Impact Deal of the Year: Stoneway Capital restructuring

Recognitions - September 27, 2023

We are proud to announce that we have received the “Impact Deal of the Year” recognition from ITR Americas Tax Awards 2023 for the acquisition of Stoneway by SCC Power as part of an international debt restructuring plan.

Congratulations to all the teams involved!

About the transaction

On May 17, 2022, SCC Power Plc (“SCC Power”) announced that, together with related entities, it has acquired the business enterprise of Stoneway Capital Corporation (“Stoneway”), consisting of four power generation facilities located in Argentina with an aggregate installed capacity of 737 MW.

In 2017, Stoneway, a corporation incorporated under the laws of New Brunswick, Canada, issued $ 665,000,000 off its 10.000% Senior Secured Notes due 2027 (the “Existing Notes”), the proceeds of which were used to pay engineering, procurement, construction and development costs relating to four power generation plants located in the cities of Matheu, Zarate, Lujan and San Pedro, in Buenos Aires, Argentina. During 2020, certain lenders of a U.S.$168,000,000 mezzanine loan executed their collateral, taking control of Stoneway.

In February 2022, as a result of certain defaults under the Existing Notes, Stoneway and certain related entities filed a debt restructuring plan under Chapter 11 of the U.S. Bankruptcy Code and under the Canada Business Corporations Act, which became effective on May 17, 2022.

The restructuring transaction and acquisition of the Stoneway business by SCC Power was carried out as part of such restructuring plan. As consideration for the assets, SCC Power issued to certain creditors and interest holders U.S.$17,861,000 6.000% Secured First Lien Notes due 2028, U.S.$310,000,000 8.000% Secured Second Lien Notes due 2028 and U.S.$200,000,000 4.000% Secured Third Lien Notes due 2032. The first interest payment under the notes is due on September 15, 2022.

SCC Power is a public limited company organized under the laws of England and Wales, wholly controlled by Stoneway Custody Statutory Trust, whose sole ultimate beneficial owner is MSU Energy Holding Ltd. MSU Energy Holding is also the controlling company of MSU Energy S.A., a corporation (sociedad anónima) incorporated in Argentina, which owns and operates state-of-the-art combined cycle plants with an aggregate installed capacity of 750M, two located in the province of Buenos Aires and one in the province of Córdoba.

External Counsels to SCC Power Plc.

Tavarone, Rovelli, Salim & Miani through its Banking team led by partners Federico Miguel Salim and Francisco Molina Portela, together with associates Agustín Bilbao and Rocío Valdez; its Corporate team led by partner Juan Pablo Bove, together with associates Teodoro Rodriguez Caceres, Esteban Bujan, Francisco Steffano and Clara Cifuentes; its Anti-Trust team led by partner Julian Razumny, together with associate Paula Cerizola; and its Energy team led by partner Nicolás Eliaschev, and associates Eugenia Muñoz, Tomás Villaflor and Luciana Tapia.

Simpson Thacher & Bartlett LLP through its Corporate – Latin America team led by Juan M. Naveira, S. Todd Crider, Amy Beller, Joshua Bernard, Antonio Ribichini and Mónica Yrrarazabal; its Restructuring team led by Nicholas Baker, Michael Torkin and Ashley Gherlone; its Corporate – London team led by Clare Gaskell, Matthew Hope, Carlo Pia and Conor Davis; and its Tax team led by Yash Rupal, Michael Mann and Caleb McConnell.

In addition, Maples and Calder, McCarthy Tétrault LLP and Stewart McKelvey advised SCC Power Plc.

External Counsels to the Ad-Hoc Committee of Creditors of the Original Debt Securities.

