlisted deals, includingthe Heidelberg Cement capital raising.

Denmark, Finland, France and Germany

L-R: Dimitrios Himonas of Roschier, Pierre Raoul-Duval of Gide Loyrette Nouel, PernilleBigaard of Plesner, Bernd Wirbel of Hengeler Mueller

IFLR’s winner in Greece, M&P Bernitsas, worked onthe first deal in the Greek market to use derivatives as theonly underlying asset, and on a complex rights issue forthe country’s national bank. In Hungary, White & Casewas rewarded for its work advising Invitel onMidEuropa’s investment, and the firm’s subsequent loanrefinancing, and also helped the European InvestmentBank on a complex locomotive financing. Ireland’swinning firm Arthur Cox took the trophy forrepresenting a syndicate of five banks on therestructuring of the Rolf Group, and Covidien on itsmigration to Ireland. And in Israel the winner wasHerzog Fox & Neeman, which represented PrismaInvestment House in an exchange of funds in PsagotGroup for a stake in Psagot Investment House, and againon the sale of a mutual fund to Excellence Investments.

Greece, Hungary, Ireland and Israel

L-R: Kathleen Garrett of Arthur Cox, István Réczicza of White & Case, PanayotisBernitsas of M&P Bernitsas


EUROPE NATIONAL WINNERS

IFLR’s Italian law firm of the year was Gianni Origoni,which advised IBL Banca on its acquisition ofCitigroup’s branches in Italy, and Sator Private Equity onits acquisition of Banco Profilo through an undersignedcapital increase. In Luxembourg Allen & Overy isrewarded for its work advising a group of creditors onthe restructuring of Kaupthing, the first time this wasachieved through a demerger for a Luxembourg creditinstitution. In the Netherlands, NautaDutilh worked onthree of IFLR’s shortlisted deals, including WindTelecoms’ innovative high yield issue, and the precedentsetting IMO carwash restructuring. And our winner inNorway, Selmer, took the trophy for advising on therecapitalisation of Master Marine, and on a number ofinnovative M&A deals.

Italy, Luxembourg, Netherlands and Norway

L-R: Henri Wagner of Allen & Overy, Marco Zaccagnini of Gianni Origoni Grippo& Partners, Gaike Dalenoord of NautaDutilh, Steiner ter Jung of Selmer

IFLR’s Polish winner, Dewey & LeBoeufworked on Europe’s largest IPO in 2009 forPGE Polska Grupa, and helped AIG merge itsretail banking in Poland with Santander. InPortugal, Morais Letaio worked for thearrangers on the shortlisted Iberwind projectfinancing, and also for EDP on an innovativesecuritisation transaction. In Russia, winnerCleary Gottlieb helped Gazprom on itsacquisition of SeverEnergia, and for Magnit onthe largest Russian rights issue of the year. AndIFLR’s winner in Spain, Garrigues, advised onMadrid Activos’s static cash CLO publicsecuritisation, with a complex asset pool andmulticurrency waterfalls.

Poland, Portugal, Russia and Spain

L-R: Nuno Galvão Teles of Morais Leitão Galvão Teles Soares da Silva & Associados,Javier Ybañez of Garrigues, Daniel Braverman of Cleary Gottlieb, IreneuszMatusielanski of Dewey & LeBoeuf

Mannheimer Swartling, IFLR’s winner inSweden, advised Ratos on its acquisition in aminority stake of Inwido Finland, and E Tradeon the divesture of its Nordic business to SaxoBank. In Switzerland, winning firmHomburger worked for Paris Re on Swiss lawaspects of its acquisition by Partner Re - IFLR’sM&A deal of the year. And in Turkey thewinning firm was recognised for its workadvising the finance parties involved in theMMK project financing, and the lenders on theprivatisation of Meram Elektrik. That firm wasPekin & Pekin.

Sweden, Switzerland and Turkey

L-R: Simon Crompton of IFLR, Fethi Pekin of Pekin & Pekin, Benedikt Maurenbrecherof Homburger, Stefan Brocker of Mannheimer Swartling


EUROPE DEALS OF THE YEAR

BPCE exchange offer

At the time of the exchange offer Banque

Fédérale des Banques Populaires and Caisse

Nationale des Caisses d’Epargne were in the

middle of a merger to become France’s

second biggest banking group.

