A multitude of local and international firms from around the Asia-Pacific have come together to advise on one of the largest leveraged buy-outs in the region in recent history.

Indonesia's largest coalmine, PT Adaro Indonesia, was subject to a US$1bn leveraged buy-out by a consortium of international investors, who provided mezzanine finance and equity backing to a group of prominent Indonesian businessmen (including Edwin Soeryadjaya) to finance the acquisition.

Lead arrangers DBS Bank Ltd, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation turned to Allen & Overy Shook Lin & Bok on the financing, with banking partner John Richards leading the magic circle firm's team alongside partners Kayal Sachi and Nicholas Crossin. The firm's offices in Amsterdam and New York were also involved.

Other advisers to the lead arrangers included KhattarWong & Partners (Singapore law), Freehills (Australian law), Erriah & Uteem Chambers (Mauritian law), Melli Darsa & Co Law Offices (Indonesian law), and Fenech & Fenech Advocates (Maltese law).

Milbank Hadley Tweed & McCloy LLP advised the consortium with Latham & Watkins LLP providing advice to the Indonesian investors.

The leveraged buy-out involved senior debt financing of up to US$600m and mezzanine debt financing and equity of US$400m. The consortium acquired PT Adaro Indonesia and related operating companies. The debt financing documentation was signed on 16 and 17 June, with the acquisitions closing on 22 June.

Counsel described the deal as challenging, complex and highly structured, with a number of legal issues being raised in the various jurisdictions. "[But] the ultimate structure of the debt financing was innovative and flexible enough to cope with these issues," said Richards.

The lead arrangers, the consortium and the various counsels will shortly start work on the next phase of the transaction.