ARTICLE
20 March 2025

The Channel Islands Structures Being Used For Infrastructure Assets

W
Walkers

Contributor

Walkers is a leading international law firm which advises on the laws of Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Ireland and Jersey. From our 10 offices, we provide legal, corporate and fiduciary services to global corporations, financial institutions, capital markets participants and investment fund managers.
We are continuing to see Guernsey and Jersey structures being established for investment into and acquisition of infrastructure assets such as windfarms, network utilities and renewable power.
European Union Corporate/Commercial Law

We are continuing to see Guernsey and Jersey structures being established for investment into and acquisition of infrastructure assets such as windfarms, network utilities and renewable power.

Why we are seeing this

One of the reasons for this ongoing trend is that both Guernsey and Jersey offer flexibility that other jurisdictions may not, including capital maintenance advantages, the ability to have corporate UK tax residence and tax neutrality on interest, dividends and distributions.

Jersey and Guernsey are also well-known sophisticated international financial centres, offering settled corporate and finance regimes with a wealth of service providers across the legal, corporate administration and listing industries.

The structure

A typical structure for an investment or acquisition "stack" usually includes the following Guernsey or Jersey entities:

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As you will see from above, the stack usually includes:

  • A Bidco which will usually be (i) funded on a leveraged basis, (ii) the borrower of senior debt to finance the acquisition and (iii) wholly owned by another Jersey/ Guernsey company, Midco;

  • A Midco which will usually be (i) funded on a subordinated mezzanine basis, (ii) the borrower of mezzanine debt and (iii) wholly owned by another Jersey/ Guernsey company, Topco; and

  • A Topco which will usually be (i) funded through equity subscribed for by the investor(s) and (ii) more widely held than Bidco and Midco.

This structure will be familiar to many in the UK, including tax advisors. There are, of course, variations here and there to suit transaction specific needs, often comprising a broader range of vehicles in the middle of the stack.

How we can help

In these transactions input and advice is required from specialist corporate, regulatory, tax and banking and finance professionals to ensure that the entities are properly incorporated, the stack is properly established in compliance with local regulations and that the funding arrangements are properly put in place.

Our Channel Islands Banking & Finance, Investment Funds & Corporate and Regulatory & Risk teams collaborate to work closely with the client, their lawyers and tax advisors in these transactions and we are well placed to assist and provide full coverage on these deals.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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