Rechtbank Amsterdam, 13-05-2020, ECLI:NL:RBAMS:2020:2681, NCC 20/016 (C/13/683640)

IHC Merwede is the operational top holding company of the IHC Group. The Group produces ships and equipment and delivers services to the dredging and offshore industries globally. A valuable subsidiary of the Group is IHC IQIP B.V. (IQIP). IQIP offers equipment and services for renewables, oil and gas, and construction. Approximately 2,400 out of the 3,200 total number of employees of the IHC Group are employed in the Netherlands.

All outstanding shares in the Company are held by respondent sub 2: IHC B.V. IHC B.V. is a shareholder vehicle, the ordinary shares in which are held by four shareholders (the Shareholders):

( a) Parkland N.V.;

( b) Noordland N.V.;

( c) Rabo Capital II B.V.; and

( d) Stichting Administratiekantoor Management en Personeel IHC.

Parkland et al hold approximately 70% of the shares in IHC B.V.

Funding for the IHC Group is provided inter alia on the basis of a senior facility agreement with several lenders and ING Bank N.V. as the Senior Agent, and of a junior facility agreement with several lenders and NIBC Bank N.V. as the Junior Agent (and together with the Senior Agent, the Agents). The lenders under these facility agreements (Facilities Agreements) together are referred to as the Lenders.

IHC Merwede experienced financial and other setbacks starting in 2015. As part of a financial restructuring in August 2019, IHC B.V. granted a first right of pledge over the shares in the Company (the Share Pledge). The Share Pledge provides security for payment of a guarantee included in the Share Pledge. IHC B.V., under this guarantee, guaranteed punctual performance of the obligations under the Facilities Agreements of the members of the IHC Group that are a party to these documents. Recourse under the guarantee is limited to the pledged shares in the Company. Article 15 of the Share Pledge provides:

After August 2019, the IHC Group has experienced further setbacks. The Group has incurred additional costs on a number of major projects. A number of major projects were delayed, leading to delayed incoming cash flows. Furthermore, customers are increasingly demanding prefunding of projects by the IHC Group, increasing its working capital requirements. As a result of these elements combined, the Company is in need of € 250 million additional funding to ensure its continuity for the upcoming period.

The Company concluded that, as the Shareholders were not willing to invest substantially, the only future for the IHC Group as a whole lay in a solution with the following three central elements. First, a new strategic investor would need to commit itself to the IHC Group to restore trust in the Group among its customers in the market. Second, this investor would need to make a significant equity contribution. Third, the Lenders would need to agree to a substantial write-off of their outstanding loans.

To find the necessary strategic investor, IHC Merwede engaged the financial advisory firm Lazard. The Lenders at a later stage also appointed Rothschild & Co as their financial advisor as part of this M&A process. Both Lazard and Rothschild have approached a number of potential investors about investing in the IHC Group.

In the course of the M&A process, a group of industry partners affiliated with major customers of the IHC Group in the Benelux (the Industry Consortium) showed a serious interest in investing in the IHC Group.

At the request of the Company and the Lenders, Duff & Phelps made an assessment of the going concern value and of the liquidation value of the Company and the Group as of 31 December 2019 (the D&P Report). The D&P Report was issued on 19 March 2020.

On 30 April 2020, the Lenders and the Industry Consortium with the support of Atradius DSB, the Dutch State and the Company reached an agreement. The deal involves (in broad strokes):

- transfer of the shares in the Company (the Shares) and of € 195 million of existing debt for an amount of 1 Euro (and the subsequent conversion of that debt into equity in the Company);

- an equity contribution by the Dutch State in an amount of € 40 million subsequently to be taken over by the Industry Consortium in an amount of € 30 million and the Lenders by providing an additional € 10 million financing to the Company;

- an equity contribution by Coöperatieve Rabobank U.A. in an amount of € 30 million;

- additional funding provided by the Lenders in a total amount of € 340 million (and an additional € 10 million as set out above); and

- financial support in the form of counterguarantees, working capital cover and GO cover by Atradius DSB and the Dutch State (through the Rijksdienst voor Ondernemend Nederland) in an amount of up to € 300 million.

As part of this agreement, the shares in either IHC B.V. or IHC Merwede are to be transferred to Stichting Continuïteit. The Shareholders and the Industry Consortium did not come to an agreement on the transfer of the shares in IHC B.V.

On 3 April 2020, the Agents sent a default notice to the Company. At the same time, IHC B.V. was also notified of the outstanding defaults. By notices dated 4 May 2020 the Lenders declared the entire outstanding amount under the Facilities Agreements and the guarantee immediately due and payable. The amount drawn under the Facilities Agreements is € 387,300,000 and the total amount of outstanding guarantees thereunder is approximately € 750 million. All these amounts are currently due and payable (together with accrued interest and costs).

On 4 May 2020, Glas reached an agreement with Stichting Continuïteit on the private sale (the Proposed Sale or the SPA) as follows:

( a) acquisition of the Shares by Stichting Continuïteit (with Glas acting as seller);

( b) disposal of part of the claims against the Company under the Facilities Agreements to Stichting Continuïteit; and

( c) a consideration to consist of:

The Dutch State, the Industry Consortium, the Lenders and Atradius DSB have agreed to make their funding and other financial support available once the Shares have been transferred to Stichting Continuïteit.