With COVID-19 restrictions easing and the impending removal of UK Government support measures, we consider the impact of the pandemic on the role of UK company directors’ and practical steps that can be taken when navigating the road map out of lockdown.

Chris Davis

Practical considerations for UK Directors’ when navigating the road map out of lockdown

THM advises SGS, one of the largest property sub-groups of intu and owner of Lakeside, Watford Atria, Victoria Centre and Braehead shoppingcentres, on its £1.3bn long term financial restructuring, supported by a new money facility of £87m

SGS Finco Limited and its subsidiaries (SGS) comprise one of the largest property sub-groups of intu Properties PLC (intu). SGS owns four of the UK’s leading regional shopping centres and leisure destinations, Lakeside, Atria Watford, Victoria Centre (Nottingham) and Braehead (Glasgow).

Andrea Trozzi of THM Partners was appointed Chief Restructuring Officer and Independent Executive Director to the SGS boards, prior to intu's administration. Neil Robson of THM Partners also joined the SGS boards as a Non-Executive Director. Andrea was supported by Mark Sweeting, Lauren Armstrong and Seppi Grant.

THM, working closely with SGS's asset and property managers, ensured the immediate stabilisation of the four shopping centres following intu's administration and through several COVID-19 lockdowns, successfully migrating the four shopping centres from intu's management to a standalone operational platform in November 2020.

As part of ensuring its stability, SGS secured a short term £30m financing facility along with the necessary waivers and extensions to provide time to migrate the assets and build SGS's operational, governance and reporting capabilities before a long term financial restructuring could be agreed with its stakeholders.

The consensual long term financial restructuring successfully concluded on 16 July 2021 and received overwhelming support from its lenders, with all Noteholders that voted (representing 88% of the three series of notes) and 100% of Term Loan Lenders voting in favour. The key objectives of the financial restructuring are to align stakeholder interests and establish an independent platform with a stable capital structure from which SGS can deliver its three year business plan and exit strategy to maximise value for stakeholders. This includes the extension of Series 1 Note and Term Loan maturities to 2024, "Pay if you can" interest across all debt and the provision of a new £87m super senior money facility.

"This project has demonstrated THM's ability to take directorships and bring leadership, independence, stability and robust governance to a board during unprecedented times. The completion of the long term financial restructuring is a major milestone for SGS, its stakeholders and retailers which have been impacted by the pandemic. It will provide a stable platform to deliver SGS's business plan and exit strategy to maximise value for SGS's stakeholders."

- Andrea Trozzi, THM Partner, Head of Real Estate and Independent Executive Director of SGS

Since June 2020, THM has worked closely with Linklaters, Osborne Clark and PwC as advisers to SGS, Global Mutual as Asset Manager, Savills as Property Manager, Moelis and Clifford Chance as advisers to the Ad-Hoc Committee of Noteholders and Grant Thornton and Freshfields Bruckhaus Deringer as advisers to the Term Lenders.

THM advises SGS, one of the largest property sub-groups of intu, on its £1.3bn long term financial restructuring

THM is pleased to announce the sale of the Silk/Horizon portfolio of hotels to Marathon

The portfolio comprises 17 InterContinental Hotel Grouped branded hotels (15 Holiday Inn and two Crowne Plaza), located across the United Kingdom in key regional markets, with 2,374 rooms.

THM was introduced to the Group in June 2020 to assist the board and financial stakeholders with navigating the financial challenges directly arising from the Covid pandemic. 

Led by Chris Elkins and supported by Ian Ireland, THM has provided hands-on assistance and advice to the Group throughout the past 12 months, culminating in the sale of the portfolio.

THM’s role included short term cash flow forecasting the liquidity management, development of the Group’s business plan, securing additional finance facilities with the Group’s lenders and supporting the Group throughout the process. Chris was also appointed as Director to each of the boards of the Group’s entities, together with Neil Robson in a non-executive, advisory role.

The completion of the sale is a positive outcome for the Group’s stakeholders and the employees working across the portfolio.

Throughout the engagement, THM worked closely with other advisers including Linklaters, led by Tom Quoroll, Cerberus and the legal advisers to the Group’s lenders Herbert Smith Freehills (John Chetwood and Matthias Steiner) and Clifford Chance (David Towers and Tim Lees).

On the sale to Marathon, the Group was also advised by Eastdil Secured (Giorgio Manenti, Clara Jacquier and Soraya Wörag), BCLP (Laura Wild, Patrick Johnson and Daniel Bell) and PwC (Emily Mason and Peter Cardwell).


THM announces sale of Silk/Horizon portfolio to Marathon

Silk/Horizon Portfolio Sale to Marathon

During the global COVID-19 pandemic, UK Government support has been crucial, even for some of the largest businesses in the UK that had been trading well until the pandemic hit.

The overall quantum of support is unprecedented, with the total cost of COVID-related business, employment and other support measures expected to surpass £300bn.

Of this total, £85.6bn remains outstanding in the form of Government-guaranteed loans and a further £33.5bn of VAT was deferred in Q2 2020. The question remains as to how and to what extent businesses will be able to meet the associated repayment requirements.

To further complicate matters, UK Parliament enacted two pieces of legislation that significantly change the landscape for businesses facing financial difficulties:

The 2020 Finance Act, effective 1 December 2020, that re-introduced Crown preference – elevating the seniority of debts owed to HMRC above floating charge holders; and

The 2020 Corporate Insolvency and Governance Act (CIGA), effective 26 June 2020

There is no doubt that without the scale of the support provided to UK businesses to date, the number of failures would have been catastrophic for the economy. Yet at the same time, the commercial reality of the repayable measures and the new legislation are not fully understood.

This article explores the likely implications and potential uncertainties arising from these events for businesses, with specific focus on audit sign-off, lender and Government behaviour and directors’ duties.

Reality Check: As the Chancellor turns off the taps, there are uncertain times ahead

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UK Directors’ Duties

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