20 March 2005 – LAWFUEL – The Law News Network – Herbert Smith has advised its longstanding client BAA, the world’s leading airport company, on the completion of a 50:50 property joint venture with Morley Fund Management (Morley).
BAA injected c. £800 million of commercial property assets into the joint venture, the Airport Property Partnership (APP). When the deal completed on 11 March, BAA received gross cash proceeds of £571 million which will be used to develop its airport interests in the UK and overseas.
The gross cash proceeds represent £221 million from the sale of equity and £350 million from the raising of indebtedness in (and with recourse limited to) the joint venture. The £350 million debt funding was raised under a £480 million term and revolving facility provided by a club of four banks – Barclays, HSBC, Lloyds TSB and RBS.
The facility is secured over the property portfolio and is entered into on a non-syndication, non-securitisation basis. The balance under the facility may be utilised by APP for further investment or development property acquisitions or as working capital.
BAA Lynton Management Limited, a wholly-owned subsidiary of BAA, will provide asset management and development services to APP. Morley Fund Management Limited, a wholly-owned subsidiary of Aviva, will be the fund manager.
Herbert Smith corporate partner Gareth Roberts led the Herbert Smith team advising on this transaction together with partners Alex Kay, Julian Pollock (real estate), Peter Long (finance) and Isaac Zailer (tax).
BAA’s sole financial adviser was Rothschild. Berwin Leighton Paisner advised Morley. Allen & Overy advised the club of banks.