Lawyer Monthly - February 2023

78 LAWYERMONTHLY FEBRUARY 2023 We advised four major bond restructurings in Germany in 2022, including Metalcorp. For 2023 we believe this number will double. advisors, we believe key to success (considering the short period of only 6 weeks we had from default until the second bondholders meeting) was a swift and transparent coordination and negotiation between all parties. In this case, the process was always transparent and negotiation professional. It certainly helped that all lawyers and financial advisors involved were known for their expertise in this area and knew each other from prior restructuring cases. As bondholders’ counsel, we spoke daily with the company and their advisors and addressed the most pressing matter in an always professional but pragmatic way that led to a win-win for everyone. Metalcorp was given an additional year through the extension of the bond and thus enough time to negotiate a refinancing and address operational issues. Also, we ensured that a potential cross default was avoided so that a going concern was ensured. In order to strengthen the bondholders’ position regarding early and final repayments, we negotiated a repayment schedule and additional collateral for the bondholders. We also were elected as joint representative, meaning we represent the whole bond until full repayment, and so we constantly monitor and have the right to request reports from the company. Why was DMR Legal a good fit for advising on the bond restructuring? What specialised skills and experiences did you and your colleagues bring to bear? DMR Legal is a rather young firm, but the mining facilities for the Bauxite that Metalcorp was mining were in Guinea, Africa, political stability was an issue. After the military coup in Guinea in September 2022 that led to regime change, it was unclear if the new regime would honour existing contracts and licenses. In addition, a very important bauxite shipment was delayed several times, so we needed to conduct some on-site investigation. We hired a local law firm who organised a visit, helped us with legal documents and gave us detailed reports about the circumstances at the site. From a procedural point of view, we had to contend with the fact that the company has its headquarters in Luxemburg and most of its management in Monaco, whereas the bond is issued under German law with most operational business done in Africa. This led to several challenges regarding communication, organisation and language barriers. We organised ourselves and made a restructuring plan as well as a timeline to deal with all issues in an orderly manner. Our experience with cross-border restructuring and a strong network in Europe and abroad helps us in these complex situations. How did you work with Norton Rose Fulbright and other key firms to ensure the satisfaction of all parties? Internally, it is important to work as a team and assign tasks to all team members. Besides project management and coordination, drafting of documents and market know-how was essential to represent the bondholders’ interests as best as possible. When it comes to working with other Can you tell us more about the role that you and your team played during the restructuring process? Our team was representing a group of larger institutional investors mostly consisting of asset managers and pension funds. We worked closely with German investors organisation SdK, who was organising many private investors. After the surprising default of Metalcorp, we started organising the bondholders and approaching Metalcorp for negotiations on the restructuring process. We held two investor conferences for the bondholders, sharing and explaining our analysis of the situation, and constantly negotiated terms with the company and their advisors and put them to votes in two bondholder meetings. In addition, we regularly exchanged views with another group of bondholders of the €300 million 2021/26 Metalcorp bond (WKN A3KRAP / ISIN DE000A3KRAP3). What were the key operational challenges that you took into consideration as part of the bond restructuring? The complexity of the restructuring negotiations resulted on the one hand from the prior event of default of Metalcorp, which had to be resolved, and on the other hand from the potential cross default regarding the €300 million 2021/26 bond. In addition, the issuer’s business model and the focus of its current activities in West Africa added to the complexity. We therefore requested and reviewed confidential information in this regard, organised an on-site visit carried out by local partners and obtained and discussed a plausibility check of Metalcorp Group SA’s liquidity planning issued by an auditor. Did any unforeseen obstacles arise? How did you deal with them? Most unforeseen obstacles were related to the operational business in Africa. As

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