Travers Smith, Slaughter and May and Hogan Lovells all advised as Tata Steel last month signed a long-awaited agreement to separate its business from the £15bn British Steel Pension Scheme (BSPS), in what is the largest pensions scheme restructuring ever in the UK.
As a result of the separation, achieved through a regulated apportionment arrangement, Tata will pay £550m to BSPS, which will also be given a 33% equity stake in the steel company. With the support of The Pensions Regulator and the Pension Protection Fund (PPF), a new BSPS will be created after an assessment period.
Slaughters advised longstanding client Tata on the restructuring, with pensions and employment partners Charles Cameron and Phil Linnard, restructuring partner Ian Johnson, finance partner Andrew McClean and M&A partner Padraig Cronin comprising the team. PwC also represented Tata.
‘This restructuring is unprecedented in its scale.’
Charles Cameron, Slaughter and May
The BSPS trustee has been a Travers client for ten years and the firm represented it on the restructuring with a team that included pensions partners Paul Stannard, Dan Naylor and Susie Daykin, finance partners Jeremy Walsh and Edward Smith, corporate partner Adrian West, tax partner Richard Stratton, financial services and markets partner Tim Lewis and derivatives partner Jonathan Gilmour.
Hogan Lovells pensions partner Claire Southern led on this deal for the PPF along with insolvency partner Lawrence Crowley and corporate partner Nicola Evans. This was the first large restructuring deal that Hogan Lovells has advised the PPF on.
BSPS had been seen as a barrier to a potential merger of Tata with Germany’s thyssenkrupp, but the separation may now accelerate merger discussions.
Slaughters’ Cameron noted: ‘This restructuring is unusual in a number of ways and unprecedented in its scale. It is by far the largest pension scheme restructuring carried out in the UK.’