Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494420
Intralot – Implications and Responses 22 • May allow nearly uncapped disposals on the basis that disposition is made "in connection with" a JV, which is a Permitted Investment – carveout doesn't make clear that the entire JV has to be a Permitted Investment rather than just the post-disposition remainder; • Investors expect entire FMV of a JV contribution to count against available capacity; this carveout undermines RP covenant and increases value leakage potential. What are the implications of using the loophole? How can the loophole be addressed? • Require that any cash and Cash Equivalents be applied in accordance with the Asset Sale covenant; • Stronger language would require that cash and Cash Equivalents are actually received; • Stronger language would capture "in-kind" exchanges broader than just cash and Cash Equivalents. Liability Management and Refinancing Solutions in Europe