Hogan Lovells advises the BOURBON Group on the restructuring of €3 billion in equity and debts

The BOURBON Group comes out of reorganization proceedings with a sharp reduction of its debt, a strengthened balance sheet and continues its transformation.

Impacted by the structural difficulties facing the oil market since 2014, the BOURBON Group entered into discussions with almost all of its bank creditors and lessors in France and abroad.

At the end of these negotiations, the BOURBON Group and its creditors reached an agreement enabling a massive reduction in debt of over €1.5 billion, from €2.648 billion to €1.065 billion, including €228 million in bonds redeemable for shares (which could be converted into shares from the end of 2021 depending on current market conditions).

This restructuring was carried out in particular through the conversion of receivables into instruments giving immediate or future access to the capital of Société Phocéenne de Participations, the holding company at the head of the BOURBON Group.

In addition, this reduction in debt was accompanied by the implementation of new financing in the amount of €150 million, in addition to the granting of state-guaranteed loans in the amount of approximately 38 million euros.

As a result of this restructuring, the BOURBON Group is now fully owned by its own creditors. Alongside the largest French banking groups (Société Générale, BNPP, BPCE, Crédit Agricole and Crédit Mutuel in particular), other foreign institutions have also become shareholders, including ICBCL and Standard Chartered Bank with a stake of approximately 18% and 10% respectively.

Philippe Druon, head of Paris BRI practice said "BOURBON is an exceptional case in many respects, if only because of its duration, since it began for us in August 2016. Its technical complexity is also absolutely unprecedented. It required the alignment of all the creditors of the BOURBON Group, often with divergent interests, on a joint restructuring proposal. In addition to the amount of the restructured debt, it is also undoubtedly the multiplicity of the types of financing and the jurisdictions involved that make it a special case. This is one of the most important lenders led ever made in France. To support the Group in all stages of this unprecedented restructuring, we have involved a multidisciplinary and international team composed of the best specialists in Paris and in our offices in London, Luxembourg and Singapore. This case is a model of teamwork not only internally but also with our colleagues at Freshfields and De Pardieu".

Astrid Zourli, Paris BRI Counsel added "This case is also first of its kind by its technical and legal complexity. Moreover, this restructuring required a very rigorous cross-border coordination in order to achieve a simultaneous implementation of the restructuring operations”.

A multi-jurisdictional team from Hogan Lovells advised the BOURBON Group, led from the Paris office by Philippe Druon, head of the Paris BRI practice, and Astrid Zourli, Counsel. In Paris, the team also included Clémence Droz, Hugo Bodkin, Paul Duarte and Fatoumata Traore (associates) on the restructuring aspects ; Alexander Premont (partner), Cristina Marin and Guergana Zabounova (Counsel), Constance Brégé and Tam Tran (associates) on the financing aspects ; Jean-Marc Franceschi (partner), Laura Medjoub, Claudia Reix and Leonie Bontoux (associates) on the Corporate aspects; Xenia Legendre (partner), Thomas Claudel (Counsel) and Maximilien Schmitt (associate) on the Tax aspects. Andrew Carey (Senior Counsel), Stephanie Saunders and Ailsa Davies (senior associates) in London and Alexander Koch (partner), Emmanuel Lamaud and Benoit Serraf (senior associates) on the corporate aspects and Gérard Neiens (partner), Pierre-Luc Wolff (senior associate) on the tax aspects in Luxembourg have been involved in this transaction.