Osborne Clarke (“OC”) has advised existing client Yü Energy Retail Limited (“Yü Energy”), a subsidiary of Yü Group plc, on its new structured gas and power trading arrangement with Shell Energy Europe Limited (“SEEL”), which has an initial five-year term. Yü Energy is an independent supplier of gas and electricity, and installer of smart meters to the UK business sector.
The SEEL structured trading arrangement replaces Yü Energy’s previous facility with SmartestEnergy Limited ("SEL") and the transaction included a complex novation of the existing forward trades under the SEL facility. As such, the deal required a tripartite completion to allow the simultaneous termination of the SEL facility, trade transfer to SEEL and entry into of the new SEEL EFET-based trading and bespoke collateral arrangements. Under the new SEEL facility, SEEL provide structured gas and power market access without a significant cash collateral requirement, giving Yü Energy a working capital boost of £52m.
The multi-disciplinary Osborne Clarke team that advised Yü Energy was led by Energy Partner Hugo Lidbetter and Project Finance Partner Caroline Saul working closely with Project Finance Associate Lucy Gillespie, and they were assisted by Real Estate Senior Associate Sarah Wilkinson and Energy Associate Giles Herring.
Hugo Lidbetter commented: "We were delighted to support Yü Energy in this transaction with SEEL, which is the latest milestone in Yu's exciting growth trajectory. The step-change introduced by moving from a structured trading arrangement underpinned by cash collateral to one supported by a bespoke collateral package delivers a huge working capital boost to Yü Energy. The transaction was complex on several fronts. It required the coordinated transfer of the existing trade positions with SmartestEnergy and the release of the associated security package, the negotiation of a sophisticated EFET-based trading arrangement and the agreement on a bespoke security package to replace the traditional requirement for cash collateral.
"This meeting point of complex optimisation/trading and project finance expertise really speaks to Osborne Clarke's strength – and the team were fantastic in delivering dedicated deal support against a very tight transaction timescale."
Osborne Clarke has an established and well-respected position as one of the leading legal practices advising on energy projects and transactions. For over 20 years, it has helped clients to seize new opportunities and meet the challenges of making energy generation clean, affordable and secure. The combination of the international team’s experience and understanding of the energy sector means they are regularly called upon to support businesses on all aspects of their commercial, regulatory, corporate, finance and construction legal needs.
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