Hogan Lovells Advises UK Coal Pensioners on Innovative Restructuring
10 December 2012
LONDON, 10 December 2012 - Hogan Lovells has advised the Trustees of the Industry-Wide Coal Staff Superannuation Scheme and Industry Wide Mineworkers' Pension Scheme on an innovative restructuring and pension fund debt-for-equity swap completed today, 10 December 2012.
UK Coal operates three deep mines in the Midlands and Yorkshire and employs around 2,500 people. It is also one of the UK's most significant landowners.
Hogan Lovells advised the Trustees of both Schemes on an innovative restructuring of UK Coal's business into two separate divisions – a coal mining division and a property division, Harworth Estates. The Trustees of both Schemes will invest £30m, in total, into the property side of the business and in return the Trustees of the two Schemes will jointly become 75.1% shareholders of the property business.
This unusual and ground breaking restructuring should protect the pension benefits of the more than 6800 members of the two pension schemes as the mining division will remain a sponsoring employer to the schemes, and will continue to make pension contributions with the aim of preserving members' benefits and fully funding the schemes.
The cross-practice Hogan Lovells team advising the Trustees was led by London pensions partner Katie Banks, supported by senior associate Faye Jarvis. London corporate partner Tom Brassington led the corporate team advising on the restructuring. Real estate partner John Condliffe and environment partner Christopher Norton advised on the purchase of the significant property portfolio.
Commenting on the solution Katie Banks, partner in Hogan Lovells' London pensions team, said:
"We are thrilled to have been able to advise on this innovative solution which effectively reduces the scheme deficit and saves the pension schemes from the Pension Protection Fund, benefitting all parties concerned."