Finance and Capital Markets

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A restructuring plan completed earlier this year by Smile Telecoms notches up a number of firsts.

By James Chesterman and Tom Davies

African telecommunications provider Smile Telecoms Holding Limited, incorporated in Mauritius, successfully completed a restructuring plan (the Plan) under Part 26A of the UK Companies Act 2006 at the end of March 2021.

The Plan features a number of novel actions, including:

  • The first time a non-European company has used the Part 26A restructuring plan since its introduction in June 2020
  • The first time any company has layered in new money on a super-senior basis by way of a cross-class cram-down, a feature of the Part 26A restructuring plan not available under schemes of arrangement
  • The first time that sanction of a restructuring plan had to be adjourned due to the fact that a closing condition, which was subject to the discretion of a third party (namely a development finance institution acting through its representative, the Public Investment Corporation (PIC) of South Africa) rather than the court, remained unsatisfied at the initial time of sanction, which went to the core of the Plan’s effectiveness

This blog post takes a closer look at the implementation of the Plan.

Proposals reflect growing investor focus on the ESG performance of listed companies.

By Chris Horton, James Inness, Rob Moulton, Anna Ngo, and Johannes Poon

The UK Financial Conduct Authority (FCA) has launched a consultation setting out proposed changes to its Listing Rules (LRs) and Disclosure Guidance and Transparency Rules (DTRs). The proposals seek to: (i) increase transparency for investors on the diversity of listed company boards and executive management; and (ii) improve considerations of broader diversity aspects within diversity policies and related disclosures by listed companies.

The consultation opened on 28 July 2021 and will close on 20 October 2021. Subject to consultation feedback and FCA Board approval, the FCA will seek to finalise the relevant rules by late 2021.

In Lexology’s Getting the Deal Through: Digital Health 2021 (UK) Latham & Watkins considers the key regulatory and transactional issues faced by market players and practitioners.

By Frances Stocks Allen, Oliver Mobasser, Sara Patel, Mihail Krepchev, and Robbie McLaren

The UK has an active digital health market comprising both the private and public sectors. Venture capital funding in the digital health sector has increased significantly in recent years, with the majority of investment appearing to come from private investment firms. However, public financing through IPOs is also on the rise. The COVID-19 pandemic has further heightened the positive and dynamic investment climate for digital health technologies in the UK. In particular, the pandemic has highlighted the need for resilience in healthcare systems, including through digital health solutions. Consequently, the pandemic has significantly accelerated uptake of digital health solutions in the UK and related investment opportunities, as well as challenged structural barriers that previously slowed investment in digital health innovations.

Italian Securities Commission returns to ordinary reporting requirements for listed issuers.

By Antonio Coletti, Isabella Porchia, Guido Bartolomei, and Marta Negro

The Italian Securities Commission (CONSOB), by press release dated April 12, 2021, announced its decision to end the more stringent reporting requirements originally introduced on April 9, 2020, as a response to the impact of the COVID-19 pandemic on financial markets. While the more stringent requirements were renewed in three month increments, they will not be renewed after April 13, 2021. Starting April 14, investors will be required to comply with the pre-pandemic reporting requirements.

By Rob Moulton, Nicola Higgs, Anne Mainwaring, Becky Critchley, and Anna Lewis-Martinez

The latest edition of our Private Bank Briefing provides a roundup of legal and compliance issues impacting private banks and their clients from Q1 2021.

In this edition, we cover some of the key regulatory announcements relating to MiFID II and the impact of COVID-19, the latest on Brexit, the FCA’s announcement on the dates for cessation of LIBOR benchmark settings, and the FCA’s…

The recommended reforms aim to make the UK’s listing regime more competitive while maintaining high standards of corporate governance, shareholder rights, and transparency.

By Chris Horton, James Inness, and Anna Ngo

A new independent review (the Review), led by Lord Hill, has been released that provides recommendations on how the UK can improve its listings regime. Published on 3 March 2021, the Review aims to impart recommendations that will improve the process of raising equity capital on the UK public markets, whilst also maintaining high standards of corporate governance, shareholder rights, and transparency.

More stringent reporting obligations regarding relevant shareholdings and investment objectives for Italian-listed issuers will continue until 13 April 2021.

By Antonio Coletti, Guido Bartolomei, Marta Negro, and Isabella Porchia

On 13 January 2021, the Italian Securities Commission (CONSOB) adopted Resolution 21672 (the Resolution), further extending for three months the more stringent reporting requirements for relevant shareholdings and investment objectives in certain Italian-listed issuers with high current market value and/or spread ownership structure. The more stringent reporting requirements will now end on 13 April 2021. The Resolution extends the provisions of 9 April 2020, which were later extended until 13 January 2021

Court of Appeal sets out correct approach to transfer of long-term Insurance.

By Victoria Sander, Jon Holland, Alex Cox, and Duncan Graves

Latham & Watkins has won an appeal on behalf of Rothesay Life Plc (Rothesay) in an unprecedented challenge to the High Court’s refusal to sanction the transfer of around 370,000 annuity policies in August 2019 (comprising total policyholder liabilities of approximately £11.2 billion) from The Prudential Assurance Company Limited (PAC) to Rothesay.

The Court of Appeal overturned the High Court’s refusal to sanction the scheme in a judgment[1] handed down on 2 December 2020, and set out the correct approach for a court to adopt when dealing with applications to sanction transfers of insurance business under Part VII of the Financial Services and Markets Act 2000 (FSMA).  The case is the first time an application under Part VII FSMA has been considered in detail by the Court of Appeal.

The Court of Appeal held that the judge was “not justified in making an adverse comparison between the financial strength, record and expectations of PAC and Rothesay”; that his reasoning had been based on a misunderstanding of the applicable financial metrics; and that he did not give adequate weight to the views of the independent actuarial expert or the on-going regulatory role of the PRA.  The Court of Appeal also held that, although non-actuarial factors may be relevant to the assessment of some Part VII applications, the subjective choice of provider by policyholders is not a relevant factor to be considered.

The more stringent reporting obligations for certain Italian-listed issuers will continue until January 13, 2021.

By Antonio Coletti, Isabella Porchia, Guido Bartolomei, and Marta Negro

The Italian Securities Commission (CONSOB) has adopted Resolution 21525, extending for a period of three months — from October 13, 2020, to January 13, 2021 — the provisions of Resolutions 21326 and 21327 of April 9, 2020, as later extended by Resolution 21434 of July 8, 2020 (the Previous Resolutions). The provisions imposed stricter reporting obligations of relevant shareholdings in certain Italian-listed issuers that were selected taking into account their high current market value and/or spread ownership structure (see updated lists, available only in Italian, set out in CONSOB Decisions 39/2020 and 40/2020).

CONSOB reported that this further extension was motivated by the continuing uncertainty about the evolution of the economic and financial situation generated by the COVID-19 pandemic.

The Simplification Decree (Decreto Semplificazioni) follows and puts into effect the earlier attempt of the Italian cabinet to facilitate capital increases.

By Antonio Coletti, Isabella Porchia, and Marta Negro

Law no. 120/2020 converting Law Decree no. 76/2020 (Decreto Semplificazioni), which entered into force today (Law no. 120/2020), introduces certain measures (see Article 44) facilitating capital increases by Italian private and listed companies needing to raise equity financing and counter liquidity shortage due to the COVID-19 pandemic.