Latham & Watkins Advises on Successful Restructuring of Naviera Armas

Latham & Watkins has advised the committee of senior secured noteholders in relation to the successful completion of the recently announced restructuring of the financial indebtedness of the Naviera Armas group, a leading passenger and freight ferry operator headquartered in the Canary Islands.

The complex cross-border transaction is one of the first to make use of the new Spanish restructuring framework incorporated into the Spanish Insolvency Act in September 2022, implementing the European Preventive Restructuring Directive. It follows the successful completion of a first restructuring in January 2022.

The restructuring plan, which resulted in a substantial de-leveraging of the Group’s balance sheet and the transfer of ownership of the Group to the noteholders, involved a cross-class cram-down of the Group’s unsecured financial debt while adhering to the absolute priority rule. The power of cross-class cram-down is one of the new tools now available under the new Spanish restructuring regime. This approach ensured that the interests of all stakeholders were considered, and that the restructuring was conducted in, a fair and equitable manner.

Significantly, the effects of the plan have been extended to include the Group’s Luxembourg guarantors; this is one of the first instances where Spanish courts have issued orders with extraterritorial effect to support a restructuring plan. This decision underscores the adaptability and reach of the new Spanish restructuring procedure and sets a further precedent for future cross-border restructurings.

Latham & Watkins’ lead role advising the noteholder committee through each phase of restructuring highlights the firm’s expertise in navigating challenging and complex legal and commercial issues on a coordinated cross-jurisdictional and cross-practice basis to deliver innovative, client focused solutions.

The Latham team was led by London restructuring and special situations partners Yen Sum and David Wallace and Madrid partner Pedro de Rojas and counsel Luis Sánchez, with London associates Jack Isaacs and Ben Russell, and Madrid associates Carmen Alonso and Victoria Morales. Advice was provided on banking matters by London partner Fergus O’Domhnaill, with associates Chris Devine and Darius Leong; on capital markets matters by London partners James Burnett and Manoj Tulsiani, with associates Rosie Wu and Alexander Kartyshev; on litigation matters by Madrid partner Óscar Franco; on tax matters by Madrid partner Jordi Domínguez, with associate Juan Rodríguez; on regulatory matters by Madrid partner José María Alonso; and on antitrust matters by Madrid partner José María Jimenez.