Leading international law firm Herbert Smith Freehills has advised Sumitomo Corporation (Sumitomo) on the financial restructuring of approximately US$2.3 billion of debt owed by Ambatovy Minerals Société Anonyme and Dynatec Madagascar Société Anonyme, companies of the Ambatovy Nickel Project (the Project), a large-tonnage nickel and cobalt mining enterprise located in Madagascar. Sumitomo is the lender to and majority shareholder of the Project.
On November 26, Mr. Justice Hildyard of the High Court of England & Wales sanctioned two restructuring plans (the Plans) in respect of the Project under Part 26A of the Companies Act 2006. The Plans provide for the restructuring of the debt, discharging and releasing approximately US$2 billion of debt held by various entities, including export credit agencies in Japan, Korea and Canada, multilateral lenders from Europe and Africa and an international syndicate of commercial banks in return for a cash settlement payment equal to 2.2 per cent. of the amount discharged. In addition, the Plans provide for the injection of US$140 million of new money by the shareholders on a super senior secured basis together with the amendment and extension of US$80 million of existing super senior debt, which was injected by the shareholders shortly before the Plans were launched. Under the Plans, the shareholders, including Sumitomo, retain 100 per cent of the equity in the Project.
The Plans were approved by three of the four classes of creditor, including the existing super senior lenders, with the dissenting class being “crammed down” using the Court’s cross-class cram down powers.
The Herbert Smith Freehills cross-practice and cross-border team included partner John Chetwood and associate Sophie Shaw in London, partner Rebecca Major and associate Hugh Cronin in Paris, and partner Alexander Currie and consultant Debbie Standring in the Middle East.
