Corporate Finance Practice
The CFP provides corporate finance advice to BIS and other Government departments. CFP has a broad range of expertise covering corporate finance, corporate recovery and capital markets. Activities generally fall into three main categories: Launch Investment, Grant for Business Investment, and wider corporate finance advice (including advice on corporate intervention by Government).
Corporate finance/Intervention advice
Over the past few years the Shareholder Executive was engaged to evaluate and advise BIS on the financial aspects of significant targeted potential Government interventions aimed at mitigating the effects of the current downturn in key sectors of the UK economy. These initiatives have covered businesses in the automotive, aerospace and defence industries.
The Corporate Finance Practice is also responsible for a number of non-portfolio assets as well as a continuing role on Shareholder Executive’s traditional corporate finance and project work. The non-portfolio assets, many of which were included in the Treasury’s OEP asset programme, are characterised by the absence of a formal shareholder mandate. Shareholder Executive’s role is primarily to advise shareholding Departments on the best way to deliver value and efficiency. These assets currently include:
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Select assignments
Financial support for UK helicopter production, research and development (2011)
The Business Secretary has announced £32 million of public finance to support helicopter production, research and development in the UK. The investment includes a £22 million loan on market terms to AgustaWestland in order to assist production for the new AW169 light intermediate commercial helicopter at AW's Yeovil plant. The new aircraft is a diversification for the Yeovil site as it has previously focused on military aircraft. Separately, a total of £10 million in R&D grants have been delivered through the Technology Strategy Board Scheme. These grants are aimed at boosting research and development in advanced rotorcraft, benefiting small and medium sized enterprises in the supply chain and universities which train the next generation of engineers and technicians. The Shareholder Executive was involved in negotiating the structure of the support, including the terms of the loan.
Government Interventions in Automobile Sector (2009/10)
The Shareholder Executive corporate finance practice was heavily involved in the Government’s support for industry, and the automotive industry in particular. Shareholder Executive worked with GM and a number of European Governments to structure a support package for Opel / Vauxhall, leading the Government’s negotiations with the company. Whilst GM ultimately declined the European Governments’ support package, the UK Government’s relationship with GM has strengthened as a result, and the UK plants continue to perform a key role in the strategic direction of the group.
Banking (2009/10)
Before the creation of UK Financial Investments (UKFI), the Shareholder Executive led the advice provided to HMG with regard to the support to Northern Rock and Bradford & Bingley. During 2009, the Shareholder Executive led the separation of Northern Rock into two new legal entities - a new deposit taking and mortgage lending bank that takes over the old name, and the old entity (now known as Northern Rock Asset Management) which no longer takes customer savings and will run-off its portfolio of £60bn in mortgages over the next 20-30 years. Responsibilities for Northern Rock and Bradford & Bingley have now passed to UKFI.
