On April 7, 2015, Towergate Insurance Limited (“Towergate” or collectively with its subsidiaries the “Group”), the United Kingdom’s largest independently owned general insurance intermediary, announced the completion of its balance sheet restructuring.

Since the Group was formed in 1997, it had grown principally by acquisitions, having purchased over 300 businesses. In 2011, private equity company Advent International acquired a significant equity stake alongside the Group’s founder, Peter Cullum, investing over £200 million with a view to accelerating Towergate’s consolidation strategy. However, a number of commercial, operational and financial issues created an unsustainable situation for the company’s capital structure in 2014; Towergate needed to find a way to restructure negotiations with a disparate group of stakeholders (with competing objectives) while maintaining operational stability.

In November, 2014, Moelis & Company was appointed by a group of the Senior Secured Creditors (SSC) who held roughly 70% of the senior secured debt. Moelis & Company worked with the company and the SSC Ad Hoc Committee (group of 11 key institutions between Europe and the US) to design the Senior-Secured Only solution that formed the basis of the consensual restructuring deal agreed with the Senior Unsecured Creditors. Moelis & Company played a critical role in re-shaping the process in favour of the SSC Ad Hoc Committee, a central group that eventually had the maximum negotiating leverage and drove the transaction.

Moelis & Company achieved a par plus solution for SSC within two months of the Firm’s appointment when debt was trading at 80 pence to the pound. The restructuring significantly delevered the company, reducing total debt by approximately 60% through the effective equitisation of £360 million of debt claims and the provision of £300 million equity contribution. The SSC also fully underwrote new £75 million Super Senior Notes providing Towergate additional liquidity.

The transaction was effected through a ‘dual-track’ UK Scheme of Arrangement with both the SSCs and Senior Unsecured Notes overwhelmingly approving the transaction with 98% and 99% respectively voting in favour.