Global law firm White & Case LLP has advised the ad hoc group of noteholders (AHG) on the financial restructuring of Petra Diamonds Limited (Petra Diamonds) and its group (Group).
"The successful restructuring exhibits the market-leading capabilities of the financial restructuring and insolvency and finance teams in both our London and Johannesburg offices, as well as White & Case's unique knowledge and experience in the mining & minerals sector," said White & Case partner Christian Pilkington, head of the Firm's EMEA Financial Restructuring and Insolvency team, who led the deal team.
The Group's financial restructuring is effective as of March 10, 2021. White & Case advised the AHG on the US$650 million 7.25% senior secured second lien notes due 2022 (Notes). The restructuring involved part of the Notes being reinstated as new notes, with US$30 million new money being contributed by electing noteholders in subscription for additional new notes.
The remaining Notes debt was converted into new equity, which resulted in the noteholders holding 91 percent of the shares in Petra Diamonds. A scheme of arrangement (Scheme) was sanctioned by the High Court of England & Wales on January 12, 2021 to facilitate the implementation of the deal. The Scheme was granted recognition under Chapter 15 of the US Bankruptcy Code by the US Bankruptcy Court (Southern District of New York) and the restructuring was approved by the shareholders of Petra Diamonds shortly thereafter.
Headquartered in Jersey, Petra Diamonds is a London-listed diamond mining group, with interests in mines in South Africa and Tanzania. The Group experienced challenges caused by falling diamond prices and the impact of the coronavirus pandemic. These challenges had a material impact on the profitability and debt servicing capabilities of the Group, which sought a comprehensive restructuring of its capital structure. In addition to the Notes, this included first lien financing provided by a South African bank lender group, including in relation to the ownership stakes of the Group's Black Economic Empowerment (BEE) partners.
The restructuring involved strategic and structuring advice in the context of protracted deal negotiations as well as a comprehensive due diligence process. The White & Case team analysed, evaluated and accounted for various issues deriving from the Group's mining operations, including from an environmental, litigation, compliance and labour perspective, and the BEE ownership structure. White & Case drew on its international network to provide comprehensive and focused guidance to the AHG, allowing it to navigate the related complexities throughout the restructuring.
The White & Case team included lawyers from its Global Financial Restructuring and Insolvency Practice, Global Project Development and Finance Practice, Global Capital Markets Practice, Global Mergers & Acquisitions Practice and Global International Arbitration Practice in the London, Johannesburg, Brussels and New York offices, with support from external counsel on aspects of Bermudan and Tanzanian law.
The team was led by partners Christian Pilkington, Rebecca Campbell and James Greene (all London), and included partners Michael Mountain, Philip Broke, Clare Connellan (all London), Craig Atkinson and Joz Coetzer (both Johannesburg), local partners Shannon Neill and Matthew Burnell (both Johannesburg), counsel Andrzej Omietanski (London), Willem Van de Wiele (Brussels) and Richard Graham (New York), and associates Will Stoner, Beth Hough, Nayomi Skinner, Mahir Maini, Claire Sackman, Alex Field and Marianna Naicker (all London).
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