Mandate activity slowed substantially in 3Q24 as the 64 new mandates in the quarter represented a 41% decline compared to 108 engagements in 2Q24. The mandates stemmed from 24 restructuring situations and involved EUR 33bn of debt, down 46.5% from EUR 61.6bn debt in the previous quarter. (If you would like to submit mandates, please email [email protected])

In-court

Of the 24 restructuring situations in this report, seven were engaged in an in-court process. These seven situations generated 23 mandates (35.9% of the total) on EUR 10.8bn debt (32.9% of the total). Sweden’s Northvolt AG was the largest in-court situation by mandated debt. The embattled electric vehicle battery maker, which hired advisors for its EUR 6.6bn debt stack in September and commenced a bankruptcy process for one of its projectcos in early October, is currently engaged in efforts to raise a fresh financing package, Debtwire reported on 6 November.

Out-of-court

There were 41 out-of-court mandates during the period, arising from 17 restructuring situations with EUR 22.1bn debt. Of these, Germany’s BayWa AG was the largest situation, with mandated debt of EUR 6.5bn. The agricultural trading services provider announced on 8 October that 95% of its creditors had agreed to a standstill until December, when a final restructuring concept paper is expected.

Germany

Germany generated the most mandates of any country in 3Q, with seven restructuring situations resulting in 31 engagements (48.4% of the total) with mandated debt of EUR 8.9bn (27% of total). After BayWa AG, Meyer Werft GmbH was the second largest German situation in terms of mandated debt. The builder of cruise ships successfully implemented a restructuring plan, as per a 17 September press release from its advisor Freshfields. The company first engaged advisors in April.

United Kingdom

The United Kingdom ranked second for the number of mandates in 3Q with 15 engagements (23.4% of total). These stemmed from seven situations with mandated debt of EUR 7.9bn (24% of total). Three UK situations involved more than EUR 1bn debt:

Lowell Group: The UK-headquartered debt collector began hiring advisors in late June to negotiate with creditors ahead of some large debt maturities in 2025. Debtwire reported in late September that the company’s options for dealing with its upcoming maturities range from a “home-run” large equity injection from its sponsor Permira, to an equitisation of its bonds. The company has total debt of EUR 3.8bn.

Farfetch Ltd: The luxury online retailer secured Ch.15 recognition of its Cayman Islands liquidation process in August, as Debtwire reported. The recognition order came after its foreign representative appointed an advisor and filed the petition on 10 July. Farfetch was ordered wound-up by the Cayman Islands Court in March 2024.

New Cineworld MidCo Ltd: The cinema operator’s four UK restructuring plans were sanctioned by the English High Court on 30 September, Debtwire reported. The company first appointed advisors back in May 2024.

Sweden

Although only providing five mandates from three situations, Sweden ranked highest on the amount of mandated debt in 3Q24, with EUR 11.3bn (34.3% of total debt mandated). After Northvolt – the largest situation in this report – the next largest Swedish situation was Samhallsbyggnadsbolaget i Norden AB (SBB), which had mandated debt of EUR 4.7bn. The real estate company completed an exchange offer covering 18 tranches of notes and perps in July, Debtwire reported.

Top advisor 

Kirkland & Ellis won the most mandates amongst law firms in 3Q24 with five, involving EUR 14.2bn of debt, also the most debt of any firm. Kirkland was also atop the 9M24 league table with a total of 18 mandates on EUR 36.6bn of debt. The firm’s largest mandate in 3Q24 (EUR 6.6bn) came from Northvolt, where it was engaged to represent the company in its on-going, in-court process. Wilkie Farr came second in the quarter with three engagements on EUR 2.5bn debt.

In terms of the number of mandates amongst financial advisors, PJT led with six mandates in the quarter on EUR 1.6bn of debt. It was followed by Teneo with three engagements on EUR 211m debt. For 9M24, PJT also led with 15 mandates on EUR 10.2bn of debt, followed by Rothschild with 13 mandates on EUR 12.6bn.

In terms of the amount of debt advised on in the quarter, AlixPartners, Roland Berger and Rothschild topped the financial-advisor rankings, thanks to their roles associated with BayWa AG’s EUR 6.5bn debt stack. For 9M24, Lazard lead with EUR 33.9bn debt advised on, followed closely by JP Morgan with EUR 33.3bn.

Legal Analysis 

UK schemes of arrangement and restructuring plans continue to prove popular with both UK and overseas debtors. Kirkland & Ellis, which tops Debtwire’s 3Q24 league table, has played pivotal roles in high-profile restructuring cases, not least acting for cinema chain Cineworld in relation to its recently sanctioned restructuring plans. Kirkland was mandated on EUR 1.5bn of Cineworld debt.

In the legally significant case, a late-stage challenge from two landlord creditors – who argued that the plans breached ‘side letters’ designed to prevent certain leases from being included in such a process – failed to derail the plans, with Mr Justice Miles declining to grant the requested injunctions. The Cineworld judgment set a precedent for debtors that have previously agreed compromises with specific creditors to potentially ‘U-turn’ and use restructuring plans to enforce further compromises. (Debtwire’s in-depth legal analysis can be found HERE).

Given the increasingly aggressive challenges recent in-court situations have faced, debtors are striving for out-of-court solutions, with Kirkland acting in cases including Keter and Hurtigruten. Earlier this year, in a Debtwire legal podcast with Kirkland, lawyers noted several situations that had pivoted away from restructuring plans due to concerns about appeals, stays and implementation risks following the English Court of Appeal’s judgment regarding the Adler Group.