CR-2025-001156 - [2025] EWHC 2129 (Ch)

This judgment follows the trial and sanction hearing (Sanction Hearing) of the Claimant’s Part 8 claim for orders pursuant to s.901F in Part 26A of the Companies Act 2006 (Act) sanctioning the terms of a proposed restructuring plan (Plan).

The Claimant, Madagascar Oil Limited (MOL), is registered in Mauritius as an “Authorised Company”. It is the 99.8% shareholder of Madagascar Oil S.A. (MOSA). MOL’s principal assets comprise its shares in MOSA and the amounts due to it from MOSA under certain intercompany loans.

MOL’s immediate parent company is BMK Resources Ltd (BMK), a Cayman Islands incorporated company. BMK owns 100% of the shares in MOL. BMK also owns the remaining 0.2% of shares in MOSA. MOL is therefore the intermediate holding company in this group of companies (Group).

MOSA is the trading entity within the Group. It is a Madagascar registered and headquartered company. In 2004, MOSA entered into a Production Sharing Agreement (PSA) with Office des Mines Nationales et des Industries Stratégiques, the Madagascan Government’s natural resources agency (OMNIS), to explore and develop a large onshore oilfield at Block 3104, Tsimiroro, Madagascar (Oilfield).

US Holdings Limited (USH), a Bermudian company (formerly owned as to 82.6% by BMK) once stood in BMK’s position in the former Group. BMK now occupies that position following sanction on 2 April 2024 by the Bermudian court of BMK’s purchase of MOL’s shares.

During the period of its former tenure, USH entered into a Facility Agreement originally dated 29 September 2015, successively amended until its final amendment and restatement on 7 September 2021 (Facility). The only remaining debt investors in the former Group by that stage were BMK and Outrider Master Fund LP (Outrider), a Cayman Islands company, now in voluntary liquidation.

The Facility had been guaranteed by MOL and MOSA up to the sum of US$80m under an Amended and Restated Guarantee, also dated 7 September 2021 in its latest iteration, in favour of Outrider and BMK (Guarantee).

The stated purpose of the Plan is, in broad terms, to restructure the indebtedness of MOL and MOSA under the Guarantee and on an intercompany basis and to enable the injection of funds to restart production at the Oilfield which has not produced oil since 2016. The Plan creditors are BMK and Outrider.

The Practice Statement Letter for the Plan was circulated to BMK and Outrider on 20 February 2025.

On 2 April 2025, the convening hearing took place before Mellor J who convened separate meetings of two classes of creditors, one comprising BMK alone, the other Outrider alone. Mellor J also ordered grounds of objection to be filed and listed a case management conference to determine those grounds which would be permitted to be taken (CMC).

Plan meeting notices were sent to BMK and Outrider on 4 April 2025.

At the CMC on 2 May 2025, Meade J limited the eight grounds of objection advanced by Outrider to those concerning:-

international effectiveness (Ground 2);

the relevant alternative to the Plan (RA) (Ground 5);