Reprinted from ACQUISITIONS MONTHLY December 2010 © Thomson aqm-e.com

RESTRUCTURING WORLD FENDS OFF GLOBAL

he global financial crisis caught up The key to the transaction was the 0 Martinsa Fadesa, the real estate with the Middle East when in early recognition by all stakeholders that company, which at €7bn became Spain’s November 2009 the Government the company needed time to rebuild asset largest in-court restructuring ever; T of Dubai announced a request for value and execute an orderly realisation a six-month standstill from of assets to repay debt. With the Govern- 0 Panrico, the Spanish pastry producer lenders to industrial conglomerate Dubai ment of Dubai committing substantial acquired by Apax for €880m in 2005, but World and its real estate development sub- new funds negotiations with lenders pro- which is now in the hands of the lenders; sidiary Nakheel, which owed a combined gressed relatively quickly and principle eco- total of US$26bn to 93 local and interna- nomic terms were agreed with the Dubai 0 Bodybell, the Spanish beauty products tional banks. Ranks of bulldozers, employed World Co Com within six months of the cri- retailer impacted by reduced consumer to develop Dubai, were left sitting idle. sis breaking. spending, which required a comprehensive For a while the crisis took on sovereign Financing of US$10bn from UAE neigh- balance sheet restructuring; dimensions, with Dubai’s government under bour helped smooth the deal, pressure to give untenable debt guarantees, which was agreed by all lenders in October 0 Stabilus, the €450m-indebted German fears of contagion across the economy 2010. Transaction subject to documentation maker of gas springs, which was heavily and banking system of the United Arab Emi- with completion expected in early 2011. exposed to the automotive sector rates, and the reputation of Dubai as a finan- Other notable restructuring deals in downturn and was restructured without cial hub and celebrity lifestyle destination at progress or completed in 2010 include: resorting to a debt-for-equity swap, but by stake. using a profit participating loan structure; Deloitte acted as chief restructuring officer 0 Oerlikon, the publicly listed Swiss con- and adviser to Dubai World and Nakheel glomerate, affected by severe cyclical 0 Fleet Street Finance Two, a €3.5bn CMBS alongside Rothschild and Clifford Chance. downturns across its business divisions, structure where the underlying assets were Moelis & Company and Latham & Watkins which achieved a SFr1.3bn reduction in net the department stores of Karstadt, were advisers to the Government with KPMG debt; Germany’s largest department store chain and Allen & Overy advising the lenders. and largest corporate insolvency ever; The deal became the largest and most com- 0 Activis, the Icelandic-Bulgarian generic plex EMEA restructuring of 2010, sorting pharmaceuticals company (the fifth-largest 0 Wind Hellas, at €3.7bn, the largest pre- out a mismatch of short-term debt maturities such business in ), which with packaged administration for the third against long-term asset profiles. Crucial to the more than of €5bn indebtedness was largest mobile telecommunications deal’s success was the separation of Nakheel, Europe’s largest hung LBO; business in Greece. where the operational problems and sys- temic, local liabilities were more critical, 0 CenterParcs, the UK short-break 0 Borsodchem, the €1bn Hungarian from Dubai World, which contained a health- holiday park provider, which became the chemicals maker, hit by a severe cyclical ier mix of global infrastructure and private first European consensual CMBS restruc- downturn, which required new money and equity assets. turing; a balance sheet restructuring.

Restructuring deal of the year: Dubai World