Pinsent Masons grows its Financial Services offering in Dubai

Multinational law firm, Pinsent Masons, has appointed Banking & Finance partner Matthew Escritt to lead the firm’s Banking & Finance practice in the Middle East, based in Dubai.

Matthew joins from Norton Rose Fulbright, where he has been for the past 19 years, with the past eight spent as partner in the banking and finance team. During this time he has worked in London, Moscow, Bahrain, Singapore and Dubai.

Matthew is a banking and finance specialist, advising on all areas of structured cross border finance, including syndicated lending acquisition, development finance, asset finance, vendor finance, and structured trade and commodity finance. He is familiar with both conventional and Islamic finance funding structures. He also advises on financial restructuring and insolvency mandates. Based in Dubai, he will be leading the Banking & Finance practice in the Middle East (within the Finance & Projects group) and will focus primarily on clients in the Financial Services sector.

Commenting on Matthew’s appointment, Michael Watson, head of the Finance & Projects group at Pinsent Masons said: “Matthew’s reputation precedes him and we look forward to welcoming him as head of our banking and finance practice in Dubai. His experience and expertise will greatly strengthen the practice, enabling them to deepen relationships with existing clients as well as developing new ones. His appointment is another fantastic addition to our growing international capabilities.”

Alexis Roberts, head of the Financial Services sector at Pinsent Masons added: “Matthew’s appointment is a pivotal one in increasing our financing bench strength and will enable us to better support our clients within the Financial Services sector. His breadth of experience and the clients that he’s worked with will allow us to grow our offering across the sector. We greatly look forward to him joining the team.”

Matthew Escritt, head of Banking and Finance in the Middle East added: “I am excited to have been given the opportunity to lead Pinsent Masons’ Banking & Finance practice in the region and to be part of an international team tasked with growing a strategically important practice area to complement the firm’s existing strengths. It will also ensure that we are able to provide vital, full-service support to our clients as they navigate today’s challenging business environment. Given the diverse talents of the individuals involved and the well-known strengths of the existing practice I am confident that we are well placed to achieve our goals.”

Adding to the growing multinational Finance & Projects group, Matthew’s appointment follows that of Anthony Morton in Frankfurt, James Harris in Asia, Jim Hunwick in Sydney and Eran Chivka in Paris.

DLA Piper advises VEON Holdings B.V. on its RUB100bn refinancing

DLA Piper has advised VEON Holdings B.V., a member of the multinational telecommunications VEON group, on the RUB100 billion (approximately USD1.5 billion) refinancing of its facilities with Sberbank of Russia.

The new term loan facility entered into with Sberbank on 3 June 2020 will be used to refinance and extend the maturity of the existing loan between Sberbank and VEON Holdings, as well as to provide additional funds for VEON Holdings’ general corporate purposes.

DLA Piper’s partner Mark Dwyer, who led the team advising on the transaction, said: “The refinancing forms part of VEON’s continued objective to improve its global capital structure, and is a another transaction which strengthens the relationship between DLA Piper, utilising its cross-border capabilities, and a key global client.”

The DLA Piper Finance team was led by London-based partner Mark Dwyer, legal director Mei Mei Wong and associate Elvis Dangol. They were assisted by Amsterdam-based partner Gerard Kneppers and advocaat Jocelyn van Moergastel, as well as Moscow-based partner Karen Young and legal director Alexei Kolesnikov.

Kirkland Advises Sterling Group’s $2 Billion Oversubscribed Fund V

Kirkland & Ellis counselled The Sterling Group, an operationally focused middle market private equity firm, on the closing of Sterling Group Partners V, LP (together with its parallel fund, “Fund V”). Fund V was oversubscribed and closed at its $2 billion hard cap. The majority of Fund V’s capital was committed by returning investors. In addition, The Sterling Group, welcomed several new investors that expanded the firm’s investor base in the United States, the Middle East and Asia.

Read the company press release from Sterling Group

The Kirkland team was led by investment funds partners Matt Nadworny and Brian Delaney and associates Christine Wilson, Samara Sanderson, Nathan Wolcott, Nathan Judd and Josh Wilson; tax partner Stephen Butler and associate Victoria Chang; and employee benefits partner Liz Dyer.

Global Top 40 mining companies resilient in face of COVID-19

The global Top 40 mining companies are so far weathering the COVID-19 crisis but should take advantage of relative stability to adopt strategies to mitigate against further economic and social risks, according to PwC’s Mine 2020 report.

PwC’s forecast for 2020 suggests the big miners will take a modest hit to EBITDA (earnings before interest, tax, depreciation, amortisation & impairment) of approximately 6%. This follows a strong financial performance in 2019 – with revenue up 4% to US$692bn and market capitalisation up 19% to US$898bn (though since reduced to US$752bn on 30 April 2020). On this basis PwC believes the Top 40 are in a strong and resilient position to weather the economic uncertainty created by COVID-19.

Despite this positive outlook, the report cautions that mining companies will need to adapt to long-term impacts caused by COVID-19. Miners may need to think about de-risking critical supply chains and investing more in local communities. A shift towards localisation in supply chains and for smaller deals in local markets, as well as different forms of community engagement, may turn out to be enduring consequences of the pandemic.

