Slaughters, Travers and Hogan Lovells advise as Tata Steel restructures UK pension scheme

Slaughter and May, Travers Smith and Hogan Lovells have advised on the UK’s largest ever pension scheme restructuring, which sees Tata Steel offload the £15bn British Steel Pension Scheme (BSPS).

The Indian steelmaker signed an agreement today (11 August) to detach the BSPS from Tata Steel UK.

The separation was achieved through an unusual legal mechanism called a regulated apportionment arrangement, which allows a financially troubled employer to rid itself of defined benefit scheme liabilities.

As part of the deal, Tata Steel will pay £550m to BSPS, which in turn will be given a 33% equity stake in the steel company.

The Pensions Regulator (TPR) confirmed it had agreed to the Tata Steel proposal to restructure the BSPS, to avoid the company becoming insolvent. The BSPS and the Pension Protection Fund (PPF) also supported the move.

Slaughters advised Tata Steel on the restructuring with a team led by pensions and employment partners Charles Cameron and Phil Linnard, head of the firm’s financing practice Andrew McClean, M&A partner Padraig Cronin and head of restructuring and insolvency Ian Johnson.

Travers acted for the trustee of the BSPC and fielded a team led by pensions partners Paul Stannard, Dan Naylor and Susie Daykin; finance partners Jeremy Walsh, Ed Smith, Adrian West and Jonathan Gilmour; tax partner Richard Stratton; and head of financial services and markets Tim Lewis.

Hogan Lovells acted for the PPF with a team led by pensions partner Claire Southern. She was supported by insolvency partner Lawrence Crowley and corporate transactional partner Nicola Evans

In 2016, Clyde & Co, Slaughter and May, Travers Smith and Ashurst landed roles as metals group Liberty House bid for Tata Steel’s UK assets, including the company’s plant at Port Talbot.

The deal completed in May this year.