Restructuring of Photovoltaic Producer EU Sunday in Bulgaria

CMS successfully assisted Korea’s SDN Company Ltd on its successful regaining of control over photo-voltaic producer EU Sunday AD, which operates three projects in Bulgaria with 15 MWp installed capacity.

CMS’s team was led by Sofia Managing Partner Kostadin Sirleshtov and included Associates Borislava Piperkova, Elena Yotova-Yordanova, Raya Yoncheva, and Dimitar Dimitrov.

Interview with Kostadin Sirleshtov

“The best restructuring plan is the one that pays back to all minority creditors and gives an opportunity to the main creditor to put the company back on its feet.”

 

How do you ensure a restructuring plan is robust?

Bulgarian law provides various guarantees, as it requires a full review of the draft restructuring plan by the court, following a pre-review and consultation with the receiver. In many cases, and this one was a prime example of this, you also have various state authorities (National revenue agency, Municipalities, auditing companies and alike) as creditors to the debtor. On our end, as solicitors to the main creditor, we want to make sure that every draft restructuring plan follows the established precedents of the jurisdiction. There are deviations in the restructuring legislation of various countries and sometimes solicitors need to spend sufficient time with clients explaining the national specifics.

What are the first steps, from your perspective, when first instructed on a complex insolvency case?

A full analysis of the matter is the first and most important step. Many restructuring cases actually start as corporate cases, but due to various factors, they escalate into insolvency and further to restructuring. A very important next step is to consider the receiver that the main creditor shall instruct. The receiver needs to have both excellent legal skills and knowledge, and financial background and experience. They are running the company in the interim period and by definition, the company is sailing through troubled waters. As a next step, you need a full alignment with the main creditor(s). Last, but certainly not least, you need to have strong financing secured for the entire venture.

What challenges arose during negotiations? How did you navigate them?

The restructuring plan involved more than ten creditors, including the Bulgarian state, which – by definition – is challenging.  Navigating and negotiating with the existing financial institutions is always a challenge. We had to put together a very strong legal team, supported by financial and technical experts working together in order to get to the final result. But as they say – the restructuring is just the beginning of every revival, so it is just the first stage of a long process ahead of us.