This meant that the exchange offer by the

merged BPCE for Natixis Tier 1 securities

involved complicated disclosure descriptions

and cross-guarantees, as the offer and

subscription period were both closed before

the issuer existed as anything other than a

shell company.

A law was enacted in French parliament to

give BPCE the right status to launch the issue,

and the offer was also structured to exclude

existing US and Italian holders.

EDF retail offering

This €3.2 billion ($4.3billion) retail bond issue

was the first corporate issue in France for

more than 20 years, and the first time that

notes were offered directly to retail investors.

This led to a new Euro medium-term note

(EMTN) programme being established, with a

full retail prospectus and disclosure.

The offer also set a regulatory precedent

when the French Autorité des Marchés

Financiers agreed to drop the requirement for

a lettre de fin de travaux, the completion

confirmation document that is signed by

auditors and backs up the prospectus. The

obligation was later fully repealed and new

regulations were issued for listing on

Euronext Paris and marketing to retail bond

holders were passed.

Club Med ORANE issue

Part of a dual equity and equity-linked

offering, the Club Med issue had preferential

subscription rights and was underwritten by a

commitment from shareholder and non-

shareholder investors instead of the banks.

This led to difficult disclosure considera-

tions – providing enough information to

convince shareholders to back the deal

without breaching the rues for listed

companies in France.

The underwriting structure was split so that

shareholders guaranteed a proportional

amount of the deal by committing to exercise

their subscription rights, and non-shareholders

agreed to subscribe to any remaining ORANE.

Wind Telecoms high yield

The Wind deal was structured as part of the

refinancing of the group, and reopened

European high-yield markets as the first bond

sale used to refinance after the credit crunch.

Existing creditors all agreed to the structure,

which was designed to be beneficial to new

bondholders to bring new money in.

The covenant package was also struc-

tured to anticipate a potential lack of bank

funding, building in the ability to refinance the

senior debt facility with bonds, and allowing

for additional refinancing as and when

necessary.

Lloyds’ enhanced capital notes (ECNs) launchedboth a new class of securities and a globalregulatory debate on contingent capitalinstruments. The ECNs intuitively address theneed for a bank to have a countercyclical capitalbuffer by converting to equity once capitalreserves dip below a pre-determined threshold.

The structuring of the securities overcameEU state aid provisions, and incorporated theminto a waterfall structure that allowed existingholders to choose whether to take the ECNs,ordinary shares or a combination of the two.

Allen & Overy acted for the dealer managers,and for the ECN trustee. Freshfields BruckhausDeringer represented the joint global-coordinators, joint sponsors and dealermanagers on the rights issue part of the capitalraising, and Linklaters advised Lloyds TSB andLloyds Banking Group, with Maclay MurraySpens assisting Lloyds on Scottish law.

Debt and equity-linkedLloyds ECNs

Runners-up

L-R: Daniel Fletcher of Allen & Overy, Stephen Griffin of Linklaters, DonaldGuiney of Freshfields Bruckhaus Deringer

“It was the first corporate issue inFrance for more than 20 years, and thefirst time that notes were offered directly to retail investors”



Yorkshire Water

This was a unique deal in the water sector as it

incorporated a co-existence structure to

encourage existing investors to consent to

and come into the new debt. It overcame

clashes with the negative pledge clause to

offer equal security to old and new investors,

with the status of non-participants changed in

the intercreditor agreement to allow subordi-

nation if they acted against the interests of the

group.

The deal also developed an e-voting

model to compensate for the absence of the

monolines as controlling creditor. This allows

voting through investor websites to avoid

individuals having to vote through the clearing

systems.

BNP covered bonds

With an unusual asset class, BNP Paribas’

covered bond programme was originally

planned as an asset-backed transaction, but

converted due to market appetite.

A simple structure therefore had to be

devised around the complex asset pool. A

combination of the traditional true sale

structure and a secured loan structure was

developed.

