Variation to convening meetings
The court approved a variation to a convening order to allow for four creditors’ meetings (rather than two) in circumstances when not all creditors had given written consent to the proposal.
In August 2024, the companies that run the Ambatovy nickel and cobalt mine applied for a restructuring plan that would enable the mine to continue to operate. At the hearing in September, the court granted permission to convene the creditors’ meetings for the purpose of considering the restructuring plan, with two classes: (i) the super senior lenders and (ii) the senior lenders, 2021 NM lenders, and recovery financing lenders. The court allowed the senior lenders to challenge class composition at the sanction hearing, subject to the agreed directions between the parties.
Negotiations resulted in a revised restructuring proposal, which would result in a better outcome for all creditors. The majority of the senior lenders agreed to the proposal, although four remained silent as to whether they would object to the amended proposals at the sanction hearing.
The companies applied to vary the convening order to hold four class meetings. The court held that:
- In circumstances where all the senior lenders had been involved in the negotiations relating to the revised restructuring plan, they were considered to have been properly notified of the hearing, even in circumstances when the portal had not expressly drawn attention to the convening hearing.
- The original convention order was no longer appropriate. At least four meetings would be required, subject to fragmenting factors. The court confirmed that a creditor’s philosophical objection to its rights being pre-committed did not constitute a fragmenting factor.
- For the proposal to qualify as an arrangement, it had to have some element of give and take. The court was inclined to treat the question of whether the proposal was qualifying as semantic rather than substantive.
- Notwithstanding that four senior lenders did not sign the agreement, it was in the interests of all the parties, and the court, that the convening order was amended.
- The sanction hearing was listed to commence on 25 November.
In regards to Ambatovy Minerals Société Anonyme and another [2024] 10 WLUK 402.
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