Smile Telecoms Holdings Ltd, Re [2021] EWHC 685 (Ch) (19 March 2021)

Smile Telecoms Holdings Ltd, Re [2021] EWHC 685 (Ch) (19 March 2021)

The court refused to sanction the restructuring plan at this stage because the effectiveness of the plan was subject to the satisfaction of the Al Nahla Funding Conditions, which depended on the unfettered discretion of third parties (GEPF and LuxCo). The court held that it could not exercise its discretion to sanction the plan while its effectiveness was contingent on such unresolved conditions, as this would amount to abrogating its judicial responsibility and acting in vain. The application was adjourned pending clarity on whether the conditions would be satisfied.

Citation
[2021] EWHC 685 (Ch)
Parties
Claimant: Smile Telecoms Holdings Limited; Senior Lender Plan Creditor / Dissenting Creditor: Government Employees Pension Fund of South Africa (GEPF)
Jurisdiction
England and Wales
Judgment Date
19 March 2021
Procedural Posture
Restructuring Plan Sanction Application / Sanction Hearing Under Companies Act 2006, S.901 F and S.901 G
Outcome
Application adjourned; no order sanctioning the plan made at this stage.
Legal Topics
Restructuring Plan, Cross Class Cram Down, Conditionality of Sanction, Jurisdiction and Recognition, Creditor Meetings, Court Discretion
Insolvency Company Law Restructuring Plan Cross Class Cram Down Conditionality of Sanction Jurisdiction and Recognition Creditor Meetings Court Discretion

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Parties

Smile Telecoms Holdings Limited

Claimant

Government Employees Pension Fund of South Africa (GEPF)

Senior Lender Plan Creditor / Dissenting Creditor

Procedural Posture

Restructuring Plan Sanction Application / Sanction Hearing Under Companies Act 2006, S.901 F and S.901 G

Legal Issues

  1. 1 Whether the court should sanction a restructuring plan under s.901F and s.901G of the Companies Act 2006 where a dissenting class exists and plan effectiveness is subject to unsatisfied third-party conditions.

Ratio Decidendi

The court refused to sanction the restructuring plan at this stage because the effectiveness of the plan was subject to the satisfaction of the Al Nahla Funding Conditions, which depended on the unfettered discretion of third parties (GEPF and LuxCo). The court held that it could not exercise its discretion to sanction the plan while its effectiveness was contingent on such unresolved conditions, as this would amount to abrogating its judicial responsibility and acting in vain. The application was adjourned pending clarity on whether the conditions would be satisfied.

Court Disposition

Application adjourned; no order sanctioning the plan made at this stage.

Orders

  • Application for sanction of restructuring plan adjourned to a future date to be fixed.
  • Matter reserved to Mr Justice Trower for expedited further hearing.