Provident Financial demerger and flotation

Provident Financial is a London-listed company and the largest provider of home-collected small sum credit in the United Kingdom. We have advised the company for over 25 years on a broad range of matters.

Since 1997 Provident Financial has built up an international division with operations in Poland, the Czech Republic, Slovakia, Hungary, Mexico and Romania. During 2006 and 2007, Provident Financial worked on a proposal to demerge this international division. The demerger was led by the client partner Andy Ryde who over many years had developed a close relationship with the company and its senior management. 

Andy put together a team from across the firm to advise on all legal aspects of the transaction including financial regulation, tax, financing and employment. The initial focus of the work was on devising a structure which met the various corporate, accounting and tax objectives – a three-cornered dividend route was adopted. Next came an intensive phase of activity, in order to prepare the international division for life as a standalone listed group, involving diligence and corporate governance. In parallel, the team worked with the client on the separation of the international division (which employed 5,000 people) from the remaining UK operations, which gave rise to complex issues crossing many specialist areas. Next came the preparation of the public documents, in particular the Provident Financial circular to shareholders and the prospectus required in connection with the listing of the new group. We also advised on new financing facilities, both for the existing group and for the newly separated international division.

In conjunction with its advice on the demerger, we also coordinated the involvement of lawyers from the various jurisdictions in which the international division operated.

The transaction was successfully completed in mid-2007 and International Personal Finance plc, a new company holding the international business, was listed on the London Stock Exchange and added to the FTSE 250 index on 16 July 2007.