Dentons
20 Experts
11 Contributions by Dentons
PRACTICE NOTES
What is a borrowing base facility?
Borrowing base facilities (‘BB Facilities’) are a form of trade finance. They are working capital arrangements that provide short-term liquidity either through advances or by issuing trade instruments, such as letters of credit (see: Letters of credit—overview) or on demand guarantees (see: On demand guarantees/bonds—overview). These facilities are fully secured against current assets—commonly trading receivables, inventory (i.e. goods in storage or in transit), cash and contractual rights—of the borrower and/or other security providers. Consequently, the borrower’s available capital at any given time is directly linked to the value of the assets securing the lender(s).
BB Facilities are typically offered to trading companies on a revolving basis to fund the purchase, storage, transport and sale of prescribed commodities. They are often used to finance a pool of traded assets subject to high price volatility. Reflecting this, a standard
Banking & Finance
PRACTICE NOTES
This Practice Note considers the pension aspects that arise on transactions (including share sales) within the scope of the City Code on Takeovers and Mergers (the Takeover Code). For pension issues of more general application to share sales, see Pension issues in share sales—an introduction.
The Takeover Code
The Takeover Code is the commonly used name for the City Code on Takeovers and Mergers. It is issued by the Panel on Takeovers and Mergers (the Panel), the independent supervisory body for corporate transactions under Part 28 of the Companies Act 2006.
Purpose of the Takeover Code
The Takeover Code establishes an orderly framework for the conduct of takeovers. Its primary aim is to ensure that the shareholders of a target company are treated fairly and equally and are afforded the opportunity to decide on the merits of a takeover offer. The Takeover Code comprises
Pensions
PRACTICE NOTES
Author: James Todd, with thanks to David Cruickshank and Jamie Dunne.
Introduction
This Practice Note sets out the principal considerations connected to the project financing of gas peaking generation schemes (often called ‘gas peakers’). It concentrates on approaches to secure dependable income for these projects and to minimise liabilities while maximising cost transparency.
It does not, in the main, cover more standard contractual positions, although these remain relevant and should be evaluated by legal advisers where appropriate, such as:
seeking security from counterparties
assignment in security
drafting funder direct agreements
collateral warranties
For an overview of the key documents used in project financing, see Practice Note: Project finance—key finance documents. Although written with project finance specifically in mind, many of the issues highlighted will also be pertinent when undertaking due diligence on equity transactions. For further detail on the nature of ‘gas
Energy
PRACTICE NOTES
Author: James Todd, with appreciation to David Cruickshank and Jamie Dunne
Introduction and scope
The purpose of this Practice Note is to:
introduce the rise of ‘gas peaking’ projects that are becoming increasingly widespread across Great Britain’s (GB) electricity market, and
set out the principal subsidy/support arrangements that make such projects attractive for developers and, where appropriately structured, suitable for project financing
For more information on central project financing issues relating to gas peaking projects, see Practice Note: Gas peaking projects—key project issues relevant to project financing. This Practice Note considers gas peaking within the GB energy market and does not take account of the distinct position in Northern Ireland. For further practical guidance on the financing of energy, power and resources projects across a range of sectors, including those discussed in this Practice Note, see also textbook: Energy and Resources Financing: A Practical
Energy
PRACTICE NOTES
ARCHIVED:
This Practice Note is archived and no longer updated. The UK has enacted The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (VABEO). From 1 June 2022, VABEO superseded the Vertical Restraints Block Exemption Regulation 330/2010 (VBER 2010) in the UK. The European Commission has also brought in the Vertical Block Exemption Regulation 2022/720 (VBER 2022), which replaced VBER 2010 in the EU on the same date. Together with their 2022 guidance/guidelines, the UK’s VABEO and the EU’s VBER 2022 materially alter how most-favoured nation (MFN) clauses are approached. This Practice Note predates both instruments and reviews how MFNs were treated by the European Commission and national competition authorities before VABEO and VBER 2022. For analysis of MFNs in the EU under Article 101 TFEU, VBER 2022 and the Commission’s 2022 Guidelines on Vertical Restraints, refer to the relevant sections within:
Competition
PRACTICE NOTES
What is pre-export finance (PXF)?
Pre-export finance (PXF) is a long-standing arrangement that delivers funding to producers of goods and commodities. It is a form of structured trade finance (see Practice Note: Introductory guide to structured trade finance). These structures emerged because, historically, many producers of goods and commodities—particularly in emerging markets—were not regarded as sufficiently bankable to secure finance through orthodox channels, such as conventional corporate loans backed by the borrower’s balance sheet.
