OQ Chemicals Holding Drei GmbH & Anor, Re

The judgment grants the scheme companies' applications for convening orders under Part 26 of the Companies Act 2006 and section 896(1), directing single meetings of Scheme Creditors to consider materially identical inter‑conditional schemes of arrangement. The court held that sufficient notice had been given, that the proposals fell within the court's jurisdiction as compromises or arrangements with creditors, and that there was no apparent "roadblock" to international effectiveness despite the companies being foreign‑incorporated. The court accepted that a change to English governing law had been validly procured to facilitate the schemes and that, on a comparative assessment of pre‑ and post‑scheme positions, a single class of lenders (term and revolving) was appropriate despite differences arising from certain measures described as the "snooze" provision and the temporary reduction of the veto in respect of certain "sacred rights". The explanatory statement was adequate for convening purposes and directions for remote meetings were approved.

Background and parties: The applicants were two members of the OQ Chemicals group: a German incorporated company (the German borrower) and a Delaware incorporated company (the US borrower). Each sought orders to convene a single meeting of its Scheme Creditors to vote on materially identical, inter‑conditional schemes of arrangement under Part 26 of the Companies Act 2006 to extend loan maturities to 31 December 2026. The indebtedness comprised euro and US dollar term tranches and a revolving facility governed originally by New York law, later amended to English law to facilitate the schemes.

Nature of the application: Applications for directions to convene scheme meetings and approval of related procedural steps (timetable, explanatory statement, remote meeting directions). The schemes formed part of an overarching restructuring supported by an RSA, super‑priority bridge funding and an intended parallel M&A process.

Issues framed by the court:

• (i) Whether notice to interested parties was sufficient for the convening hearing.
• (ii) Jurisdictional questions: whether the proposals were arrangements or compromises within section 896(1) and whether there was a sufficient connection to England and Wales, including the impact of the governing law amendment.
• (iii) Whether there was any roadblock to international effectiveness in the jurisdictions of incorporation (Germany and the United States).
• (iv) Class composition: whether a single class of all lenders was appropriate given differences between term and revolving lenders and proposed changes such as the "snooze" provision and a time‑limited reduction of veto rights in respect of certain "sacred rights".
• (v) Adequacy of the explanatory statement and procedural directions, including remote meeting arrangements.

Court's reasoning: The court found 15 days' notice sufficient in the circumstances. It treated the proposals as arrangements with sufficient "give and take" under section 896(1). The amendment of the governing law to English law, approved by the requisite lender consents, did not present an improper purpose and, at convening stage, there was no clear and insuperable obstacle to recognition in Germany or the United States; final effectiveness was principally a matter for the sanction hearing. On class composition the court applied the comparative test (position if schemes do not become effective versus position if they do) and concluded that the essential rights and economic positions of term and revolving lenders were substantially similar (shared security package and pari passu ranking). The court considered the impact of the fees, the underwriting/new‑money arrangements, the "snooze" provision and the temporary reduction of the veto on "sacred rights". It concluded that those measures taken as part of the integrated package did not make it impossible for the creditors to consult together and therefore did not fracture the proposed single class. The court approved the explanatory statement for convening purposes and granted directions for remote meetings in line with earlier guidance.

Procedural outcome: The court made the convening orders in the form sought.

The court granted the applications and made convening orders for single Scheme Creditor meetings in each company. The judge concluded that notice was sufficient, the court had jurisdiction under section 896(1) as the proposals involved sufficient give and take, there was no apparent roadblock to international effectiveness, and a single class of lenders was permissible on a comparative analysis of creditor positions. The explanatory statement and directions for remote meetings were approved for convening purposes.