Ad Hoc Group of Holders in Restructuring Support Agreement With Stoneway

Cleary Gottlieb represented an ad hoc group of bondholders holding a substantial majority of 10% senior secured notes due 2027 issued by Stoneway Capital Corporation (Stoneway) in the signing of a restructuring support agreement with respect to the restructuring of the notes and the settlement of certain mezzanine creditor claims.

Over the past year, Stoneway and its subsidiaries have suffered liquidity constraints. On May 18, 2020, following certain bankruptcy filing by the companies in Argentina and subsequent enforcement actions by the mezzanine creditors, the ad hoc group of holders entered into a standstill agreement to negotiate a restructuring. The bankruptcy filings in Argentina were subsequently withdrawn.

On September 21, 2020, the ad hoc group of holders entered into a restructuring support agreement to be implemented pursuant to proceedings that will be commenced by Stoneway under the Canada Business Corporations Act before the Ontario Superior Court of Justice. In exchange for their existing claims, each holder of existing notes is expected to receive new notes issued by the company with a principal amount equal to the principal amount of the existing notes that they hold, which includes a PIK option and a step-up rate option upon the occurrence of certain events. The holders of the new notes will continue to benefit from an all-assets pledge.

Stoneway is a privately held New Brunswick, Canada company headquartered in Buenos Aires, Argentina, established in 2016 for the purpose of constructing, owning, and operating power plants to provide electricity to the wholesale electricity market in Argentina through its indirect subsidiaries. 

For more information, see the press release here.