In the matter of Yunneng Wind Power Co, Ltd

The Company, incorporated in Taiwan, applied for an order to convene five class meetings of its finance creditors to consider a Restructuring Plan under Part 26A of the Companies Act 2006. The court found that it had jurisdiction because the finance documents were governed by English law and that Conditions A and B (section 901A/section 902A) were satisfied: the Company faced imminent financial difficulties and the Plan was a compromise intended to mitigate those difficulties. The judge applied established authorities on class composition and concluded that the proposed five classes were appropriately constituted given differences in instrument type, drawings, ranking and maturity, and that no procedural "roadblocks" existed to prevent convening the meetings. The court directed that the five creditor meetings be convened.

This is a first instance convening hearing. The Company sought an order to convene five meetings of its finance creditors (the "Plan Creditors") to consider and, if thought fit, approve a Restructuring Plan under Part 26A of the Companies Act 2006. The Restructuring would provide up to the NTD equivalent of c500 million under a Super Senior Facility, permit drawdown of certain previously draw-stopped undrawn facilities, and facilitate up to c1.2 billion of shareholder funding, in aggregate up to c1.7 billion.

The court was asked to determine four issues at the convening stage:

• jurisdiction to make a convening order;
• whether Conditions A and B (as set out in the Companies Act 2006) were satisfied;
• the appropriate composition of creditor classes for voting; and
• whether any non-merits procedural obstacles ("roadblocks") would preclude convening meetings.

The judge concluded:

• jurisdiction: established because the claims and key finance documents were governed by English law and there was established authority for jurisdiction in such circumstances;
• Conditions A and B: proved on the evidence, the Company facing imminent liquidity exhaustion without the Plan and the Plan proposing a compromise to mitigate those difficulties;
• class composition: five classes were appropriate (FFS Debt; Base and Commercial Standby (drawn) excluding certain undrawn Euler Hermes and standby amounts; Undrawn Base and Standby; Working Capital and VAT; Hedging providers). The court applied the legal test that class members must have rights not so dissimilar as to make consultation on common interests impossible, considering differences in instrument type, drawing status, ranking and maturity and concluding these did not fracture the proposed classes; and
• roadblocks: none identified that would prevent convening; the explanatory statement and notice were adequate in the urgent circumstances; the court accepted it was appropriate to permit waivers of draw-stops and that outstanding regulatory approvals did not prevent sanction at later stage.

The judge therefore directed that the five class meetings be convened for 15 August 2023 (to be held hybrid) and made ancillary directions about circulation of the Explanatory Statement and documents. The judge noted the comparator analysis showing materially higher recoveries under the Plan than in a Taiwanese bankruptcy alternative and observed the urgency arising from forecast cash exhaustion in August 2023.

The court directed that the five proposed meetings of Plan Creditors be convened. The judge held that (i) the court has jurisdiction because the relevant finance documents are governed by English law, (ii) Conditions A and B under the Companies Act 2006 are satisfied, (iii) the proposed five classes are properly constituted because differences in rights were not so dissimilar as to make consultation on common interests impossible, and (iv) there were no procedural "roadblocks" preventing convening. Consequently the convening order was made to enable the Plan Creditors to vote on the Restructuring Plan.