Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Administration March 7, 2005
Permira Requests Payout Promises for WH Smith Pension Debt
July 15, 2004 (PLANSPONSOR.com) - UK Private equity
firm Permira is asking potential financiers of a renewed bid
for WH Smith to agree that that all debts to the company's
pension plan be paid off alongside their own claims if the
company became insolvent.
Reported by Eric Hazard
The move comes after trustees for WH Smith’s pension plan originally said they would attempt to block Permira’s bid for the firm and would demand full payment of the fund’s unfunded liability if the company’s new owners saddled it with additional debts. Currently, the UK retailer’s pension plan is underfunded by between £215 million and £250 million, according to a Dow Jones report.
The trustees then loosened their stance and said they would not make good on their blockade threat, under the condition that £150 million is added to the plan and the remaining shortfall ranks on the same level as that of senior creditors. The request breaks from traditional bankruptcy payout procedures. Under bankruptcy hierarchy, pension participants are typically among the last creditors to receive payment.
Permira has now been touting the latest proposals as the private equity fund attempts to raise loan capital in the firm’s attempt to privatize WH Smith.
« Texas Fund Fires Manager Accused of Stealing Client Assets