This allowed a true sale of the loan

portfolios, with the funding of BNP deriving

from the portfolio’s sale proceeds, and a

future reloading of portfolios if appropriate,

which would give rise to a security interest and

funding derived from a secured loan.

Eurus II catastrophe bonds

This €75 million bond issuance covers

sponsor Hannover Re against losses from

windstorms in parts of Europe through to early

2012. The catastrophe bond transaction

succeeded despite the instrument’s

reputation having been damaged following

Lehman Brothers’ collapse.

To overcome doubts, a repo-based

collateral arrangement was structured, with

BNP Paribas as repurchase counterparty.

BNP’s bond portfolio is used to generate

returns, and a tri-party purchase agreement

including Euroclear was established.

The deal was the first time such a repur-

chase agreement had been used to collater-

alise a structured transaction.

UBS covered bond programme

UBS’s covered bond programme was the first

to be established in Switzerland. It is listed in

Ireland and passported across several EU

jurisdictions.

It opens the market beyond the domestic

pfandbriefe legislation with issuances out of

UBS’s London branch backed by a pool of

Swiss residential mortgages.

This structure had to overcome complex

Swiss tax and regulatory rules while remaining

attractive to international investors.

This transaction was specially designed toaccess the expanding commodities market, aviable investment in which is usually difficultto structure.

The Source joint venture between GoldmanSachs, Morgan Stanley and Bank of AmericanMerrill Lynch issues Exchange TradedCommodities (ETCs) that replicate theperformance of certain commodities indices.

A liquid instrument was developed thateliminated the risk of default by swapcounterparties and sold exposure to thecommodities with no credit risk.

Linklaters provided legal, regulatory and taxadvice to Source, with Maples and Calderproviding Irish law assistance.

Structured financeSource ETC programme

Runners-up

L-R: Simon Crompton of IFLR, Joan Ma of Linklaters, Nollaig Murphy ofMaples and Calder

“A combination of the traditional true sale structure and a secured loan structure was developed”



Atrium

Atrium was undoubtedly Austria’s most

innovative deal in 2009. It was the first global

exchange of all Austrian Depositary

Certificates (ADCs) of an issuer listed on the

Vienna Stock Exchange (VSE) into shares,

and the first dual listing of shares on VSE and

Euronext.

It is also the first time that registered

shares have been listed on a regulated market

of the VSE. Before Atrium’s €868 million

($1.29 billion) listing, only ADCs representing

a company’s shares were listed on the Vienna

Stock Exchange (VSE).

Globaltrans

Globaltrans’ $175 million follow-on offering

included the issue of global depositary

receipts listed on the London Stock Exchange.

It was the first ever Russian follow-on

offering combined with the simultaneous

acquisition of majority control of a Russian

company using newly issued shares as

merger consideration, to avoid diluting the

majority shareholder.

The offering was combined with the $250

million acquisition of a 50% stake in OOO

BaltTransService, the Russian railway trans-

portation service operator, from

Transportation Investment Holding.

Heidelberg Cement

The Heidelberg Cement equity offering was

the first time that an offer structure close to

the UK open offering has been used in

Germany. The major shareholders assigned

their subscription rights to one of the global

coordinators and all new shares and the

secondary shares were offered and allocated

to institutional investors upfront.

Allocations were made subject to claw-

back. This allowed free float shareholders that

had not assigned their subscription rights to

subscribe for new shares in the rights offering.

HSBC rights issue

At a time when banks everywhere were

clammering to raise capital, HSBC’s £17.7

billion rights issue was the first ever to include

a full competitive tender process for positions

on the underwriting syndicate. These took

place on the weekend before the launch.

The offering was also the first rights issue

in a decade where American depositary share

(ADS) rights and ordinary shares had been

offered on a registered basis in the US.

This allowed retail investors in the US to

participate. The bank has primary listings in

London and Hong Kong, and secondary

listings in Bermuda and Paris, as well as ADS

listed in New York.

While Lloyds’ contingent convertible bond madeheadlines, the rights issue portion of its offeringwas equally innovative. This was the first rightsissue to include step-up underwriting, which ledto the pricing of the offering after launch. It wasalso the first-ever underwritten liabilitymanagement exercise, and first combined rightsissue and liability management.

