Walkers is delighted to have acted as Cayman Islands legal counsel in respect of the successful debt restructuring of MIE Holdings Corporation ("MIE") implemented by way of a Cayman Islands scheme of arrangement in relation to certain notes issued by the Company that were due on 12 April 2022 (the "Cayman Scheme"), along with consensual and inter-conditional agreements in relation to the restructuring of certain loan facilities (the "Loan Restructuring") (together with the Cayman Scheme, the "Restructuring"). Walkers worked closely with Ashurst (Hong Kong, Singapore and New York legal counsel to MIE) who led the Loan Restructuring and US law aspects of the notes cancelled and issued pursuant to the Cayman Scheme.
MIE is a Cayman Islands incorporated company listed on the Hong Kong Stock Exchange ("HKEx") (having issued notes listed on the Singapore Stock Exchange). MIE is the holding company of a group of companies which is one of the leading independent upstream oil and gas companies in the People's Republic of China focused on the exploration and development, production and sale of crude oil.
On 28 May 2021, Margot MacInnis of Grant Thornton Specialist Services (Cayman) Limited together with Mat Ng and Georgia Chow of Grant Thornton Recovery & Reorganisation Limited (Hong Kong) were appointed as joint provisional liquidators of the Company on a "light touch" basis for the purposes of developing and implementing a restructuring of MIE's financial indebtedness (the "JPLs"). Creditors were subsequently invited to enter into a Restructuring Support Agreement dated 28 October 2021 to support the Restructuring.
The Cayman Scheme was approved by an overwhelming majority of the relevant creditors of the Company at a scheme meeting held on 17 March 2022 (Cayman Islands time) which was sanctioned by an Order of the Grand Court of the Cayman Islands ("Grand Court") on 25 March 2022 (Cayman Islands time). The Order sanctioning the Cayman Scheme was filed with the Cayman Islands Registrar of Companies on 25 March 2022 such that the Cayman Scheme became effective in accordance with its terms on the same day, and along with the Loan Restructuring, the wider Restructuring successfully completed shortly thereafter, on 30 March 2022.
The Cayman Scheme effected the release and cancellation of MIE's existing notes in exchange for the issuance of new notes which will ease MIE's debt burden and allow MIE to focus on its business operations and continue to operate as a going concern. The use of a Cayman Islands scheme of arrangement, coupled with an application for Chapter 15 recognition of the Cayman Scheme to compromise the debt as a matter of its governing law (as part of the wider Restructuring) confirms the continuing popularity of the use of Cayman Islands schemes of arrangement in restructurings due to their flexible and robust nature. Combining the bilateral Loan Restructuring with the Cayman Scheme was also effective to deal with all of the debt on MIE's balance sheet without the need for parallel proceedings in Hong Kong or multiple classes in the Cayman Scheme.
One unique feature of the Restructuring was that an Order from the Grand Court of the Cayman Islands was sought and obtained with respect to the withdrawal of the relevant winding up petition and consequential discharge of the JPLs taking place conditionally upon a certain closing notice being issued informing creditors that the closing was to occur. Typically, orders are sought for the dismissal or withdrawal of the petition and discharge of the JPLs (appointed for restructuring purposes) after a restructuring has been completed. This new approach ensured that immediately following the completion of the Restructuring MIE was able to move forward without the need to seek further orders from the Grand Court (and the fact that the provisional liquidation process had completed was reflected in its public filings with the HKEx), saving time and expense.
The Walkers team was led by partners Joanne Collett, Peter Kendall and Tom Pugh, with support from senior counsel Fiona MacAdam and Michaela Lam, senior associate Jolin Lin and associates Siobhan Sheridan, Will Waldron and Zoë Nolan. The Ashurst team was led by partners Sophie Lyall, Anna-Marie Slot and Rob Child, along with senior associate Eileen Kelly and associates Cathie Wong, James Leung and Karan Puri.
The team also worked with Stroock, Stroock & Lavan LLP and Paul Hastings LLP in respect of recognition of the Cayman Scheme under the Chapter 15 in the US.