We have experience of leveraged transactions including negotiation of mitigation packages. In a recent deal, Private Equity wanted to invest in the sponsoring employer via a combination of equity and significant increased debt. We negotiated a mitigation package which included cash held in escrow to the benefit of the scheme; a floating charge which reduces in value as the funding level of the pension scheme improves and fixed charges over real estate assets. We are not phased by the complexity of Private Equity transactions and are willing to be innovative in our approach. We recognize that it is likely to be in the best interests of the members to have a strong long term employer covenant. This may require a change of ownership to a new party willing to invest in the business and the pension scheme should not necessarily be a barrier to such deals.
