Ambatovy Restructuring Plan Sanctioned

The plans involve, among other things: (i) the substantial injection of new money (US$140m) by the companies’ shareholders; (ii) the discharge of c.US$1.65bn of secured debt; and (iii) the subordination of a further c.$565m of secured debt. The plans are intended to save the companies from liquidation and protect the interests of thousands of workers in Madagascar.

Mr Justice Hildyard found that the court had jurisdiction to sanction the plans and held that, in the circumstances of the case, it was appropriate to cram down a junior class of secured creditor, the members of which were owed c.US$814m, were significantly “out of the money” in the relevant alternative and whose debt was to be discharged in return for payment of US$406,429.07. Written reasons for the decision are to follow.

Henry Phillips, instructed by Milbank LLP, acted for a supporting group of creditors.