The English High Court has sanctioned Smile Telecom Holding Limited's (Smile) restructuring plan, despite there being no parallel restructuring proceedings in Mauritius, the place of Smile's incorporation.
At the convening hearing, the court held that all creditors, other than the super senior facility creditor, were 'out of the money' and therefore could not vote on the plan. A senior creditor raised objections and offered an alternative valuation report but did not attend the sanction hearing.
- A creditor who opposes a restructuring plan must 'stop shouting from the spectator's seats' and attend court to make its arguments. Despite a company's duty to bring all relevant matters to the attention of the court, it is not obliged to comment on an alternative valuation report that has not been put in front of the court by the dissenting creditor. The court also does not have to consider the report of its own accord.
- Smile had a sufficient connection with England to justify the court sanctioning its restructuring plan which would alter the constitution and share capital of a Mauritian company. There is no strict legal requirement for there to be a parallel scheme in Mauritius.
- The court found that, based on expert evidence from local counsel, the plan would be effective in Mauritius and in the countries where other senior creditors were based.
- Creditors who oppose a restructuring plan should attend the court hearing otherwise their alternative solutions are unlikely to be considered.
- An English court can approve a plan where there is no parallel plan in the company's country of incorporation.