Bruchou & Funes de Rioja through its Banking & Capital Markets team led by partner José María Bazán, together with associates Ramón Augusto Poliche, Manuel Etchevehere and Josefina Mortola Saiach; its Tax team led by partners Libán Angel Kusa, Daniela Rey and Ezequiel Lipovetzky, together with associates Pablo Martín Muir and Atenas Caramuto; its Competition & Antitrust Law team led by partner Gabriel Lozano and associates Dolores Cedrone and Sofia Benegas Lynch; its Litigation, International Arbitration & Bankruptcy team led by partner Martin Beretervide; its Public Law team led by partner Ignacio Minorini Lima and associates María Laura Rozán and Manuel Mazza; and its Companies Law & Corporate Governance team led by partners María Lucila Winschel and María Florencia Angelico, together with associates Youssef El Chaer and Lucía Perondi Nuñez.

Cleary Gottlieb Steen & Hamilton LLP through its Latin América, Bankruptcy & Restructuring and M&A teams led by partners Richard J. Cooper, Adam Brenneman, Luke A. Barefoot and Polina Lyadnovam, together with associates Philip Herbst, Byamba Enkhbayar, Jack Massey, Natalia Rezai, Rebecca Prager, Benjamin Wertkin, Soyoung Yang y Ariel Zhou.

In addition, Osler, Hoskin & Harcourt LLP (Canada) through its Insolvency and Restructuring team led by partners Martino Cavalruso, Marc Wasserman and Kathryn Esaw, and its Litigation team led by partners Jeremy Dacks and Shawn Irving. Conyers Dill & Pearman (BVI) through its team led by partner Robert Briant.

External Counsels to Stoneway.

Bomchil through its team led by partners Fermín Caride (Banking), Tomás Araya (Restructuring) and Alejandro Messineo (Tax), together with associates Victoria Tuculet, Emir Faita and Benjamín Anaya.

In addition, Stoneway was advised by Shearman & Sterling LLP through its team led by partner Fred Sosnik, together with associates Jordan Wishnew, William Holste and Alex Babcock, Bennett Jones LLP (Canada) through its team led by partners Thomas Bauer, Phillip Ward and Michael Shakra, and Carey Olsen (BVI).

External Counsels to the Onshore Trustee.

Marval O’Farrell & Mairal advised TMF Trust Company (Argentina) S.A. as Onshore Trustee through its team led by partners Roberto E. Silva (h) and Martín Campbell, together with associates Martín Iván Lanus (currently working as a foreign associate in the United States) and Pablo Lapiduz.

Paul Hastings LLP, through its team led by partners Michael L. Fitzgerald, Arturo Carrillo and Pedro A. Jimenez, together with associate Leah López.

External Counsels to the lenders under the mezzanine loan.

Dechert LLP through its team led by partner Solomon Noh, together with associates Stephen Wolpert, Eric Hilmo and Tayyibah Arif. Goodmans LLP (Canada) through its team led by partners Francesca Guolo and Brendan O’Neill, and Walkers (BVI) through its team led by partner Patrick Ormond. Bomchil (Argentina) advised the lenders prior to Stoneway’s filing in Chapter 11 through its team led by partners Fermín Caride (Banking), Tomás Araya (Restructuring) and Máximo J. Bomchil (Corporate).

External Counsels to UMB Bank, N.A.

Perkins Coie advised UMB Bank, N.A. as trustee under the Debt Securities Issuance Indenture through its team led by partner Tina N. Moss (Bankruptcy and Restructuring), and associates Ronald T. Sarubbi and Lincoln Finkenberg (Financial Transactions) and counsel Paul Jasper.

In addition, Borden Ladner Gervais LLP advised UMB Bank, N.A. through its team led by partners Roger Jaipargas (Insolvency and Restructuring) and Manoj Pundit (Financial Transactions).PAGBAM through its Banking & Capital Markets team led by partner Alan Arntsen and associate Bárbara Santori; its Insolvency and Restructuring team led by partner Lautaro D. Ferro and counselor Nicolás E. Del Hoyo; and its Anti-Trust team led by partner Luis D. Barry.