Metinvest BV, Re

I have before me an application for an order convening a meeting of creditors to consider and approve a scheme of arrangement pursuant to part 26 of The Companies Act 2006.

The company in question is Metinvest BV, which is incorporated under the laws of the Netherlands. It is the principal finance raising company for a group with very substantial mining and steel interests in Ukraine. The company having, for reasons explained in the evidence, got into financial difficulties, it has undertaken negotiations with creditors to facilitate a restructuring. Earlier this year, it sought and obtained a scheme providing for a moratorium. The scheme in question was sanctioned by Mrs. Justice Asplin on the 29^th January 2016. That scheme lasted until 27^th May and, shortly before the expiry of the moratorium, non-binding heads of terms for a restructuring of liabilities were agreed.

The idea lying behind the present application is to obtain, in effect, an extension of the moratorium for which the earlier scheme provided. It is proposed that the moratorium should last until the 30^th September 2016, subject to the possibility of both extension up to the 30^th November and earlier termination in certain circumstances.

The scheme with which I am concerned, like its predecessor, does not encompass all debts of the company. The scheme creditors are rather holders of notes that have been issued by the company. Three series of notes are relevant, expiring in 2016, 2017 and 2018. Between them they have an aggregate outstanding principal amount of some 1.2 billion US dollars.

The company also has liabilities pursuant to facilities referred to as the “PXF Facilities”. Those facilities, however, are not encompassed within the proposed scheme. So far as they are concerned, it is anticipated, as I understand it, that matters can be dealt with consensually.

Mr. David Allison QC, who appeared with Mr. Stephen Robins for the company, as well as outlining the background and what is now proposed, has directed my attention to particular matters that I need to consider today. The first of these relates to notification of the present hearing to interested parties. So far as that is concerned, the company sought to notify persons affected by the issue of a practice statement letter on the 25^th May.

The second topic on which I was addressed relates to the identity of scheme creditors. It is, in essence, proposed that the beneficial owners of notes should be enfranchised and, to avoid double counting, that the common depositaries and trustees should not vote. What is envisaged in that regard strikes me as entirely appropriate.

A third topic concerns classes. The issue there is whether the various noteholders are to be treated as a single class or more than one class. In that connection, Mr. Allison suggests that a single class is appropriate and I am persuaded that that is correct. There is in this respect, so far as I can see, no relevant distinction between the scheme with which I am concerned now and that which Mrs. Justice Asplin approved in January. That earlier scheme was considered in detail by Mrs. Justice Proudman at the convening hearing on the 13^th January and she concluded, having reviewed the relevant authorities, that the various scheme creditors should form just one class. I take the same view here.

Moving on to jurisdictional points, Mr. Allison has reminded me of the relevant law. Having addressed my mind to that, it does not seem to me that any jurisdictional points should dissuade me from ordering the convening of a creditors’ meeting as asked.

One of the points relied on as regards the recast Brussels Regulation is that ten underlying beneficial owners of notes have been identified as resident in England. Between them they apparently hold some 6 million dollars of notes. That is obviously a very small proportion of the total indebtedness; but, as Mr. Allison pointed out, there is case law suggesting that it is enough that just one creditor is domiciled in the United Kingdom and, in any event, in the particular circumstances of this case there may be additional reasons for dealing with the matter in an English court, especially since all the series of notes are governed by English law.

Finally, I was addressed on matters relating to notice, timing and conduct of the proposed creditors’ meeting. Again I can understand entirely what is proposed and I see no difficulty in relation to it.

In all the circumstances, I am satisfied that it is appropriate for me to make an order as proposed convening a creditors’ meeting. That meeting should, moreover, be a single meeting of the three classes of noteholder. There is no need, in my view, for there to be separate meetings.

That being so, I shall make an order in the terms of the draft with which I have been supplied.