Allen & Gledhill

The Singaporean firm acted for lenders in the cross-border restructuring of Southeast Asia’s largest shipping liner

History of the practice

Established well over a century ago, Allen & Gledhill prides itself on being one of Singapore’s oldest firms. The 12-member insolvency division, integrated within the firm’s international arbitration and litigation practices, is a key player on the city-state’s restructuring scene, with decades of experience in cross-border cases spanning the Association of South East Asian Nations region.

The practice is currently headed by Chong Yee Leong, alongside Andrew Yeo who took over from Edwin Tong SC when he joined Singapore’s government as Senior Minister of State for Law in 2018. (Yeo is now co-head of the litigation and dispute resolution department). Other prominent partners include Andrew Chan, and Edward Tiong, who is deputy head of the practice.

Allen & Gledhill partners are also longstanding and active members of various insolvency institutions, including the Insolvency Practitioners Association of Singapore, the Law Society’s insolvency committee and the Turnaround Management Association of Singapore.

Network

Allen & Gledhill is based in Singapore, where all its full-time restructuring and insolvency lawyers are grounded. It also has regional offices in Myanmar and Vietnam, as well as an  association with Malaysian firm Rahmat Lim & Partners, which launched in 2010 and whose litigation department tackles Malaysian restructuring matters. In Indonesia, the firm works in association with Soemadipradja & Taher.

Who uses it?

Allen & Gledhill’s books show a spread across several industries, with a fairly even split between creditor and debtor-side work. Clients in the energy sector include Singapore’s Berau Coal Energy and its subsidiary Berau Capital Resources, as well as offshore oil and gas company Ezra Holdings.

The firm has also risen to the challenge of managing pressures in the shipping industry, guiding the liquidators of Singaporean shipping companies Parakou and Glory Wealth, and the financiers of Indonesia’s Berlian Laju, through various stages of insolvency proceedings and several instances of knock-on litigation. It also acted for a committee of lenders in the cross-border restructuring of global shipping group Pacific International Lines.

Historic track record

Alongside the significant Berau and Ezra restructurings, the firm acted on the cross-border collapse of Eastman Kodak Company and was counsel to the financial adviser of Singaporean asset manager TT International. In the aftermath of Barings Bank’s collapse in the 1990s, Chong acted for the judicial managers, inspectors and liquidators of Singaporean entity Barings Futures.

More recently, Allen & Gledhill secured a victory for the receivers and managers of petrochemical plant operator Jurong Aromatics in the restructuring of US$2.5 billion worth of debt. In 2017, the Singapore High Court ruled that creditors Glencore and BP could not withhold US$56 million in payments as an insolvency set-off for debts that the company had incurred pre-receivership. The court also made clear that the appointment of receivers did not constitute a ceding of control by senior lenders.

The firm won a ruling that cheered third-party funders in Singapore on behalf of bankrupt businessman Fan Kow Hin’s estate, which sought sanction of a litigation funding arrangement. The court allowed the arrangement in a 2018 decision, rejecting arguments that Singapore’s recent legalisation of the practice for international arbitration had impliedly barred it for other areas.

It also acted for Noble Group, a Bermuda-incorporated commodities trader formerly listed in Singapore, on a US$3.5 billion restructuring in 2018. It defended the company against shareholder actions and claims relating to forum mandatory laws, which threatened to derail the restructuring. The company carried out parallel schemes in England and Bermuda, alongside a Chapter 15 filing, before completing its restructuring through a Bermudian provisional liquidation.

In another cross-border case playing out in Singapore, Malaysia, Brunei and India, the firm represented a series of lenders and Islamic trust certificate holders in the restructuring of oil and gas group Swiber Holdings, which included the first known sukuk default in Singapore.

Recent events

Jo Tay, who has credits on the China Fishery and Berau Capital restructurings, was promoted to the firm’s partnership on 1 January 2021.

Top cases of the research period

The firm has been providing ongoing counsel to various lenders and asset purchases on the controversial restructuring of water treatment company Hyflux. The long-running US$1.7 billion restructuring proved difficult to complete, due to the collapse of initial deals with Indonesian white knight investor SM Investments and UAE investor Utico, and the company was placed into liquidation in July 2021.

Leong, Tiong and partner Fay Fong also led a multi-disciplinary team acting for a steering committee of lenders in the US$3.74 billion cross-border restructuring of Southeast Asia’s largest shipping liner, Pacific International Lines. The company secured a unique scheme of arrangement in March 2021, which it negotiated outside Singapore’s typical moratorium process to avoid a Hanjin-style blowout.

During the research period, the firm has continued to act for noteholders objecting to a proposed scheme of arrangement in the US$950 million Berau Group restructuring. The Singapore courts, including the Court of Appeal, have sided with the firm’s objections in four rounds of restructuring proceedings and delivered important decisions on novel issues such as  financial disclosure in schemes of arrangement. A fifth round of proceedings is currently ongoing.

Partners including William Ong, Corina Song and Daniel Liang are advising various creditors, including HL Bank Singapore, in the US$1 billion restructuring of commodity trader Agritrade International. The company’s applications for moratorium protection from creditors were rejected in February 2020 and it was placed into judicial management the following month. Its affiliate, Hong Kong-listed Agritrade Resources, was put into provisional liquidation in Bermuda in June 2020.

In another big case in 2020, it advised London-based satellite company OneWeb Global on Singapore law aspects of its US Chapter 11 restructuring. The company and 18 affiliates sought bankruptcy protection in New York in March 2018, listing debts of about US$2.1 billion. Allen & Gledhill partner Kenneth Lim advised the company on its debtor-in-possession financing and other Singapore-law insolvency issues that arose in connection with the Chapter 11 proceeding. Its restructuring plan was approved by the New York court in October 2020, leading to the sale of the business to an international consortium including the UK government.