RBS 2011 Annual Report Download - page 452

450 RBS Group 2011
Material contracts continued
RBS Sempra Commodities JV sales
On 16 February 2010, the Group announced that RBS Sempra
Commodities JV, a joint venture owned by the Royal Bank and Sempra
Energy, had agreed to sell to J.P. Morgan Ventures Energy Corporation
(JPMorgan) its metals, oils and European energy business lines. The
Group announced completion of the transaction on 2 July 2010, for a total
cash consideration of US$1.6 billion, post interim distributions of which
the company's share is approximately 47 per cent.
On 20 September 2010, the Group announced that RBS Sempra
Commodities JV had agreed to sell its Sempra Energy Solutions
business line to Noble Americas Gas & Power Corp. for consideration of
approximately US$317 million in cash, plus the assumption of
approximately US$265 million in debt. The Group’s share of the
consideration is approximately 51 per cent, or US$162 million. The
transaction closed on 1 November 2010.
On 7 October 2010, the Group announced that RBS Sempra
Commodities JV had agreed to sell substantial assets of its commodities
trading North American Power and Gas business lines to JPMorgan. The
transaction closed on 1 December 2010 and JPMorgan acquired these
net assets for consideration of US$220 million in cash based on the 30
June 2010 balance sheet, of which the Group’s share is approximately 51
per cent, i.e. US$112 million. The value of the gross assets acquired by
JPMorgan was US$6 billion (unaudited) as of 30 June 2010.
Sale of Global Merchant Services business
On 6 August 2010, the Royal Bank, Citizens Financial Group, Inc., RBS
Netherlands Holdings B.V., Ulster Bank Limited, Ulster Bank Ireland
Limited, NatWest Plc and Ship Bidco Limited (a company representing
Advent International (‘Advent’) and Bain Capital (‘Bain’) which has now
changed its name to WorldPay (UK) Limited) entered into a Transfer
Agreement pursuant to which the Royal Bank (either directly or through
its group companies) sold 80.01 per cent of its Global Merchant Services
business for an enterprise value of up to £2.025 billion. Approximately
£1.45 billion (subject to customary post-closing adjustments) was
received in cash on closing of the sale of the 80.01 per cent interest. Up
to £200 million is receivable in the future if the returns realised by Advent
and Bain exceed certain thresholds. The sale completed on 30 November
2010.
The Royal Bank, in its capacity as holder of a retained interest in the
Global Merchant Services business, also entered into an Investment
Agreement on 6 August 2010 (subsequently amended and restated on 29
November 2010) with Ship Bidco Limited (now WorldPay (UK) Limited),
certain other acquisition vehicles, specified management and funds
operated by Advent International and Bain Capital relating to the
operations of the joint venture company which is the uppermost of the
intermediate acquisition vehicles and the ultimate parent company of
WorldPay (UK) Limited. The interests of the Royal Bank are insufficient to
block major decisions of this joint venture company at the shareholder or
board level.
Sale of RBS Aviation Capital to Sumitomo Mitsui Banking Corporation
On 16 January 2012, the Royal Bank and Sumitomo Mitsui Banking
Corporation (SMBC) entered into a Sale and Purchase Agreement
pursuant to which the Royal Bank agreed to sell its aircraft leasing
business, RBS Aviation Capital, to SMBC, acting on behalf of a
consortium comprising its parent, Sumitomo Mitsui Financial Group, and
Sumitomo Corporation. As a result of the sale, the consortium will acquire
RBS Aviation Capital for an approximate consideration of US$7.3 billion
(£4.7 billion). The consideration will be paid in cash and will be subject to
certain closing adjustments. The transaction is subject to regulatory and
anti-trust conditions and it is expected that the sale will complete before
the end of the third quarter of 2012.
Additional information continued