The Government’s plan to take the Student Loans Company debt off its balance sheet has moved up a gear as firms have formally been invited to tender for the role as legal advisor in the sale of the company’s £40bn loan portfolio.
Announced last Friday (26 July), the Department for Business, Innovation & Skills (BIS) has invited tenders for legal advice on the monetisation of the SLC’s loans portfolio, which at the end of the 2012/13 financial year was valued at approximately £45bn. The precise structure of the monetisation is still being considered but it is likely to be either through a sale to the private sector or a securitisation. Invited firms have until 23 August to submit their bids.
DLA Piper is currently joint advisor to the government-owned SLC, alongside Scottish firm Harper Macleod, after being reappointed as adviser for two years in February this year. Previously DLA was sole adviser to the SLC on a three-year contract after it replaced Harper Macleod in January 2010. At the time, DLA Piper’s bid was led by Edinburgh-based partners John McKinlay and Hazel Moffat. DLA Piper declined to comment on whether it would be bidding for the loan portfolio work.
The successful bidder will be expected to prove experience in complex, cross-government work and possess a strong cross-practice team with top-level abilities in general corporate M&A and securitisation.
The upsurge in privatisation to reduce public debt recently included the planned IPO of state-owned Royal Mail (for a reported value of £3bn), which will be the largest UK privatisation in decades when it takes place later this year. The lead roles for that sale were snared by Magic Circle firms Freshfields Bruckhaus Deringer, Linklaters, and Slaughter and May.
Freshfields’ corporate partner Tim Jones is leading the team advising BIS; while Slaughters corporate partner Jeff Triggs is lead partner for Royal Mail, while Linklaters’ co-head of equity John Lane and capital markets partner Tom O’Neill are acting for lead arrangers Goldman Sachs and UBS.