FL-2022-000014 - [2025] EWHC 2631 (Ch)

On 12 November 2020 Greensill entered into a Third Standstill and Forbearance Agreement with the Katerra Sellers.

Later in November 2020 the New Money Consortium withdrew. On 18 November 2020 Mr Housenbold emailed Mr Misra, Mr Romeih and others stating:

“Not good news - Just off the phone with the new money consortium and a subsequent board meeting. The new investors did a typical private equity play and dramatically changed the deal for the worse. Management plus Kirkland & Ellis + Alvarez & Marsal + my team are going to take the next 24 hours to identify the options, conduct a cost/benefit analysis and then I will make a recommendation”.

On 22 November 2020 Mr Romeih advised the other limited partners in SVF1 (the Kingdom of Saudi Arabia’s Public Investment Fund (“PIF”), and the Emirate of Abu Dhabi’s Mubadala) that the “new money consortium has fallen through” but that SBIA had an alternative solution which it would share “ASAP” on a Zoom call organised for 1.00 pm that day.

SBIA’s Mr Hatim Sukhla summarised the proposed amended deal structure in his email of 22 November 2020:

“Two days ago the new investor consortium walked away from the contemplated transaction (as a reminder they had committed a $180M investment alongside SVF1’s $200M that was approved by IC on Nov. 5th).

…

The new deal structure we are contemplating is largely identical to the original deal, except with SVF2 investing $180M instead of the new investor consortium, alongside SVF1’s $200M.”

Mr Sukhla noted that “we … will imminently require new functional approvals, IAB consent and IC approvals” for the planned investment.

On 21 November 2020 Mr Cheung sent an email to Mr Misra, Mr Romeih, Mr Fan and others updating them on the proposed investment by SVF2, and indicating that discussions had taken place with Mr Greensill regarding an equity contribution from GCPL to “sweeten the deal”.

On 23 November 2020 Mr Greensill and Mr Romeih of SBIA exchanged a series of WhatsApp messages. Mr Greensill stated that “Tom Cheung indicated that Masa [Son] and Rajeev [Misra] have reached agreement”. They arranged a Zoom call to discuss. Mr Greensill asked: “Saleh, are we approved to engage with Katerra re a 100% write off? Their legal team is chasing us?”. Mr Romeih replied: “No. Not yet. Let me revert please.”

On the same day Mr Romeih had discussions on WhatsApp with Mr Faisal Rehman of SBIA. Mr Romeih asked Mr Rehman, “How do you see the Greensill structure?”. Mr Rehman replied:

“Amend original CLN Only amendment is to add more warrants (from the 180m new deal). No other change. That gets executed between V2 and G.

K&G enter into a separate debt settlement deed which effectively settles G 's claim over K @ 40c in full and final settlement of the $440m.

K and V1 and K and V2 enter into two separate shareholder agreements / subscription agreements for 200m and 180m respective and for 51% and 34% ownership respectively.

V1 and V2 Fund K and K gives 176 to G and G gives 176 to V2.

At G’s end, they take the 440 originally given to them by V2 to buy out the note from CS fund at par.

All of the above will occur contemporaneously.”

Notes of a “Senior group call” on 27 November 2020 included, “SVF 2 buy note from Greensill, then between SVF 2 and K to handle forgiveness of warrant for 5%”.

A spreadsheet disclosed by the SBDs dated 25 November 2020 referred to a “change in structure” and stated:

“concern with fraudulent conveyance – can claw stuff back from greensill; did you benefit greensill vs all other lenders

when we put in 380

and take 175 out of K and into G

if K goes bk

under US regulations, bankruptcy court can go back 2 years

SVF1 invest 200 into K

SVF 2 invest nothing into K

SVF 2 just amends CLN to wipe out 176

in exchange for that greensill issues 54505

kept 2 transactions separate

left with problem, SVF 2 now not getting equity in K

effectively all warrants in svf 2

if greensill is forgiving loan

if svf 2 is forgiving loan

why not svf 2 buyout k loan via greensill from CS fund outright

then forgives loan from K

then gets equity from K

without putting money into K

if clawback just that of equity”.

It was common ground that the risk referred to concerned the potential application of clawback provisions under US bankruptcy law in the event of a bankruptcy of the Katerra Group.

Mr Wheeler of SBIA set out the proposed revised steps in an email of 29 November 2020 to Mr Greensill, Mr Lane and Ms Edwards of the Greensill Group:

“· CLN Amendment. Greensill agrees to amend existing US$440M convertible loan note (CLN) with SVF II to increase the number of shares into which the CLN is convertible into. The amended CLN will be convertible into an aggregate of [141.218] F class shares.

· Cancellation of Obligation to Repay $176m SVF II agrees to cancel Greensill's obligation to repay US$176M of any proceeds acquired from the Katerra facility [i.e. the RPA].

· Cancellation of Katerra Facility Greensill agrees to forgive and terminate existing US$440M existing loan facility with Katerra.

· Issuance and Transfer of Katerra Warrants. Katerra agrees to issue to Greensill, warrants exercisable for a number of shares equal to 5% of the fully-diluted ownership in Katerra and Greensill agrees to transfer such warrants to SVF II.”

Mr Lane replied to Mr Wheeler by email on the same day:

“All of that fits with our previous understanding of the deal, save the last Katerra equity issuance which we only leaned about on yesterday’s call.

I don’t think we have any objection in principle of this pass through of the 5%, but clearly we need to get our external counsel engaged to understand fraudulent conveyance risk and also our finance/tax team to assess for accounting/tax hair.”

The proposed further equity acquisitions in the Katerra Group required approval under the U.S. Hart-Scott-Rodino Antitrust Improvements Act (known as “the HSR Act”, or “HSR Approval”).