A Spanish packaging company has successfully used a UK scheme of arrangement to reach a restructuring agreement with its syndicated creditors, paving the way for other troubled Spanish corporates to follow suit.
The scheme of arrangement, approved in May and effective as of August 11, allowed La Seda de Barcelona to exclude dissenting creditors from the agreed debt package, a process that is not possible under Spanish law.
The problems lay in the 610 million ($773 million) of syndicated debt that was held by a mixture of Iberian banks and institutional investment funds. With a close-to 50% split between the two types of creditor, neither group was large enough to drive through a deal by forming a majority agreement of two-thirds or more.
As the company had already reached agreements with both its trade creditors and bilateral debtholders, it was particularly keen to achieve a restructuring rather than be...