In a classic PXF facility, a lender or a syndicate of lenders advances funds to producers to assist them in meeting either working capital requirements (for example, to cover the purchase of raw materials and the costs associated with processing, storage and transport) or capital investment requirements (for example, investment in plant and machinery and other elements of infrastructure). For the purposes of this Practice Note, 'lender' refers to either a single
Banking & Finance
PRACTICE NOTES
What is prepayment finance?
Prepayment finance, a form of commodities finance, describes arrangements where buyers fund commodity producers by paying ahead of delivery. This well-established model channels funding directly to buyers or traders of goods and commodities, and indirectly to producers and exporters. Under this structure, a buyer—often called the offtaker—makes an advance to the producer or exporter, with that prepayment backed by a separate loan provided to the offtaker by a lender, typically a bank or a syndicate of banks.
Such structures are advantageous to:
producers, as they can obtain credit that would otherwise be unavailable through the conventional banking system; and
buyers, as the financing enables them to secure long-term supply agreements with producers in return for providing funds.
They are especially valuable where the producer operates in jurisdictions with exchange control regulations or tax regimes that prohibit or penalise direct lending to
Banking & Finance
PRACTICE NOTES
Relevant law
Strategic environmental assessment (SEA) is a structured process for evaluating the environmental implications of particular plans and programmes that are expected to exert significant environmental impacts.
Bodies that draft and/or approve any such plan or programme must:
analyse the probable significant environmental effects of implementing the plan or programme, consider reasonable alternatives, and compile a report setting out the conclusions of that analysis
engage with environmental bodies and the public through consultation
have regard to the report and the consultation outcomes during preparation and before the plan or programme is approved
publish information on the adopted plan or programme and explain how the environmental assessment was taken into consideration
SEA is regulated by the Environmental Assessment of Plans and Programmes Regulations 2004, SI 2004/1633 in England (the English SEA Regulations), and the Environmental Assessment of Plans and
Planning
PRACTICE NOTES
Reliable cash flow underpins the construction sector—without it, schemes would swiftly stall and delivery would suffer. Where both sides owe money to one another (for instance, an employer must pay the contractor for completed works, yet the contractor owes the employer for damage caused during those works), it is commercially sensible to use a device that results in a single net payment rather than two separate transfers between the parties involved. That device is ‘set-off’. This Practice Note outlines set-off (in general terms and within the construction sphere), describes how it operates day to day and provides practical pointers and issues to consider when handling set-off under construction contracts.
What is set-off?
From a commercial perspective, set-off is a tool parties use to regulate cash flow across their dealings. It permits opposing monetary claims to be netted off so that only one balance is payable
Construction
PRACTICE NOTES
THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL AND PERSONAL PENSION SCHEMES
Automatic statutory transfer of terms and conditions of employment
In private sector outsourcings, staff moving to a Supplier must continue on the same contractual terms after the handover as applied beforehand, in line with the Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246 (TUPE), save that a specific pensions exception applies in practice.
Which benefits fall within the pensions exception?...
Pensions
PRACTICE NOTES
This Practice Note summarises the principal characteristics of collective investment vehicles that target unlisted (including public‑to‑private) companies. It covers tax issues, fund structure and documentation, the fund life cycle, fee and carried interest arrangements, and the relevant UK regulatory framework.
What is a private equity fund?
A private equity fund (PE fund) is a pooled investment arrangement focused mainly on unquoted securities. Chances to invest in these assets, commonly shares in private limited companies, are seldom publicised and are usually sourced and negotiated privately. Accordingly, investors outside the private equity market struggle to obtain direct access. By combining their capital in a professionally managed PE fund, investors can participate in these opportunities.
Inward investment by a PE fund can appeal to investee businesses because PE funds:
provide growth capital to portfolio businesses;
support transactions that take securities from public markets into private
Financial Services
1 Contributions by Dentons Experts
PRACTICE NOTES
This Practice Note explores frequent challenges arising from insolvency within the construction sector. It examines the implications and usefulness of adjudication as a route to recovery where insolvency may be looming, and offers practical pointers on actions to take if a party becomes insolvent. The guidance is general in nature and will not suit every construction insolvency scenario, and it should be weighed carefully against the specific facts of each case. Accordingly, this Note should be read in context and not as a one-size-fits-all solution.
Introduction to the construction industry and construction procurement
Construction schemes typically involve numerous contributors performing distinct functions across procurement and delivery. A non-exhaustive set of participants includes:
employer—the person or organisation seeking delivery of the project and engaging professionals to perform the works. The employer may be from the public or private sector and is often referred to as ‘the
Restructuring & Insolvency
If you expected to see yourself on this page, click here.
