Syncreon Restructuring Support Agreement

Looking to the future: Syncreon`s reorganization is widely seen as the first use of an English arrangement scheme to restructure debts issued by a US-based global company. It also appears to be the first time that an English system has been recognised under the CCAA. Further innovative cross-border restructurings are to be expected. The group considered several implementation options (including a Chapter 11 in the United States), but concluded that the use of English jurisdiction and the Scheme process was the only viable route for corporate restructuring scheme on the basis of the company`s lawsuit. In order to establish a sufficient link with the English jurisdiction to allow the English High Court to sanction the systems, both pcf lenders and bondholders obtained agreement to amend the current PCF legislation and New York notes prior to the introduction of the systems and the distribution of the letter of practice statement into English law. In the judgment on sanctions, Judge Falk concluded that she was satisfied that the amendment of the PCF and the observations on English law were sufficiently linked to jurisdiction and found that it was also relevant that the RSA`s conclusion of more than 95% of the two categories of creditors submitted to the jurisdiction of the English court (see recital [29] of the judgment on sanctions). Judge Falk also stressed that “the use of the English jurisdiction and the Scheme procedure is considered to be the only viable means of restructuring scheme companies on the basis of the continuation of the undertaking” (see recital [29] of the sanction judgment). As part of the restructuring of its $1.1 billion debt package, the group attempted to modify the debt of a $680 million credit facility guaranteed as a priority and a priority obligation of $225 million. A Dutch company, syncreon BV, was the borrower of the credit facility and the issuer of the bonds. These installations were guaranteed, among others, by an English company, syncreon Automotive (UK) Ltd.

At the beginning of the transaction, both entities were subject to New York law. Ultimately, syncreon`s restructuring was supported by approximately 99% of secured lenders and bondholders. The systems were sanctioned by the English court in early September 2019 and were recognized shortly thereafter in the United States and Canada. Syncreon`s restructuring was a particular feat, given that it was the first time an English system had been used to restructure debts issued by a U.S.-based group and the first time a Canadian court had granted CCAA recognition to an English system. Auburn Hills, Michigan – October 1, 2019 – syncreon Group B.V. (with its subsidiaries “syncreon” or “the Company”) announced that it has completed its recapitalization with effect from today`s date, that Syncreon has significantly reduced its debt, reduced its annual interest expenses, thereby improving free cash flow and increasing its liquidity through a further capital increase of approximately $250 million. The systems have been used as restructuring instruments by companies in the United Kingdom, the European Union and beyond. For example, in re Vietnam Shipbuilding Industry Groups [2013], a debt restructuring system of a company registered in Vietnam was used, in RE Noble [2018], a system was used to restructure the debt of a Bermuda-based company and a system was used at RE Agrokor DD [2019] to restructure the debt of a company registered in Croatia. In addition to these restructuring issues, Jones Day has also relied on lawyers at other firms to deal with non-restructuring issues (such as business, taxes and finance). For example, Jones Day relied on corporate and tax lawyers in its offices in the U.S. and Amsterdam to ensure that syncreon`s internal reorganization, which included the creation of a new Dutch holding company, was carried out in the most efficient way possible.

In the development of an efficient tax structure for syncreon`s English system, Jones Day`s U.S. . .