Who'll come to the (corporate) rescue?
Clayton Utz will. When a business is distressed or undergoing a restructure, we'll be there, working to preserve its value for employees, creditors and shareholders.
High-profile restructuring of Nexus Energy
In possibly the most prominent restructuring and insolvency matter of 2014, we acted for McGrathNicol, the administrators and then deed administrators of Nexus Energy Limited. With debts of approximately $400 million, McGrathNicol were appointed to the ASX listed Nexus when a takeover bid by an entity connected to Seven Group Holdings (Seven) (also an ASX listed company and a senior secured creditor of Nexus) was dramatically rejected by shareholders.
We negotiated crucial funding of $150 million so the administrators could satisfy urgent obligations; the funding also enabled Nexus' solvent subsidiaries to continue to operate. We also implemented a proposed recapitalisation and privatisation of Nexus through a Deed of Company Arrangement (DOCA) which involved the transfer of Nexus shares to a Seven entity.
Under the DOCA, it was proposed that in return for the Share Transfer, the Seven entity provide the funds to pay Nexus' creditors. After an expedited proceeding contested heavily by a small but vocal group of shareholders, orders were successfully obtained, signalling the Share Transfer for nil consideration, the termination of shareholders' rights and Nexus' return to operating as a going concern. The defendant shareholders did not appeal the decision.
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Complex restructure of retail group
In what was described as one of the most complex restructures ever undertaken in Australia, we advised Centro Retail Group (CER) on key components of its restructure. These included the sale of CER’s US shopping centre portfolio; the aggregation of the assets of CER, Centro Australia Wholesale Fund and Centro DPF Holding Trust following the US asset sale to create a new ASX-listed quadruple stapled entity, Centro Retail Australia (Centro Retail Australia would own or manage approximately AUD$7 billion of quality retail shopping centres across Australia) and advised on a debt for equity cancellation which involved almost AUD$3 billion of debt.
Restructure of luxury property development
We advised Brookfield Multiplex Limited on its participation in the restructure of the failed Raptis Group’s Hilton Surfers Paradise Hotel and Residences project. The restructure we designed involved the voluntary administration of the special purpose Raptis companies associated with the development as an alternative to conventional security enforcement. This proposal led to a deed of company arrangement being agreed by creditors which approved new project documents and a new project finance package by the existing secured creditor.
The proposal retained value for the secured creditor as well as safeguarding existing pre-sale contracts and management arrangements with Hilton, while protecting the project from adverse consequences of the insolvency of the wider Raptis Group.
Restructure of significant rail provider
We advised the directors of Brookfield Infrastructure on its AUD$5.1 billion equity raising and other steps which effected the restructure of its debt and equity concerning Brookfield Rail. Owned by Brookfield Infrastructure, Brookfield Rail controls over 5,100km of crucial rail infrastructure through the southern half of Western Australia. It is one of the few independent rail infrastructure providers in the world.
Loan-to-own strategy for refinery
We advised Dalby Bio Refinery, the buyer of a senior secured loan valued at A$100 million, on the implementation of a capital restructure through a loan-to-own strategy. This involved deeds of company arrangement for operating and holding companies and the acquisition of the entire issued share capital of the holding company.