Australia: Nexus Energy Limited - Update on Debt-For-Equity Restructures of Listed Companies

In our article “Mirabela Nickel Restructuring - An Australian First” in the Q3 2014 issue of Global Insight, we considered the cutting-edge case of Mirabela Nickel Ltd [2014] NSWSC 836 (Mirabela) which was the first example of the court approving a debt-for-equity swap of an externally administered listed company, despite the absence of shareholder approval. The issue has been considered further in the recent case of Nexus Energy Limited [2014] NSWSC 1910 (Nexus). In this case, the court confirmed the approach in Mirabela and provided more detail about conditions under which it will permit a debt-for-equity swap without shareholder approval. The case provides further clarity as to when the court will exercise its power and demonstrates the flexibility of the Australian insolvency regime to effect complex and novel restructures for the benefit of all of the relevant stakeholders. Read more