Which governing law? Restructuring Apcoa's debt

Europe’s largest car park operator, Apcoa, has won an extension to the maturity date of its senior debt through an English scheme of arrangement. Phillip Hertz and Jeanette Best of Clifford Chance LLP, who represent the parent company of the group, discuss the process.

Original news

Apcoa Parking (UK) Ltd & others [2014] EWHC 997 (Ch), [2014] All ER (D) 49 (Apr)

The Chancery Division granted application for an order to convene scheme meetings in respect of Apcoa Parking Holdings under the Companies Act 2006, Pt 26 (CA 2006).

What is the background to this case?

Jeanette Best (JB): APCOA’s principal jurisdictions of operation are in the UK, Austria, Denmark, Germany, Norway and Belgium. The group has a facilities agreement in place in the amount of €660m and £33.83m, which was originally due to mature on 25 April 2014. The group has been seeking to restructure its obligations under the facilities agreement over a period of time, and, while they’ve made significant progress in that endeavour, the process hasn't finished. Completion of the negotiations and implementation of the restructuring was not on course to be completed by 25 April 2014. As a result, the Group sought to implement schemes of arrangement in respect of each borrower under the facilities agreement to extend the maturity date to 25 July 2014. The terms of the schemes also include a mechanism by which the maturity date can be further extended to, but no later than, 25 October 2014.

A scheme of arrangement is a legislative process set out in CA 2006, Pt 26. The aim of the procedure is to implement an agreement without the need to obtain the consent of all of the parties you are seeking to bind into such agreement. In the present case, under the terms of the facilities agreement, the consent of all lenders would have been required to extend the maturity date beyond 25 April 2014. The scheme allowed Apcoa to pursue an extension without getting the consent of all lenders. Instead, it only needed to secure the consent of a majority in number and 75% in value of the lenders under the facilities agreement. Only those lenders who were present and voting at the meetings coun

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