DOTM: Celsa’s cramdown first

Author: Danielle Myles | Published: 23 Sep 2013

Thanks to this restructure, Spain’s distressed private sector has access to a local version of the UK scheme of arrangement

An unexpected court ruling makes Spain's new cramdown proceedings more accessible to the country's growing number of distressed companies, and will spur more constructive restructuring negotiations.

Local investment banks have already been approached by many corporates that are now able to take advantage of Spain's answer to the UK scheme of arrangement.

Celsa Group's €2.8 billion ($3.72 billion) restructure, concluded in August by an appeal court ruling, is the first time the country's judicial cramdown proceedings have been imposed on secured, syndicated creditors.

"This could change the way restructurings in Spain are carried out, and in particular the way dissident creditors oppose these deals, given the Celsa transaction has shown that their legal position may be not as safe as they thought it was," says Ángel Pérez...