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...