Baker McKenzie advised Jain International Trading B.V. ("JITBV"), a direct subsidiary of Indian listed multinational micro-irrigation, food processing and plastic products conglomerate Jain Irrigation Systems Limited ("JISL") on its successful restructuring, implemented by way of an English law scheme of arrangement under Part 26 of the UK Companies Act 2006. London partners Priyanka Usmani and Haden Henderson led the Baker McKenzie team.
Financial difficulties within the Jain Group, together with liquidity issues exacerbated by the COVID-19 pandemic, left both JISL and JITBV in default of their debt obligations. JITBV has been in payment default on its US$200 million 7.125% senior notes due in 2022 (the "Existing Notes") since February 2020, and JISL is in on-going discussions with its lenders in India with regards to a restructuring of its Indian-law facilities. One of the prerequisites to the Indian restructuring is the successful completion of the Bond restructuring, adding to the complexity of the transaction.
The Restructuring, which completed on 29 September 2021, results in a major financial recapitalisation and restructuring of the Group, involving an injection of US$30 million new money funding and an exchange of the Existing Notes for three series of new notes (the "New Notes") with an extended maturity of four years, with each series of the New Notes due in March 2026.
Priyanka Usmani said: "We are delighted to have supported the Company on this long-running matter and see its Bond restructuring successfully concluded. This is an excellent example of our bank and bond teams working together to support our clients' interests, resulting in a more sustainable capital structure for the Jain Group."
Baker McKenzie's Global India Practice Head Ashok Lalwani added: "As a Firm that has been a business partner to our clients for their India-related work for more than 60 years, we are very pleased to have been able to bring our global full service capability to the table and assist the Company on this complex restructuring."
The Scheme, which was a fundamental part of the overall Restructuring, offered Noteholders the opportunity to: (i) participate in the new US$30 million first lien facility; (ii) exchange their Existing Notes for the New Notes, issued by JITBV and guaranteed by JISL; or (iii) tender their Existing Notes for cash under a Cash Option.
The JITBV Scheme of Arrangement was sanctioned by the High Court of England and Wales on 26 July 2021 following a hearing before Mr Justice Norris. This followed the Convening Hearing on 14 June 2021 and Scheme Meeting on 29 June 2021. The extended period between the sanction of the Scheme and the closing of the Restructuring was primarily due to certain Indian regulatory approvals that had to be obtained in order for JISL to guarantee the New Notes.
The Baker McKenzie team was led by London-based restructuring partner Priyanka Usmani and capital markets partner Haden Henderson. They were supported throughout by associates Sonali Maulik, Benjamin Bierwirth, Jerome Small, Alex Taylor and Benjamin Levitt, as well as trainee Natalie Lawman.
Solomon & Co. advised Jain Irrigation on the Indian-law aspects of the transaction, as well as the on-going Indian restructuring. The team was led by Aaron Solomon, who was supported by Kinjal Champaneria and Farshad Ali.