Arendt advised ad hoc group of creditors on the $869.6 million restructuring of Unigel Group

Experts involved in the Deal:

Arendt advised a group of nine leading financial institutions on all Luxembourg law aspects of the successful $869.6 million cross-border restructuring of Unigel Participações S.A. and its subsidiaries.

Unigel is one of the largest chemical companies in Brazil, holding a leading position in the production of styrenics, acrylics, and nitrogen fertilizers in Latin America.

The restructuring was completed on 30 January 2025, following the confirmation of two extrajudicial reorganization plans filed with the 2nd Bankruptcy State Court for the São Paulo District of the State of São Paulo (the EJ plans). The U.S. Bankruptcy Court for the Southern District of New York granted recognition of the EJ plans under chapter 15 of the U.S. Bankruptcy Code.

Under the EJ Plans:

• various options were made available to the Unigel’s creditors including the option to contribute new money in exchange for a combination of first-lien 13.50%/15.00% senior secured PIK toggle notes due 2027, depositary receipts representing equity in Unigel’s parent company (HoldCo), second-lien 11.0%/12.00% senior secured PIK toggle notes due 2028 and junior 15.0% participating titles due 2044.
• Securities were granted over substantially all assets of the Unigel group.
• The Participating Titles may convert into 95% of the fully diluted equity of HoldCo upon the occurrence of certain conversion events.
• The Ad Hoc group and other creditors committed to backstop up to $100 million of the New Money Notes.
• Creditors providing new money received 50% of the equity in HoldCo, while the existing shareholder of Unigel retained the remaining 50%.

Arendt’s role was key in ensuring the seamless implementation of the debt exchange and restructuring involving Luxembourg entities, reinforcing our expertise in complex cross-border insolvencies and creditor negotiations.