Ambatovy Minerals Société Anonyme & Anor, Re

The court granted permission under Part 26A of the Companies Act 2006 to convene creditor meetings to consider a restructuring plan (the Plan) for two Madagascar-registered companies. The judge found that the jurisdictional conditions in section 901A were met: the companies are foreign companies liable to be wound up and are encountering financial difficulties; and the purpose of the compromise was to mitigate those difficulties by providing new money and a compromise between the companies and their creditors. The convening hearing also addressed adequacy of notice and the explanatory statement, both of which the court found satisfactory for the intended creditor audience.

On class composition the court accepted, for the purposes of convening, a two-class structure (i) Super Senior lenders; and (ii) Senior lenders, 2021 NM lenders and Recovery Financing lenders, while permitting the Senior lenders to challenge class composition at any sanction hearing. The court found no obvious jurisdictional roadblocks to eventual sanction and directed a timetable for a sanction hearing to be listed on 25 November 2024 for five days.

The two Plan Companies (Ambatovy Minerals S.A. and Dynatec Madagascar S.A.), operating a nickel and cobalt mine in Madagascar, applied for permission under Part 26A to convene creditor meetings to consider a restructuring Plan. The Plan seeks to raise new money (a Senior new-money facility) and to write down or restructure existing debt classes so the operations can continue and the balance sheet be reduced. The Plan affects approximately US$2.3bn of indebtedness, including Super Senior, Senior, 2021 NM and Recovery Financing tranches.

Nature of the application: permission to convene creditor meetings under Part 26A Companies Act 2006 to consider a restructuring Plan.

Key issues before the court:

• whether the statutory jurisdictional conditions in section 901A were satisfied;
• whether adequate notice and an adequate Explanatory Statement had been provided to creditors;
• proper class composition for the convening of meetings;
• whether there were any obvious jurisdictional or other roadblocks that would prevent eventual sanction; and
• procedural timetable and directions leading to a sanction hearing.

Court’s reasoning and conclusions: the court accepted that the companies were within section 901A(1) and met condition A (financial difficulties affecting the ability to carry on business) and condition B (purpose of the arrangement to mitigate those difficulties) on the evidence before it. Notice (circa 40 days) and the Explanatory Statement parts 1–6 were appropriate for a sophisticated, legally represented creditor body. On class composition the judge applied the ‘dissimilarity of rights’ principle from authority and, on the material before him and given commercial urgency, allowed the proposed two-class structure for convening purposes while preserving the Senior lenders’ right to challenge composition at sanction. The court also held that there were no obvious jurisdictional roadblocks at the convening stage, and that international effectiveness and sufficient connection issues should be addressed, if necessary, at sanction. The court approved the parties’ agreed directions and listed a five-day sanction hearing (with one day pre-reading) to begin on 25 November 2024, leaving substantive fairness and other contested issues for that hearing.

Subsidiary findings: the court noted the factual and commercial background including prior restructurings, the composition and ranking of the indebtedness, the Super Senior facility of 22 April 2024, and the Plan’s proposed treatment of participating and non-participating creditors; it also emphasised the parties’ obligation to co-operate and to present a stable factual position at sanction rather than evolving positions during the hearing.

Permission to convene the proposed creditor meetings under Part 26A was granted. The court held that the statutory conditions in section 901A of the Companies Act 2006 were satisfied on the evidence, that adequate notice and an adequate Explanatory Statement had been provided to the creditor audience, that a two-class structure was appropriate for convening purposes (subject to later challenge at sanction by the Senior lenders), and that there were no obvious jurisdictional roadblocks to sanction. A five-day sanction hearing was directed to be listed on 25 November 2024.