Holders of existing Lloyds securities wereoffered four different exchange options whenthey took part in the US exchange offer. Theway these four options interacted wascontrolled through an innovative structure,using two 52-stage waterfalls.

Linklaters and Maclay Murray & Spensadvised Lloyds. Allen & Overy represented thedealer managers and trustee, while FreshfieldsBruckhaus Deringer advised the underwriters.

EquityLloyds rights issue

Runners-up

L-R: Stephen Griffin of Linklaters, Donald Guiney of Freshfields, YannisManuelides of Allen & Overy, Elizabeth Fournier of IFLR

“It was the first rights issue in adecade where ADS rights and ordinaryshares had been offered on a registeredbasis in the US”



Blackrock/Barclays Global Investors

Blackrock’s purchase of BGI might not have been

as legally innovative as some of its competition, but

there’s definitely an argument that it was the most

complex deal for decades. Initially a sale of

Barclays’ iShares division, its auction was won by

CVC for $4.4 billion. But a go-shop provision led to

the offer being broadened, and when Blackrock bid

for the whole of Barclays Global Investors, CVC had

to drop out despite its match right.

The scale of the deal in the asset management

sector ($13.5 billion for a business with $2.8 trillion

in assets) will make it a marker for some time to

come.

Emerald/Sinochem

This was the first City Code bid for a London main

market target by a Chinese state-owned enter-

prise (SOE) and was largely a matter of culture.

The Code aims to prevent an acquirer walking

away once terms have been agreed. Any deal from

a Chinese SOE is subject to numerous and opaque

levels of approval by the government. A long period

of education on both sides eventually led to an

unconditional bid – approval was first won from the

Chinese authorities.

This is the first time that had been achieved:

previous transactions had created a bespoke

condition for Chinese approvals, such as SOE

Sinpec’s 2009 offer for Addax Petroleum, which

was governed by Canadian takeover rules.

Jennington/KazakhGold

The reason this deal is nominated can be summed

up in a single sentence: it was the first cross-border

takeover using Russian shares as consideration.

Given previous uncertainty about taking security

and offering Russian shares, that’s a big step.

And the size of the Russian market for

potential acquirers also makes it a powerful

precedent. Jennington International, an indirect but

wholly owned subsidiary of Polyus Gold bought

50.1% of KazakhGold – the largest gold mining

company in Kazakhstan – for $300 million. The

company’s GDRs were listed on the London Stock

Exchange.

Qatar/VW

Unwinding Porsche’s massive derivatives position

on Volkswagen shares was not easy. The cash-

settled options were arranged by a small outfit

called Maple Bank that was effectively covering $7

billion to $8 billion of exposure. The documentation

underlying them was not clear. Porsche needed

help but no one wanted to take on the market,

counterparty or legal risk.

The Qatar Investment Authority ended up

acquiring the options, giving it a 17% stake in VW

and 10% in Porsche. But it took a lot of financial

engineering for the deal to work, with Credit Suisse

taking on the cash-settled options, giving QIA

physically settled options and covering off the

counterparty risk by syndicating it several other

banks. And because Porsche and VW had

financing arms that would create a regulatory

burden if anyone owned more than 10% of them,

Credit Suisse had to warehouse the derivatives

with a separate set of banks (all holding 9.9%) and

could only allow QIA to acquire 9.9% of the shares

initially – so the Authority wouldn’t be treated as a

financial institution either.

The deal was unprecedented in both structure

and scope. But the increased regulatory capital

requirements of banks mean that many will begin

looking at synthetic structures for anchor investors

in the coming year.

RWE/Essent

This was a private M&A deal that was structured as

a public M&A transaction. The shares in Essent

were held by 136 provincial and municipal share-

holders across the Netherlands, who each had to

vote on whether to sell their shares.

But as it would have been impractical for them

individually involved, Essent agreed terms with

RWE and then had to find 80% agreement from

the provinces. More important, though, was the

ability for RWE and Essent to alter the terms of the

deal without a vote. That flexibility proved essential

as the reaction to the deal fluctuated, with several

key shareholders changing their mind halfway

through (including one that held a 30% stake).

