Metinvest BV, Re

On an application under Companies Act 2006, Part 26, the court may convene a creditors’ meeting where the proposed scheme and the surrounding circumstances make that course appropriate. Noteholders with no relevant legal or economic distinction may be treated as a single class. The court should consider jurisdiction, notice, timing, meeting arrangements and the identity of those entitled to vote, including safeguards against double counting. A meeting may be convened even where only a small proportion of creditors are domiciled in the United Kingdom, particularly where the relevant instruments are governed by English law and other jurisdictional factors support the English court’s involvement.

Metinvest BV, a Netherlands-incorporated financing company for a Ukrainian mining and steel group, experienced financial difficulties and negotiated a restructuring of liabilities. It applied for an order convening a meeting of holders of three series of notes, with an aggregate outstanding principal amount of approximately US$1.2 billion, to consider a scheme of arrangement under Part 26 of the Companies Act 2006.

The proposed scheme was intended to extend a moratorium provided by an earlier scheme, while excluding liabilities under separate PXF Facilities. The issues included notification, the identity of scheme creditors, class composition, jurisdiction, timing and conduct of the meeting.

The application was granted. The court ordered the convening of a creditors’ meeting on the terms of the draft order.

1. The proposed scheme concerned noteholders in three series of notes. The beneficial owners were appropriately to be enfranchised, while the common depositaries and trustees were excluded from voting to avoid double counting.

2. The noteholders were properly treated as a single class. There was no relevant distinction between the present scheme and the earlier scheme, under which the scheme creditors had also been treated as one class.

3. The jurisdictional objections did not dissuade the court from convening the meeting. Ten underlying beneficial owners were resident in England and held a small proportion of the notes. The court noted that authority suggested that one creditor domiciled in the United Kingdom could suffice, and that the notes were governed by English law. In the circumstances, there could be additional reasons for the English court to deal with the matter.

4. The proposed arrangements for notice, timing and conduct of the meeting were satisfactory. No separate meetings were required for the three groups of noteholders.

A single meeting of the three classes of noteholder was therefore ordered.