The deal was one of the most significant and complex restructurings in the Australian market of 2017
Herbert Smith Freehills (HSF) has acted for the senior lenders on the $1.2 restructure and recapitalisation of the Bis Industries group.
HSF advised the senior lenders, including entities managed by The Carlyle Group and affiliates of Värde Partners, on the transaction that was implemented in two stages.
Paul Apathy, HSF partner, said that the transaction was one of the most significant and complex restructurings in the Australian market of 2017. The senior scheme involved a number of unique elements not usually seen in creditors’ schemes, he said.
HSF said that Bis Industries group’s ownership structure was reorganised to transfer ownership to its senior lenders. Two creditors’ schemes of arrangement, and a subsequent recapitalisation of the group’s balance sheet through a partial debt-for-equity swap, were used.
The restructure simplified the group’s complex and highly geared capital structure to comprise senior secured debt and ordinary equity held by the senior lenders and PIK Note holders. The senior debt was significantly reduced from about $1.2bn to about $280m and $38m in finance leases, the firm said.
The deal was the first time a creditors’ scheme of arrangement has been used in the Australian market as an interim stabilising step in a broader restructuring process.
“The schemes also provided for a novel amendment mechanism in the group’s finance documentation to reduce the consent threshold required to take actions in relation to the senior debt, in order to more readily facilitate a debt for equity conversion and a rescheduling of the group’s debt, thereby obviating the need for a further creditors’ scheme of arrangement to ultimately implement the recapitalisation,” HSF said.
In addition to Apathy, partners John Nestel and Andrew Rich led the HSF team. They were assisted by teams across HSF’s corporate, finance and disputes practice groups, including partner Laura Sheridan Mouton; senior associates William Chew, Rowena White, Nikki Smythe and Margaret Fong; and solicitors Tiffany Cheung and Joshua Santilli.
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