Global law firm Ashurst acted as Hong Kong, New York and Singapore legal counsel in respect of the successful debt restructuring of Hong Kong listed and Cayman Islands incorporated MIE Holdings Corporation.
This transaction is one of the major restructurings completed in the Hong Kong market this year.
The restructuring was implemented by way of a scheme of arrangement in relation to MIE’s SGX listed and NY law governed notes, along with a fully consensual and inter-conditional restructuring of four separate Hong Kong law governed secured loan facilities.
On 28 May 2021, Margot MacInnis of Grant Thornton Specialist Services (Cayman) Limited together with Mat Ng and Georgia Chow of Grant Thornton Recovery & Reorganisation Limited (Hong Kong) were appointed as joint provisional liquidators of MIE on a “light touch” basis for the purposes of developing and implementing a restructuring of MIE’s financial indebtedness (the “JPLs”).
A recognition and assistance order in relation to the JPLs was sought in Hong Kong, however the application was adjourned on the basis that the Hong Kong court considered that the soft-touch nature of the JPLs’ appointment, which does not displace the board whilst the Restructuring is being negotiated and agreed, is akin to a debtor-in-possession restructuring regime which may be contrary to the creditor-centric manner in which the Hong Kong financial system operates.
Following the appointment of the JPLs, and further negotiations between the parties, the Noteholders and the Lenders were subsequently invited to enter into an umbrella Restructuring Support Agreement dated 28 October 2021 to support the Restructuring. The Lenders were required to place all signature pages to the Loan Restructuring Documents into escrow, pending satisfaction of the restructuring conditions, including the effectiveness of the Cayman Scheme in relation to the Notes.
The Cayman Scheme was approved by an overwhelming majority of Scheme Creditors at a scheme meeting held on 17 March 2022 which was sanctioned by an Order of the Grand Court of the Cayman Islands on 25 March 2022.
The restructuring of both the Loans and the Notes was effected simultaneously on 30 March 2022 (with the New Notes being listed on the SGX on 31 March 2022). A Chapter 15 recognition order in relation to the Cayman Scheme has been sought.
The Ashurst team was responsible for drafting the complex intercreditor documentation as well as the new Facility Agreements, the New Notes Indenture and each of the other Finance Documents.
Lead partner Sophie Lyall commented, “We are delighted to have advised the Company on one of the few successful cross border resolutions of a distressed situation in Greater China this year. The restructuring has significantly improved the financial position of the Company and its subsidiaries. The Company team has worked non-stop in seeking to find a resolution acceptable to the parties and we are thrilled to have this opportunity to continue to support them in their efforts.”
The transaction was led by Hong Kong restructuring partner Sophie Lyall and global head of high yield debt Anna-Marie Slot with the assistance of Rob Child.
Partner James Comber led the Hong Kong litigation team to represent the Company before the Hong Kong courts and Frank Bi, corporate partner, advised on the Hong Kong corporate aspects of the transaction.
The Ashurst team also worked with Walkers, Stroock, Stroock & Lavan LLP and Paul Hastings LLP in respect of recognition of the Cayman Scheme under the Chapter 15 in the US.