CR-2025-005763 and CR-2025-005674 - [2025] EWHC 2318 (Ch)

The MidCo Scheme affects indebtedness (“MidCo Scheme Debt”) under:

The MidCo Scheme Debt is governed by common terms and a common security package. The PP Notes and the MidCo Facility Agreement rank pari passu. Cross guarantees are given by various members of the MidCo Group of obligations under both constituents of the MidCo Scheme Debt. The PP Notes and the MidCo Facility Agreement represent the totality of the external financial debt of the MidCo Group. The MidCo Scheme Company’s evidence is that some £269 million of the MidCo Scheme Debt falls due for payment in November 2025 and the MidCo Scheme Company lacks the funds to make that payment.

The PP Notes represent some 88 per cent by nominal value of the MidCo Scheme Debt, with the MidCo Facility Agreement representing some 12 per cent.

The proposal is to amend and extend the terms of the MidCo Scheme Debt. The debt is amended by altering the interest rate to 5 per cent and making some other changes to covenants. The extension is achieved by extending the maturity to 2030 with a possible further extension to 2031. The MidCo Facility Agreement currently carries interest at or around 8.5 per cent and the PP Notes carry interest at a variety of different rates. Therefore, the reduction of the interest rate to 5 per cent represents a reduction for all holders of the MidCo Scheme Debt, but some holders will suffer a greater magnitude of reduction than others. The MidCo Scheme also provides that that interest on MidCo Scheme Debt, as reduced, will not be paid in cash but rather by the issue of payment-in-kind notes.

The MidCo Scheme Company is the guarantor but not the primary obligor under the MidCo Facility Agreement. Therefore, the MidCo Scheme relies on a similar deed of contribution mechanism to that that I explained in relation to the SWS Scheme. A deed of contribution is entered into that makes the MidCo Scheme Company joint principal obligor in relation to the MidCo Facility Agreement, with that being done in order to offer the prospect that the MidCo Scheme can modify obligations owed by BorrowerCo as well as obligations owed by the MidCo Scheme Company itself.

There have been ongoing discussions with holders of the MidCo Scheme Debt. All of the holders of the PP Notes have agreed to the amend and extend provisions in relation to their notes which the Sponsor requires. CBA has not agreed.

There has been a lock-up agreement under which those in favour of the MidCo Scheme agree to vote in favour of it. However, although it was originally envisaged that MidCo Scheme Creditors who signed up to the lock-up agreement would receive a fee, the position has moved on. MidCo Scheme Creditors signing up to the lock-up agreement (including those who signed up when the lock-up agreement provided for a fee) will receive and retain no fee for doing so. The MidCo Group has, however, agreed to reimburse expenses of their professional advisors that MidCo Scheme Creditors incur in connection with their accession to the lock-up agreement.