Restructuring of the Diebold Group
Loyens & Loeff has been acting as Dutch counsel to an ad hoc group of financial creditors (Ad Hoc Group) of Diebold Nixdorf, Incorporated and certain of its subsidiaries (the Diebold Group), among which Diebold Nixdorf Dutch Holding B.V.
In the beginning of 2023, it became clear that a restructuring was unavoidable in order to ensure the financial stability of the Diebold Group. Subsequently, the Diebold Group entered into extensive discussions with the Ad Hoc Group. Following these discussions, it became clear that a Chapter 11 procedure in the United States (US Plan) in parallel with a Dutch WHOA procedure (WHOA Plan) was necessary to provide the Diebold Group with the much-needed stable platform.
As a result of the restructuring, the total indebtedness of the Diebold Group will decrease drastically with approximately USD 2.1 billion. The balance sheets of the Diebold Group will improve substantially given that (i) the Diebold Group obtained a USD 1.25 billion DIP Facility to fully repay its most senior debt and to supplement its working capital, (ii) the DIP Facility will be converted into an Exit Facility upon completion of the restructuring and (iii) a large portion of the subsequent senior debt will be converted into newly issued shares in Diebold Nixdorf, Incorporated by means of a debt-for-equity swap.
Milestone for the Dutch WHOA
The WHOA Plan and the US Plan are inextricably linked. Sanctioning of one is expressly included as a contractual condition for implementation of the other, and vice versa. On 12 July 2023 the US Bankruptcy Court approved the US Plan and recognized the WHOA procedure as a ‘foreign main proceeding’ under the Chapter 15 procedure. Following the sanctioning of the WHOA Plan on 2 August 2023 by the Dutch court, the Diebold Group sought recognition thereof in the United States, which was granted by the US Bankruptcy Court on 7 August 2023 as part of the Chapter 15 procedure. As a result, the effects of the Dutch WHOA will also apply in the United States. A milestone, as – to our knowledge – this is the first time the Dutch WHOA is recognized in the United States.
Added value Loyens & Loeff
Together with Davis Polk & Wardwell LLP, Loyens & Loeff provided legal counsel to the Ad Hoc Group, drawing on our extensive expertise in handling intricate cross-border restructurings involving complex group structures and intra-group dynamics.