Vol 17 (2020) - Issue 1

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Re NN2 Newco Limited [2019] EWHC 1917 (Ch) and [2019] EWHC 2532 (Ch)

Synopsis

In the summer of 2019, the Nyrstar group ('Nyrstar') completed a financial restructuring, delivered in part via a UK scheme of arrangement under Part 26 of the Companies Act 2006. The terms of the wider restructuring are reported in detail in 'Zinc or Swim? The Restructuring of the Nyrstar Group' by Bethan Cunniffe and Samantha Rigney elsewhere in this issue of International Corporate Rescue. This article is focused on the scheme which dealt with: (i) two series of New York law high yield notes, issued by a Dutch issuer and listed on the Luxembourg Stock Exchange and (ii) a series of English law convertible bonds issued by the then Belgian group parent and listed on the Freiverkehr of the Frankfurt Stock Exchange ((i) and (ii) together the 'Bonds'). The scheme was proposed by a special-purpose UK company, incorporated specifically to accede to the Bonds for the purpose of delivering the restructuring. Norris J, sitting in the High Court, handed down judgments at both convening and sanction stage, which offer welcome clarifications in relation to schemes, in particular in respect of jurisdiction and 'forum shopping', asymmetric jurisdiction clauses and fees paid to creditors. Despite little nexus to the UK at the outset, the scheme structure, combined with Chapter 15 recognition in the US, provided an effective mechanism to release both the primary obligations of the issuers and also the secondary obligations of the multiple guarantors across Nyrstar’s global group, through a wholly UK-based process able to withstand the throes of Brexit.