Payzone Plc on major debt and capital restructuring
Matheson Ormsby Prentice, as lead legal counsel, has advised Payzone Plc, the AIM listed electronic processing and payments’ group, on the terms of a debt and capital restructuring involving its existing RBS-led banking syndicate and a new private equity investor, Duke Street - which placed an enterprise value of approximately €109 million on the Payzone business.
This particularly complex transaction is significant and interesting because it involved one of the first major debt-for-equity swaps between an Irish company, in need of financial restructuring, and its senior lenders since the beginning of the current financial crisis as well as a sizable new private equity investment.
The transaction, which took the best part of a year to structure and implement, involved Matheson Ormsby Prentice counselling Payzone plc and its board on a wide range of financing and restructuring options in conjunction with Rothschild, PWC and the group’s UK legal adviser, Freshfields, before advising on the implementation of the final agreed terms. Because of the financial situation of the company, its listed status, the competing interests of its stakeholders and the private equity angle, the restructuring presented a variety of challenging corporate, insolvency, banking, tax and AIM related issues.
Under the terms of the restructuring, Payzone Plc’s subsidiaries were sold by bank appointed receivers to a new holding company, the group’s senior banking debt of approximately €320 million was reduced to a sustainable level of €82 million and Duke Street made an investment of €45 million for a controlling interest in the restructured group. The deal further involved the members of the group’s banking syndicate and key management becoming shareholders in the restructured group, with participating management also being advised by Matheson Ormsby Prentice.
The Matheson Ormsby Prentice restructuring team was led by Corporate Finance Partners, Robert Heron and Fergus Bolster, and included Senior Associate John McRedmond (Corporate Finance), Partners, Tony O’Grady (Insolvency), Patrick Molloy (Banking), Paul Glenfield (Employment) and Alan Connell (Tax) and Senior Associate, Mark Rasdale (Technology).
The transaction called for a cross-disciplinary approach, drawing on the strength and depth of the firm’s expertise and resources across a number of practice areas and involved co-ordinating the activities of local counsel across six European jurisdictions in which the Group had material operations.
The banking syndicate was represented by Allen & Overy while SJ Berwin represented Duke Street.
Matheson Ormsby Prentice advises distressed companies, their lenders, shareholders, other stakeholders and new investors by providing extensive experience and expertise in restructurings. The firm handles both out-of-court restructurings, and restructurings which arise, or are effected, through formal insolvency processes. Matheson Ormsby Prentices has represented and counselled clients on a variety of restructurings in a wide range of industries including, in addition to the Payzone transaction, restructurings involving Beacon Medical Group, Agcert Plc, Qualceram Shires Plc, ISTC, Golden Disks, Fate Park Limited, Setanta Sports, Linen Supply of Ireland and O'Brien's Sandwich Bars.