Slaughter and May advised hibu on its successful reorganisation of capital structure by way of schemes of arrangement.

Slaughter and May advised Hibu Group Limited and its subsidiaries (hibu) on its successful refinancing and reorganisation of hibu’s capital structure (the Refinancing). The Refinancing normalises hibu’s capital structure following its restructuring in 2014, reflecting its improved financial performance since 2014. The full terms of the Refinancing were proposed to hibu’s members and creditors on 26 July 2016.

The Refinancing was implemented by way of two parallel schemes of arrangement.  A creditors’ scheme of YH Limited, which effected the replacement of hibu’s existing indebtedness, and a members’ scheme of Hibu Group Limited, which normalised its corporate governance arrangements. The schemes of arrangement were sanctioned by the High Court of England and Wales on 6 September 2016 and the Refinancing became effective on 7 September 2016.  Hibu received unanimous consent to the schemes of arrangements from its members and creditors, with a turnout of 98%. The Refinancing was also supported by hibu’s pension trustee.

Pursuant to the schemes of arrangement, hibu’s existing indebtedness from the 2014 restructuring was exchanged in consideration of the issue of new shares and new floating rate and payment-in-kind (PIK) notes and its existing security and intercreditor arrangements were replaced.  Following the Refinancing, hibu’s total debt has been reduced by approximately £600m and the maturity of its PIK debt has been extended from 2024 to 2065. In addition, hibu’s cash pay debt has been de-stapled from the PIK notes and the shares of Hibu Group Limited (which remain stapled together).

The new notes are denominated in euro, sterling and US dollars and have been listed on the Cayman Islands Stock Exchange.

Wachtell, Lipton, Rosen & Katz advised on U.S. law and on proceedings to ensure recognition of the schemes in the U.S. and Walkers advised on Cayman law.