Jock O’Callaghan, global leader for mining and metals at PwC, says: ‘In some respects, the mining sector is well-situated in the wake of COVID-19. Mining companies have strong finances and are mostly still operational, albeit with some level of increased precautionary and preventive control.

‘But the longer-term impacts remain uncertain, and ongoing disruption is likely. Top 40 miners should take advantage of their current position of financial stability to revisit their strategies. Doing so will ensure their businesses can enhance their resilience over the long term and meet the demands of the global economy – meeting their aspiration to resource the future.’

A changing outlook for investment & deals

Capital expenditure was up 11% to US$61bn in FY19, according to Mine 2020. PwC expects capital expenditure will slow in 2020, freeing up cash flows, and giving miners the capacity to pay dividends should they choose to do so.

PwC doesn’t expect many mega-deals to take place in 2020 due to increased economic uncertainty and practical constraints of site visits and inspections. However, the current conditions provide opportunities for the Top 40 to capitalise on smaller acquisitions in their local markets.

The enterprise value of mega gold deals totalled US$19.2bn in FY19. Gold deals are not likely to recur to the same size or quantum as in recent years.

Cybersecurity requires attention

Currently just 12% of mining and metals companies’ CEOs are extremely concerned about cyber (down from 21% in FY18 and 14% in FY19). Yet Mine 2020 notes that over a similar period the number of reported cyber breaches among mining companies increase fourfold.

Jock O’Callaghan says: ‘Cybersecurity should be an integral part of the Top 40’s safety and business strategies. Miners should take the opportunity, given their relative resilience, to leverage their strong safety cultures to embed the concept of ‘cyber safety’, which like other forms of safety, is non-negotiable.’

Growing expectations around ESG

Although Mine 2020 has found that most large miners are moving in the right direction on ESG disclosure, some are performing better than others. Only 11 of the Top 40 companies (28%) are setting public ESG commitments and targets, reporting consistently against them, and linking executive and management performance to achieving them.

No one commodity group is outperforming any other. But given rising stakeholder expectations, all Top 40 miners should have moved past the stage of general or variable commitments about ESG.

Jock O’Callaghan says: ‘How should mining come together to take collective ownership of ESG and accept the necessary accountability and transparency that will ensure they are taken seriously? It is time for miners to sit down and work towards a common global standard about what constitutes responsible mining and how companies will report their performance against it.’

£14.7 billion raised in secondary offerings since the start of the year

Overall secondary offerings have reached £14.7 billion across 135 transactions in the UK for the year to date, according to new analysis from Deloitte. A secondary offering refers to the sale of shares in a listed company occurring after a company’s IPO, with the transaction taking place through either London’s Main Market or AIM.

Prior to the lockdown in the UK, the amount of money raised in January and February 2020 was almost twice that of the same period in 2019 (£3.4 billion vs £1.9 billion), signalling increased business optimism. Despite a drop in March, April and May both saw elevated levels of equity fundraising in London.

Chris Nicholls, Head of Equity and PLC Advisory at Deloitte, said: “The UK market has very much been open for existing listed companies seeking additional equity capital, including those from the retail and hospitality sectors. Typically this has been to strengthen balance sheets and improve liquidity in the wake of the pandemic. I would expect fundraising activity to continue into the rest of the year, albeit with only a modest trickle of IPOs.”

Since 23 March this year, the FTSE 100 and S&P 500 have risen 29.8% and 42.8% respectively, boosted by the gradual reopening of world economies and bold government and central bank stimulus measures. However, volatility levels remain elevated compared to long-term averages with the global VIX Index currently in the region of 24, substantially higher than the 2019 average of approximately 15.

Chris Nicholls concludes: “Whilst volatility has substantially reduced from March levels, any VIX reading above 20 traditionally represents a difficult environment in which to launch IPOs. However, global equity markets are recovering strongly from the unprecedented shock to the economy caused by COVID-19.”

Latham & Watkins advises Aernnova on its TLB Refinancing

Aernnova, a major aero structures company and portfolio company of TowerBrook Capital Partners, Peninsula Capital and Torreal, has completed a covenant-lite refinancing consisting of a €490 million term loan B and a €100 million revolving credit facility, proceeds of which will be used for long term refinancing, potential investment through organic growth, international expansion, acquisitions and working capital.

Aernnova, which has a global presence and is head-quartered in Spain, designs, manufactures, and supplies aero structures and components including fuselage sections, tail assembly, and wing structures to major aircraft manufacturers. TowerBrook Capital Partners, a global investment management firm, is a strategic investor in Aernnova.

Latham & Watkins acted for Aernova and its shareholders, including TowerBrook Capital Partners, in the transaction with a team led by Madrid corporate partner Ignacio Gomez-Sancha, London finance partner Charles Armstrong, and Madrid finance partner Fernando Colomina; assistance was provided by London finance associates John Hutton, Michael Spurritt, and Chen Yang Sia, and Madrid finance associates Pablo Alarcon, and law clerk Claudia Mencia. Tax advice was provided by Madrid partner Jordi Dominguez and counsel Ivan Rabanillo, with London partner Karl Mah and associate Alexandra Liu also advising.