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2020: Financial stress in the Katerra Group
2020: Financial stress in the Katerra Group
In the first quarter of 2020 the Katerra Sellers defaulted on financial covenants in the RPA. GL entered into a First Standstill and Forbearance Agreement with the Katerra Sellers on 30 March 2020.
The liabilities held by the Katerra Group, including those under the RPA, meant that the Katerra Group found it difficult to obtain bonding finance for new project starts. This impeded the Katerra Group’s ability to secure new business.
On 1 June 2020 GL entered into a Second Standstill and Forbearance Agreement with the Katerra Sellers.
- Heading
- INTRODUCTION
- The claimants
- The defendants
- The Greensill Group and supply chain funding
- The SCF Funds
- The securitised funding arrangements
- The SoftBank Defendants’ relationships with the Greensill Group
- The Credit Enhancement Programme
- The Katerra Group companies
- The SoftBank Defendants’ investments in the Katerra Group companies
- 2019 discussions about revisions to the Credit Enhancement Programme
- The Fairymead Note Programme
- December 2019: further discussions about the CEP
- The issue of notes under the Fairymead Note Programme
- 2020: Financial stress in the Katerra Group
- SVF1 invested further in Katerra
- Katerra identified improper revenue recognition
- Appointment of new management and restructuring advisors
- Developments concerning the Greensill Group in 2020
- CSAM reduced concentration limits on Greensill Group investments
- GCPL planned a capital raise and Initial Public Offering
- Drafts of the $440 million CLN and the Omnibus Deed
- The 10 November 2020 agreements
- The $440m CLN
- The Omnibus Deed
- The SBIA Undertaking
- Use of the $440 million proceeds of the CLN
- Further developments in November 2020 concerning the Katerra Group
- SVF1’s bridge loan to the Katerra Group
- SVF1’s, SVF2’s and the Greensill Group’s approvals following the withdrawal of the New Money Consortium
- Documenting the agreements
- Signing of the CEA and TA and placing them in escrow
- Further agreements executed in December 2020
- The CEA
- The TA
- Further investments in Katerra Cayman by SVF1
- The Preferred Share Purchase Agreement
- The SVF Habitat Share Subscription
- The Vision Funds’ stake in the Katerra Group
- November to December 2020: developments concerning the Fairymead Note Programme
- December 2020 – March 2021: Financial position of the Greensill Group
- Discussions between Greensill and CSAM in December 2020 about exposure limits
- The 31 Dec/14 Jan Fairymead Trade – “the Secondary Trade”
- Publicity about the restructuring of the Katerra Group’s debts
- The cancellation of the Secondary Trade
- March – June 2021: Default on the Fairymead Notes and bankruptcy of the Greensill Group and Katerra Group
- WITNESSES
- FINDINGS ON CONTESTED FACTUAL AND EXPERT ISSUES
- SECTION 423 OF THE INSOLVENCY ACT 1986
- DETERMINATION OF THE ELEMENTS OF THE CLAIM
- Conclusions