Could new legislative provisions offer better legal tools for restructuring businesses? Senthil Alagar explains some of the ways we can support you to maximise transaction outcome and mitigate risk.
Whether in the UK or elsewhere, high-profile restructurings involve a multitude of differing stakeholder interests, and there has never been a greater scrutiny over the robustness of considerations and conduct of directors, office holders, administrators, and security trustees in a restructuring.
Over the past 12 months, we’ve worked on some of the highest profile and complex restructuring transactions in the UK and continental Europe.
New tools for restructuring transactions
As businesses try to navigate a path through an uncertain outlook from COVID-19 and other economic challenges, new legislative provisions in the UK, Germany and the Netherlands are offering additional legal tools for stakeholders to restructure businesses.
In the UK, the new Corporate Insolvency and Governance Act 2020 introduced new provisions, including the so-called ‘super scheme’ or Restructuring Plan.
For companies facing the prospect of financial difficulty, this provides a useful flexible legal tool for achieving a compromise arrangement with financial (eg, lenders, bondholders, sureties) and non-financial creditors (eg, suppliers and landlords).
High-profile restructurings tend to involve a multitude of differing stakeholder interests. There has never been a greater scrutiny over the robustness of considerations, and conduct of directors, office holders, administrators, and security trustees in a restructuring.
Swissport is a global aviation services group, which saw its pre-coronavirus turnover of EUR 3 billion suddenly decline following the severe restrictions on air travel around the world. The group required a restructuring to achieve a more sustainable financing structure and enable it to undertake its turnaround business plan.
We provided an independent restructuring valuation and fairness opinion to the security agent to discharge their duties under the intercreditor agreement’s ‘distressed disposals’ provisions and implement a complex restructuring transaction.
The restructuring enabled the group to address its pre-transaction debt structure of EUR 2.1 billion and ensure new money facilities were available to fund its recovery and turnaround.
How we help our clients
We support boards of directors, chief risk officers (CROs), independent directors, financial advisers, security trustees, administrators and other stakeholders to discharge their fiduciary duties and mitigate risk.
We help them to choose the optimal solution and maximise transaction outcome by assisting them in a number of ways:
- Independent enterprise and equity valuations
- Fairness opinions and assessment of financing and restructuring transaction terms
- Independent assessment of M&A processes and outcomes in restructurings
- Scheme of arrangement comparators and Restructuring Plan ‘relevant alternative’ analysis
- Contingency planning and capital structure modelling
- Entity priority modelling
- Fairness opinions on enforcement of security
- Réviseur d’entreprises opinions under Luxembourg pledge documents
- Reports under article 524 of the Belgian Corporate Code
- Independent working capital reports and common information platform reviews