8 September 2023 Energy and Infrastructure - Restructuring and Insolvency

Linklaters advises on the first major restructuring and recapitalisation of an offshore wind farm in Taiwan

Linklaters have advised Yunneng Wind Power Co. Ltd (“Yunlin”) on the comprehensive restructuring of its c.€2.9bn financial debt and recapitalisation.

The Yunlin project is located in the Taiwan Strait and will comprise 80 wind turbine generators with a total capacity of 640 MW rated power. It’s one of the largest wind farms in Taiwan. The project has suffered from significant time and cost overruns during construction and Yunlin has needed to adapt rapidly by implementing changes to the technical delivery of the project (including significant changes to project documentation) while in parallel reaching accommodation with investors and with the Taiwanese government.

In summary, the transaction involved:

  • implementation of multiple interim liquidity funding arrangements;
  • re-tranching and amendment to the terms of the 17 existing debt facilities into senior, mid-tier and subordinated debt facilities;
  • raising new equity from sponsors;
  • raising c.€ 500m of committed new super senior debt from a sub-set of the existing lenders and ECAs; and
  • the reorganisation of the project’s equity and governance arrangements.

The transaction has been implemented by way of an English law restructuring plan pursuant to Part 26A of the Companies Act 2006 (the “RP”). The RP had five classes of creditors and is the first time that a RP (or any English law restructuring process) has been used to affect a restructuring of a Taiwanese company.

The transaction involved complicated intercreditor negotiations, the “elevation” of certain existing exposures to the extent the lenders participated in new money, engagement with multiple European export credit agencies and negotiations on the waterfall for respective cashflow interests.

The transaction provides a stable platform for Yunlin to complete the project and achieve commercial operations.

Linklaters was able to implement this highly novel transaction through the close collaboration of its leading Energy & Infrastructure and Restructuring & Insolvency teams. The seamless combination of Linklaters’ sector experience and the restructuring capability facilitated the delivery of this challenging and novel transaction. The transaction will likely serve as playbook for other potential restructurings in this sector.

The Linklaters team was led by Stephen Le Vesconte (Partner, Energy & Infrastructure, Paris) and partners Sarah Mook and James Warboys (both Restructuring & Insolvency, London).

The wider team included managing associates Noor Ashraf and Kwaku Osei, associates Clarissa Wei and Stella Kiggundu (all Energy & Infrastructure, London), partner Sabine Vorwerk (Restructuring & Insolvency, Frankfurt), managing associates Max Krasner and Jayne O’Connell, associates Hannah Barrett Brown, Jovana Olson, Amy Kidd and Hilaire Wong (all Restructuring & Insolvency, London), partner Rory Conway, managing associate Greg Wloch and associate Slavena Byrne (all Litigation, Arbitration & Investigations, London), partner Thomas Schulz (Corporate, Berlin), partner Dan Schuster-Woldan, managing associate Monique Fraser (both Corporate, London), managing associate Johannes Gottwald (Banking, Frankfurt), partners Sam Lintonbon and James Morgan and associate Ed Tozer (all Tax, London).

The legal counsel to the Lenders and ECAs was White & Case.