The deal was unprecedented both in terms of

that flexible offer, sale and purchase agreement,

and the size and national importance of Essent. The

latter was proven by ongoing litigation.

The acquisition of Swiss reinsurer Paris Re byits Bermudan competitor Partner Re wascomplicated by plurality of jurisdictions.

Paris Re is a Swiss-incorporated publiccompany listed in France, while Partner Re isBermuda-incorporate and listed in New York.It is rare for a stock-for-stock takeover inFrance to involve a company incorporatedelsewhere, and little-used rules applied.

The French regulator, Autorité des MarchésFinanciers, was concerned about the precedentit would set for future deals and took thematter to its governing council on more thanone occasion.

M&A

Runners-up

L-R Phillip Mills of Davis Polk & Wardwell, Hansjürg Appenzeller ofHomburger, Nikolaos Andronikos of Sullivan & Cromwell, Daniel Bravermanof Cleary Gottlieb, Rudolf Tschäni of Lenz & Staehelin

Partner Re/Paris Re



Apollo/Infineon

Germany’s two-tier board system, with both a

management and supervisory level, can create

problems for M&A. Apollo made control of the

supervisory board of Infineon, and having its own

chair of that board, a prerequisite for the funding of

the transaction. The conditional structure was

relatively simple, but it is the first time this has been

successfully done in Germany and will be used as a

precedent.

There is also an ongoing debate as to whether

a back-stop fee, like that charged by Apollo for its

capital increase, is legal under German law on

financial assistance. The lawyers came up with a

sliding scale whereby Apollo gradually reduced its

fee depending on how many shares it ended up

buying in Infineon.

Arcus/Babcock & Brown

Arcus will definitely set a precedent. Nearly all infra-

structure funds are usually ‘badged’ – owned by

larger banks – but Arcus began a trend for

management to buy out its parent. It was an

audacious deal against the background of failure

by Challenger and a retreating Macquarie, and the

complexity was driven by assets all over the world.

Brawn/Honda

A long-time client of Taylor Wessing, Ross Brawn

had to outflank several counter bids for Honda

before the Formula 1 team accepted that Brawn

was the right option. The planning, negotiation and

execution all took place under time pressure,

eventually closing two weeks before the 2009 F1

season began in March. The firm then continued

the advice through the rest of the year, culminating

in Daimler and Abu Dhabi investment house Aabar

acquiring a 75.1% stake in the Brawn GP team.

CVC/Anheuser Busch

Anheuser Busch’s auction of its eastern European

brewing business was a $2.23 billion transaction

across nine jurisdictions. But really this is a story of

trying to squeeze out shareholders in Serbia and

Croatia. In those two jurisdictions the local law

ignores any overarching agreement on price, either

as to when it is set or when a mandatory offer has to

be made to minority shareholders. In order to avoid

speculators driving up the price once an

announcement was made, the deal was structured

specifically so it triggered a takeover offer on the

date the international agreement was signed and

the price was the average of the past three months.

The takeover rules in both countries had never

been used before in a deal of this sort.

MidEuropa/Invitel

This was a workout before anyone called it a

workout. Invitel was in trouble, with too much debt

and an overcomplicated financing structure.

MidEuropa Partners knew the company well,

having previously owned half of it, and volunteered

to help. It bought TDC’s 64% stake and $1 a share

for the rest, despite the stock trading at more than

five times that – principally because there was such

a volume of debt to sort out. MidEuropa acquired

87% of outstanding PIK notes in a tender offer (as

well as securing amendments to them), its

subsidiary Magyar Telecom bought into two other

series of notes, one shareholder loan was bought

out while another was repaid, and a forward start

facility was agreed on the lending facility.

A tripartite M&A deal like this, done through a

debt offer and all negotiated before the target got

into trouble, was unique.

Permira/NDS

One aspect that was particularly difficult with

Permira’s takeover was the test for the shareholder

vote, which was 75% and a majority in number.

Given that several hedge funds were involved, and

the large block of ADR holders only counted as one

vote, the deal could easily have been scuppered by

some minor players. So the structure needed to

look through the ADRs to their underlying holders,

which was enabled by the English courts.

