The restructuring plan (RP) is a powerful tool enabling financially-distressed corporates to undertake a comprehensive debt restructuring by entering into a compromise arrangement with creditors and shareholders. It was introduced in the UK in 2020 under Part 26A of the Companies Act 2006. Unlike other restructuring procedures, it can also – if approved by the court – enable companies to bind dissenting creditors using a ‘cross-class cram down’ provision.
What is a cross-class cram down?
The restructuring plan is modelled on the pre-existing scheme of arrangement, but with a cross-class cram down provision. This allows courts to sanction a plan, even if it has been rejected by one or more classes of the plan company’s creditors if:
- none of the members of the dissenting class would be any worse off than they would be in the relevant alternative
- the RP has been approved by at least 75% in value of at least one class of creditors or members that would receive a payment, or have a genuine economic interest in the plan company, in the relevant alternative.
Dissenting creditors that have been crammed down in previous RPs include financial creditors (secured and unsecured), trade creditors, landlords, and shareholders.
Crucially, any restructuring plan must be considered ‘fair and equitable’ by the court for it to be sanctioned.
RPs have been used to compromise the amount of debt, reschedule debt repayments, renegotiate covenants, undertake a debt for equity swap, inject new money, restructure lease arrangements or renegotiate tax liabilities.
It has proved to be a tool that's well-suited to help multi-jurisdiction or multi-site companies with complex capital structures. The RP has been successfully used by three African entities: Smile Telecoms, Ambatovy/Dynatec JV, and Madagascar Oil. These cases illustrate the wide-ranging nature of what an RP can achieve.
Establishing a 'sufficient connection' to utilise the RP
Non-UK companies can utilise the RP if they're able to demonstrate a ‘sufficient connection’ to the UK. This can be established if a significant portion of a company’s debt is governed by English law. It is also possible to create the sufficient connection by shifting the ‘centre of main interest’ (COMI) of the company and while this is a more complex route (because of the planning, time and steps required) it has been successfully used in cases such as Smile and Madagascar Oil.
Smile Telecoms Holdings Ltd
Smile Telecoms is a major African internet and telecoms business. The firm was facing operational challenges and funding constraints, and required a substantial new cash injection which the existing senior lenders were unable to provide.
The firm proposed an RP, the first for any non-European company, which allowed for the provision of approximately £63 million of super-senior new money. The court sanctioned the plan despite not all senior lenders providing their consent, by utilising the cross-class cram down provision and demonstrating that none of the members of the dissenting senior lender class would be any worse off if the RP wasn't implemented.
Smile Telecoms went on to implement a second RP in March 2022 after it was unable to complete an anticipated sales process. This second RP established for the first time that an English court has jurisdiction to sanction a plan compromising shareholders in a foreign jurisdiction. It was also the first time out-of-the-money stakeholders were excluded from voting on the plan.
Ambatovy Minerals S.A. and Dynatec Madagascar S.A.
The plan companies form a joint venture (JV) in East Madagascar operating a nickel and cobalt mine, as well as a port and processing facility. In 2024, the business faced financial difficulties due to international competition, lower commodity pricing and operational difficulties. An RP was proposed to facilitate the restructuring of existing debt and allow for the introduction of new money.
The multi-tranche lender group comprised lenders from Europe and Africa, an international syndicate of nine commercial banks and export credit agencies from Japan, Korea, and Canada. The RP discharged approximately USD 2 billion of debt in return for upfront cash settlement payments and a deferred payment arrangement. The sponsors were able to retain 100% of the equity in the JV, and around 10,000 jobs were preserved.
The RP was approved by three of the four classes of creditor, with the dissenting class being crammed down. This was the first time an RP has been used for a project financing and it's generally considered to be one of the most ambitious RPs in the market to date.
Madagascar Oil Ltd
Madagascar Oil Ltd is an oilfield developer incorporated in Mauritius. The RP sought to restructure the debt of the plan company and its subsidiary to enable the injection of capital to restart production at a large but difficult to exploit oilfield in Madagascar.
The RP allowed for a new money cash injection from the parent company, compromising and restructuring significant debt of around USD 700 million to allow the group to implement its business plan. This was the first RP to involve just two pari passu creditors with opposing interests, with one creditor ‘cramming across’ the other.
Recent developments in the market
The RP has evolved significantly since its introduction in 2020. Each RP has pushed the boundaries of what will or won't be acceptable to the court, and there have also been a growing number of contested RPs.
In July 2025 the Court of Appeal overturned the sanction of twin RPs for Petrofac, an energy services company. This judgment clarified the dynamics of the market, setting some key guidelines for future RPs:
- The value generated by any restructuring must be fairly allocated between plan creditors – including the price paid for any new money
- Valuation evidence is crucial – the current value of the company or group must be considered, as well as the value post-restructuring
- There's an onus on the plan company to provide the relevant evidence to court
- There needs to be greater focus on creditor negotiations taking place before an RP goes before the court. Courts will want to see evidence that such engagement has taken place.
Why are RPs useful for African corporates?
There will be cases where other traditional restructuring tools are more effective. But the RP remains a useful and relevant tool which can be considered by African entities.
- The cross-class cram down provision allows courts to sanction a plan, even if it has been rejected by one or more classes of the plan company’s creditors, subject to certain provisions.
- An RP can deal with all creditors and shareholders in one process unlike, for example, a CVA.
- An RP isn't an insolvency procedure but a tool to effect restructurings in a distressed context. This enables the corporate shell to remain intact which can help preserve value. Also, change of control clauses may not be triggered, which enables the continuity of contracts or regulatory permissions. This isn’t the case in a pre-pack administration.
- RPs have been popular for international groups, and while those groups might be able to use a pre-pack, a share pledge enforcement or other overseas restructuring tools, RPs remain an attractive option.
- By using an RP and implementing a restructuring at a group level under English law, firms can ensure continuity of operations and assets with minimal disruption.
We're leading advisors in restructuring plans, having worked on 64% of all RPs in the market in the first three quarters of 2025, and advising on the RPs for all the case studies discussed here. Our Africa Business Group can leverage its connections across Grant Thornton International's global network, which has a presence in 21 countries across the continent.
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