Convertible lenders of Celsa obtain approval of first non-consensual restructuring plan
Client(s) Ad hoc group of convertible lenders of Celsa
Jones Day advised a group of clients as lenders under a junior debt instrument advanced to the Celsa group, a family-owned business and one of the largest manufacturers of long steel products in Europe. A court in Barcelona issued a decision on the restructuring plan submitted by a majority of the lenders of the senior and junior debt of Celsa in September 2023.
The decision was rendered in the first-ever non-consensual restructuring plan filed by lenders applying a new set of pre-insolvency rules enacted in Spain at the end of September 2022. Until then it was not possible in Spain for lenders to force a restructuring plan upon a company and its shareholders. The new rules resulted from the transposition to Spanish law of the Restructuring Directive approved by the European Union.
The court found that the equity value broke in the debt and allowed the lenders to swap part of their claims for equity, thus wiping out fully the founding family. The application of these new rules is relevant for debt investors considering a loan to own strategy, and it gives them additional leverage in negotiations with debtors and sponsors.