Equally the takeover arrangements, whereby

News Corporation ended up with a 49% stake in

NDS alongside Permira’s 51%, with NDS

controlling part of the acquisition financing despite

being majority owned by News Corporation, was

not simple. All NDS series A shares were

cancelled, together with 67% of the series B

shares (the latter in exchange for a mix of cash and

vendor note), before NDS could issue 51% in new

shares to Permira.

This was the first time that a private-equity housesuccessfully pulled off a loan-to-own strategy. Notonly that, but when Oaktree began to buy upCountrywide’s debt in order to try and takecontrol, existing sponsor Apollo began doing thesame thing to maintain its seat at the table – thiswas also unique. Oaktree brought in fellow fundAlchemy to help with the financing and Apollobrought in Polygon. Together they cutCountrywide’s debt to £170 million and provided£75 million in new capital, and shared control ofthe company.

This was also the first time a scheme ofarrangement had been used in the UK with asimultaneous Cayman scheme and simultaneousChapter 15 organisation in the US.

Linklaters advised Oaktree, Slaughter andMay worked for Castle and Wachtell LiptonRosen & Katz for Apollo. Freshfields BruckhausDeringer and Walkers also advised.

Private equityOaktree/Countrywide

Runners-up

L-R: Roy Papatheodorou of Linklaters, Donald Guiney of Freshfields, GavinBrown of Slaughter and May



Glitnir

Iceland’s laws did not cover restructuring bank

assets until 2009. So when Glitnir, one of the

country’s largest banks needed restructuring, the

firms advising it had to force through new legis-

lation in Iceland. The restructuring was also the first

to provide comprehensive creditor guidance in the

form of an online information memorandum that

addresses international disclosure standards.

There were other firsts too. It was the first to

provide information on the claims process, claims

filings for its majority equity interest in the new bank

(named Islandsbanki) set up by the Icelandic

government, and the first to develop a compre-

hensive system for claims administration and

disposition.

Honsel

The Honsel restructuring shows how, with the

majority senior lenders on board, a pre-pack out-of-

court restructuring involving a debt-for-equity

swap can be successfully achieved in Germany –

even with dissenting senior and junior creditors.

Through an innovative application of the

transfer and release provisions in the intercreditor

agreement, combined with a German share pledge

enforcement, Honsel and a majority of the senior

creditors were able to successfully implement a

restructuring that not only eliminated or left behind

the out-of-the-money junior creditors, but also

crammed down the non-consenting senior

lenders.

IMO Car Wash

In a landmark contested restructuring, the

mezzanine lenders disputed IMO Car Wash’s

schemes of arrangement as being unfairly preju-

dicial, arguing that the valuations obtained by the

group and the senior lenders were flawed.

After hearing valuation evidence from all

parties, the High Court found it appropriate to

sanction the schemes. This was the first contested

scheme of arrangement in the economic downturn.

The decision gives guidance as to the basis on

which valuations of distressed assets in restruc-

turings should be carried out and in particular, for

schemes of arrangement.

Rolf Group

This structure effectively resolved a conceptual

Russian law issue relating to security ranking and

created pari passu Russian law security in favour of

all bank lenders.

Refinancing and settling the bank loans

involved simultaneous restructuring of Eurobonds

and a strategic investor’s acquisition of a major

stake in Rolf Group.

Schoeller Arca Systems

The Schoeller Arca Systems restructuring will have

a significant impact on a number of high-profile

restructurings, specifically those where value

breaks in the mezzanine.

It is the first Dutch court ruling in respect of a

Dutch pre-pack where an enforcement sale of a

Dutch holding company was pre-agreed between

the senior lenders, a buyer and the company, while

its subordinated bridge lenders opposed the sale.

Thomson

This involved the restructuring of e2.8 billion of

Thomson’s debt under its revolving credit facility

and US private placement notes through a pre-

pack sauvegarde. Lawyers also had to convert part

of the debt into equity (via a rights issue

backstopped by the creditors), notes redeemable

in shares and other hybrid notes, with the remaining

debt being restructured into a new multicurrency

secured term loan facility and secured US private

placement notes.

