Weil Advises on the Restructuring of OHL Group

LONDON 29 June 2021: International law firm Weil, Gotshal & Manges LLP advised an ad-hoc group of noteholders (the “Ad-Hoc Group”) in relation to the corporate and financial restructuring of Obrascón Huarte Lain, S.A. (“OHL”), a multinational construction and civil engineering group (“OHL Group”) headquartered in Spain. The restructuring was completed on 28 June 2021 and was implemented by way of an English Scheme of Arrangement.

The restructuring provides the OHL Group with extended debt maturities to enable it to realise non-core assets and reduce leverage, and will enable the group to focus on building its core business through investment in new projects with appropriate access to new bonding/guarantee facilities.  For noteholders, the restructuring provides substantial credit enhancements.

The Weil London team was led by Restructuring partners Neil Devaney and Matt Benson. They were assisted by Restructuring associates Jonathon New, Valean Gherendi and Wupya Nandap; Banking & Finance partners Patrick Bright, Nitin Konchady and  Paul Hibbert, counsels Alexander Horstmann-Caines, Stefan Monaghan and Ben Thompson; Corporate partner James MacArthur and associates Jack Gray and Bonian Wu; Tax partner Jenny Doak, counsel Stuart Pibworth and associate Enda Kerin.  Weil worked with Spanish law firm, Cuatrecasas, and financial advisers, PJT, on the deal.

ENDS

Notes to the editor

About OHL Group

The OHL Group is a global infrastructure group operating in 30 countries, with more than 20,000 employees and a strong presence in Europe, Latin America and North America. The OHL Group is a leading international player in the construction and management of infrastructure projects, including dams, hospitals, railways and maritime projects on behalf of clients in the public and private sectors.

About the restructuring

Before the restructuring, the OHL Group’s key financial indebtedness included (i) two series of English law governed senior unsecured notes: (x) €400,000,000 4.750% Senior Notes due 2022, and (y) €325,000,000 5.50% Senior Notes due 2023 (of which collectively €592,900,000 in principal amount remained outstanding) (together, the “Senior Notes”), and (ii) c. €782,301,492 of syndicated and bilateral bank facilities provided by a group of Spanish banks (including an emergency Covid-19 liquidity facility, partially guaranteed by the Spanish Official Credit Institute (Instituto de Crédito Oficial).

As a result of its high financial leverage, a sharp drop in demand in the construction sector and the impacts of the Covid-19 Pandemic, the OHL Group entered into restructuring negotiations with key stakeholders, including the Ad-Hoc Group, during summer 2020.

Weil led negotiations on behalf of the Ad-Hoc Group in relation to the restructuring, which included three key components: (i) an exchange of existing Senior Notes for new notes (including a reduction in principal from €592.9m to €488.25m, a maturity extension to March 2026 and a comprehensive guarantee and security package), (ii) an agreement with the OHL Group’s bank lenders in respect of various syndicated and bilateral bank facilities (including a new shared security package and intercreditor arrangements), and (iii) a new rights issue, backstopped by key shareholders, pursuant to which approx. €71.4m was raised by the Company.

The terms of the restructuring were agreed in a Lock-Up Agreement dated 20 January 2021 entered into by OHL, certain key subsidiaries, key shareholders and holders of approximately 93% of the Senior Notes.

The restructuring of the Senior Notes was implemented by way of an English law scheme of arrangement, which was overwhelmingly approved by scheme creditors at a scheme meeting held on 9 April 2021 and sanctioned by Mr Justice Miles on 15 April 2021.  The court was presented with expert evidence confirming that the effects of the scheme would be recognised in Spain, which is an important development for the on-going use of schemes in the post-Brexit environment.  Certain aspects of the restructuring will be ratified by way of a Spanish law homologation procedure post-closing.