Corporate events for Covenant services
What are corporate events?
From high-profile mergers, acquisitions and restructuring to internal re-organisations and non-core disposals, corporate events and transactions cover a wide range of situations.
These can be fast-paced situations and often extremely complex. For trustees and the sponsor, clearly understanding the impact an event could have on the risk dynamics faced by a scheme remains critical. To do this, trustees need to be closely involved and consider the key areas of a corporate event in order to determine its impact on the scheme, employer covenant and different stakeholders. In an ideal world the pension scheme will be involved in conversations from the outset given, in our experience, proactive engagement from trustees is critical to help the outcome for the scheme and its members.
Certain high-profile transactions may see pension trustees being thrust into the public spotlight and becoming subject to in-depth scrutiny from The Pensions Regulator.
Key areas to consider
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Strategic benefits
Strategic benefits of the transaction, together with the risk it introduces
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Impact on a sponsor’s capital structure
The impact on a sponsor’s capital structure (including increased debt and use of proceeds)
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Value leakage
Value leakage either as part of the deal or post deal
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Impacts on trustee powers
The potential triggering of a section 75 debt and / or impacts on trustee powers
We work with you to:
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1
Provide independent advice by covenant experts during fast-paced, complex corporate transactions – including mergers and acquisitions, disposals and restructurings. -
2
Assess the key challenges faced by your pension scheme as a result of these transactions. -
3
Evaluate the likely impact of corporate transactions on your pension scheme and its journey plan. -
4
Advise you on innovative solutions beyond one-time mitigation to mitigate any adverse impact and update / protect the journey plan of the scheme in the context of changes to covenant risk dynamics, such as contingent assets, enhanced downside protections and information sharing protocols.
With Cardano’s breadth of skills and depth of experience leading trustees through corporate transactions and restructurings for the best part of 20 years, our client teams are able to seamlessly hit the ground running in any situation. We are also able to supplement our core teams with relevant subject matter specialists from across our experienced team (e.g. Takeover Code, solvent stressed restructuring scenarios) as needed to ensure trustees receive the advice they need quickly.
Our appreciation of capital agendas means we often find the key leverage to put trustees into a strong negotiating position, while focusing on thoughtful stakeholder management to unlock deals and help achieve a win-win outcome for all stakeholders. We also have deep insight into The Pension Regulator, which helps us to ensure trustees take a position and agree a deal that meets The Pension Regulator’s expectations (and addresses the contribution notice and material detriment tests).
In addition, given we are primarily a pensions-focused business unlike some of our competitors, we can provide truly independent advice with your interests at the core of our approach.
Read about our expertise in different corporate events
Strategic advice to reduce impact on sponsoring employers