It was the first pre-pack sauvegarde of a public

company in France and first restructuring involving

the Isda Small Bang CDS auction process

Yell

Yell’s £4.46 billion refinancing was a first-of-its kind

debt restructuring and linked equity issue, which

prevented the company from going into adminis-

tration. The Finco debt buyback proposal worked

because of the support of a large proportion of a

debt syndicate that was prepared to back a cash-

generative borrower. Obtaining 95% support was

difficult, but proved to be more palatable than the

insolvency-style alternatives.

It was the first use of a Finco debt buyback to

get lender consent to change terms of debt facil-

ities under 100%.

The McCarthy & Stone restructuring washighly complex and one of the firstrestructurings of the post-Lehman downturn.Firms had to develop new solutions to unlockthe complex financial structures created overthe previous three to five years.

As one of the first leveraged buyoutrestructurings and one of the most complex inthis downturn, the market has looked toMcCarthy & Stone as a precedent. It hasalready been mirrored and used as the templatefor other deals, such as the IMO Carwashrestructuring.

Freshfields Bruckhaus Deringer advisedMcCarthy & Stone, Linklaters advised thesenior lenders and Allen & Overy representedthe mezzanine steering committee.

RestructuringMcCarthy & Stone

Runners-up

L-R: Simon Crompton of IFLR, Stephen Griffin of Linklaters, Richard Tett ofFreshfields Bruckhaus Deringer, Okko Behrends of Allen & Overy



New Dawn

The financing for the construction, launch and

operation of a commercial communications

satellite serving Africa involved complicated

jurisdictional considerations, with English,

French, New York, Bermudan and Mauritian

legal opinions required.

The contract was structured so that risks

were allocated to the most appropriate

manager, and so that if an uninsurable loss

occurred a substitute satellite could be

switched in to maintain service. The revenue

from maintaining the contract with key

customers would then be used to pay the

lenders’ outstanding debt.

A2 motorway

A particularly innovative financing structure

had to be developed for this transaction, to

accommodate the involvement of the

commercial banks, the European Investment

Bank and the State Treasury of Poland.

The EIB’s rigid terms meant that

borrower-friendly concessions could not be

made, and a structure with different terms for

lenders on what constituted a trigger and what

would happen if they were triggered.

The state support meant that the deal was

elevated to sovereign risk level, which led to

yet another set of lending and disclosure

terms. A State Treasury guarantee was

obtained, which covered the concessionaire’s

payment obligation and ensured a more

flexible approach from the EIB.

Iberwind

The refinancing of Iberwind’s portfolio

involves true project bonds, but with lenders

having recourse only to the project asset,

instead of the usual credit enhancement

features.

The bonds can be cleared through

domestic channels for tax purposes, but are

linked to international clearing houses so as to

be accessible to international investors. A

clearing procedure was also developed that

netted off payments between the banks and

the issuer, so that only net payments were

made at closing.

The A5 motorway project in Germany was thefirst to combine EIB senior debt with a loanguarantee for trans-European transport (LGTT),and the first A model where a financial investorbecame co-sponsor of the project.

The LGTT is offered to sponsors, projectcompanies and investors involved in projectwith traffic risk and uses contingent mezzaninefinancing to absorb the risk. This encourageslending on traffic projects as it removes riskfrom the senior lending banks, but means acomplex intercreditor agreement had to bedeveloped for the extra layers of debt.

Clifford Chance advised the bankconsortium, while Freshfields counselled thesponsors. The EIB was assisted by Simmons &Simmons, and Strabag was represented by DLAPiper. Norton Rose was legal adviser to theGerman Federal Ministry of Transport,Building and Urban Affairs.

Project finance A5 motorway PPP

Runners-up

L-R: Johnny Myers of Clifford Chance, Nicholas Bliss of Freshfields, ElizabethFournier of IFLR

“A clearing procedure was alsodeveloped that netted off paymentsbetween the banksand the issuer”

Documents

ASIA TEAMS OF THE YEAR International firm of the year ... IFLR/April 2010 ASIA TEAMS OF THE YEAR Strong relationships with Asian issuers fuelled Clifford Chance’s work this year