On Wednesday 29 April the Outer House of the Court of Session in Edinburgh issued an opinion sanctioning two schemes of arrangement proposed by Premier Oil Plc and Premier Oil UK Limited (together, Premier Oil) (the Schemes). The Court addressed multiple grounds of challenge and did so without hearing live evidence, despite disputes of fact between the parties.
Premier Oil’s largest creditor, Asia Research and Capital Management (ARCM), holding a c15% stake across Premier Oil’s debt, opposed the Schemes at the Court hearing held on 17-19 March 2020 and has lodged an appeal against the Court’s sanction decision. Until the outcome of ARCM’s appeal is resolved, the Schemes are effectively stayed.
ARCM’s opposition to the Schemes was multi-faceted, ranging from challenging the permissible scope of Schemes, the proposed creditor class composition and its use of an insolvent comparator, to arguing that the Schemes are inherently unfair. ARCM also argued at the sanction hearing that the recent oil market collapse rendered the Schemes nonviable.
In her opinion, Lady Wolffe rejected each of the grounds of challenge raised by ARCM. This article discusses some notable issues decided in the opinion.