Baker McKenzie acted for our long-standing client, ASX listed Emeco Holdings Limited (EHL), on its recapitalisation and its merger with Andy's Earthmovers and Orionstone which completed on 31 March 2017.

The recapitalisation was undertaken by means of a court sanctioned creditors' scheme of arrangement under section 411 of the Australian Corporations Act in relation to Emeco's US$280m senior secured 2019 notes. This is only the second scheme of arrangement undertaken in relation to 144A notes by an Australian company and the first since 2003.

Under the scheme, current noteholders received new senior secured 2022 notes for 80% of their debt with the remaining 20% coming from equity in EHL.

EHL also acquired Andy's Earthmovers and Orionstone with their shareholders receiving equity in EHL and their secured creditors voluntarily exchanging their debt on the same 80% 2022 senior secured notes/20% EHL equity basis as the Emeco noteholders under the scheme.

EHL also undertook an underwritten rights offer for A$20m and entered into a new A$65m revolving loan facility.

A key aspect of the deal was obtaining recognition of the Australian scheme of arrangement under Chapter 15 of the US Bankruptcy Code, a first in respect of an Australian issuer of high yield notes.
Baker McKenzie lead partner, Bryan Paisley stated:

Whilst incredibly compex from a legal perspective, this transaction has resulted in a great outcome for both the shareholders and secured creditors of Emeco, Orionstone and Andy's.

Bryan further commented: "Drawing a scheme booklet together and lodging it within three weeks of the initial announcement with ASIC was extraordinary given the complexity of the scheme proposal and the fact it needed to cover the merger of Orionstone and Andy's."

Following completion, Emeco will have a significantly enhanced capital structure. The transaction significantly deleverages the business and the company's new secured notes and revolving credit facility provides it with the financial flexibility to generate cash to continue to reduce debt.

Adding to the complexity, Bryan added: "The matter had a large cross border component involving a restructure of New York law governed bonds issued by ASX listed Emeco Holdings and held via the Depository Trust Company."

Emeco Chief Legal, Risk & Business Transformation Officer, Thao Pham praised Baker McKenzie by stating: "We acknowledge that we have always placed high demands on the Baker McKenzie team over the years and they have always stepped up to meet our needs.  However, this transaction involved numerous complex matters and countless complications which always needed to be dealt with in a very condensed timeframe.  The transaction truly commanded a remarkable effort from Baker McKenzie and we cannot fault their commitment to Emeco."

The work involved both Baker McKenzie lawyers in Sydney, New York, Chicago, Singapore, London,  Santiago and Houston across various practice groups  in assisting Bryan, including David Holland, Maria O'Brien, David Walter, Teresa Ientile, Heather Sandell, Peter Debney, Bernice Ng, Rebekah Lam, Jeanie Chang at Baker McKenzie [in Hong Kong, Justin Wong and Emily Hunter in Sydney, Adam Farlow, Debra Dandeneau, Kyle Pilkington, Charles Farnsworth and Heather Byrne on the US Securities aspects and David Heroy, Erin Broderick and Mark Young on the Chapter 15.


  • Gilbert + Tobin and Sullivan & Cromwell acted for the ad hoc committee of Emeco Noteholders.
  • King & Wood Mallesons acted for Orionstone.
  • Ashurst acted for the Orionstone secured creditors.
  • Madgwicks acted for Andy's.
  • Allens Linklaters acted for ANZ, a secured creditor of Andy's.
  • Clayton Utz acted for Bank of New York Mellon as the Emeco note trustee.
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