Restructuring and Insolvency

We advised Valaris on the restructuring of its (approximately) $7.1 billion of debt facilities, which was implemented through prearranged Chapter 11 cases and a parallel pre-pack administration. Valaris is an industry leading offshore drilling service provider and operates one of the largest global fleets in the sector. Given the quantum of debt, the variety of stakeholders and the group’s size and complex nature, the ability to achieve a highly consensual restructuring in these circumstances was praised by the US Bankruptcy Court.

We advised Seadrill Limited, one of the world’s largest oil contractors, on its comprehensive restructuring plan, which was implemented via chapter 11 and encompassed its £12.8 billion of existing bank and bond debt, and new investment comprising a $200 million direct equity investment and an $880 million high yield bond.

The restructuring was described by the anchor shareholder as the most complicated transaction in more than half a century in shipping, and involved multiple jurisdictions.

More recently, we advised Seadrill Limited on its second chapter 11 restructuring which has resulted in further deleveraging by reducing liabilities by $4.9 billion and raising an additional $350 million of new money.  We also advised on the separate bondholder cross-border restructuring of Seadrill New Finance Limited and SeaMex Ltd. which has involved the use of provisional liquidation in Bermuda and a pre-packaged chapter 11 case.

We advised Premier Oil on the restructuring of its debt and its all share merger with Chrysaor. Creditor approvals for the transaction were obtained through Court approved restructuring plans under Part 26A of the Companies Act 2006. These were some of the earliest restructuring plans following the introduction of Part 26A and the first in Scotland.

Prior to completion, Slaughter and May had advised Premier for almost two years in its efforts to develop and implement a long-term refinancing solution to address the maturity date of its existing debt facilities on 31 May 2021. As a result of the transaction with Chrysaor, Premier’s total gross debt of approximately US$2.7 billion and certain hedging liabilities were repaid and cancelled in return for a cash payment of approximately US$1.3 billion, shares in the enlarged group and the option to participate in a partial cash alternative.

We advised the Virgin Group on the successful restructuring of Virgin Active which implemented a holistic restructuring of the financial and operational liabilities of its Europe and APAC group, involving the injection of additional debt and equity funding by its shareholders (Virgin Group and Brait), the extension of its debt facilities, the restructuring of its UK leasehold estate and concessions from Virgin Group as licensor of the Virgin brand.

The transaction was implemented by way of restructuring plans under Part 26A of the Companies Act 2006. The restructuring plans were sanctioned – despite active opposition from an ad hoc group of landlords at both the convening and sanction hearings – by Snowden J on 12 May 2021. The judgment in this case was an important landmark in the development of the restructuring plan and, in particular, its usefulness as a tool to address operational liabilities.

We advised the Dutch retailer HEMA B.V. on its debt restructuring which involved a partial debt for equity swap with respect to HEMA’s €600 million floating rate senior secured notes due 2022. As a consequence, the ownership of the HEMA group was transferred to a newly incorporated company owned by the holders of those senior secured notes.

The restructuring was implemented, in part, by an English scheme of arrangement with respect to the senior secured notes, combined with a Dutch law security enforcement process.

We advised Credit Suisse (in its capacity as secured lender) on the negotiation and implementation of Danaos Corporation’s refinancing and restructuring plan. Danaos is one of the world’s largest independent owners of container ships and charters its vessels to many of the world’s biggest liner companies.

The restructuring involved $2.2 billion of debt and complex negotiations with multiple stakeholders.

We advised Interserve plc, one of the world’s leading support services and construction groups, on the development and implementation of a deleveraging plan designed to reduce the group’s debt by approximately £485 million and provide £110 million of fresh liquidity.

Following rejection of the plan by shareholders at a general meeting, the group implemented the restructuring by means of a pre-packaged administration sale. Careful contingency planning enabled this ‘plan b’ to be executed on the same day as the general meeting to preserve value and avoid business disruption.

The transaction only became possible through a renegotiation of intercreditor arrangements with multiple lenders, bonding providers and the pension trustee, where our market leading pensions team also played a crucial role.

More recently, we have acted on the significant disposals of Interserve’s operating businesses to Mitie and the Altrad Group as part of ongoing restructuring and turnaround efforts.

We advised Carillion plc on its high profile restructuring negotiations and its ultimate entry into compulsory liquidation, and subsequently the Official Receiver as liquidator and PwC as Special Mangers on aspects of the liquidation. The liquidation has given rise to a number of complex questions, and has been carried out under a huge weight of public scrutiny, often under considerable time pressure.

The firm has extensive experience advising on landlord CVAs in the retail and leisure sector. We have acted both for companies proposing CVAs (including The Restaurant Group plc, Revolution Bars Group plc and Mothercare plc), and for landlord groups negotiating the terms of CVAs (most notably in respect of Arcadia, where we advised a steering group of landlords which coordinated the landlord response to the restructuring proposal).