Legal Services
Aoshearman
Full Credential Description
EDF Man, a global commodities trader and broker, faced significant challenges due to the pressures of the Covid-19 pandemic and soaring commodity prices, which led to a highly leveraged position. To address these issues, EDF Man executed a USD1.5 billion restructuring plan, advised by Allen Overy, which involved a UK restructuring plan that allowed for the comprehensive restructuring of its borrowing base, revolving credit facilities, term loan facilities, private placement notes, and liabilities under a settlement agreement. A key aspect of the restructuring was the injection of USD300 million in new liquidity, essential for sustaining EDF Mans trading operations. The restructuring plan included an innovative elevation mechanism that enabled existing creditors to participate in the new funding, offering them higher-ranking treatment for part of their existing claims. This mechanism not only provided EDF Man with greater certainty of funding but also reduced the pricing of the new money, which was crucial given the volatile market . The new money was structured as a bespoke arrangement that combined a borrowing base facility, a margin line facility for commodity hedging, and a trade instruments facility, all under a single master facility. This flexibility allowed EDF Man to utilize the funds across different facilities based on seasonal needs and market , enhancing its operational resilience in a turbulent commodities market. The court recognized the fairness of the elevation mechanism, affirming its use for very good commercial reasons, and underscoring the innovative approach taken in this restructuring.