AG in $525 Million Restructuring

December 21, 2022

Cleary Gottlieb represented the ad hoc group of bondholders (the Ad-Hoc Group) in connection with the restructuring of approximately $525 million aggregate principal amount of two series of bonds issued by a subsidiary of Andrade Guttierez Engenharia S.A. (AG), a Brazilian multinational real estate development and public project conglomerate.

The restructuring consisted of two transactions. In the first transaction, AG launched (i) a consent solicitation requesting bondholders to, among other things, authorize AG to retain a portion of the proceeds of the sale of AG’s stake in CCR S.A., a company with interests in multiple transportation concessions in Brazil and other countries, whose stake was part of the collateral of the bonds due 2024, and (ii) a tender offer for cash whereby AG used the remaining proceeds from such sale to repurchase at par 2024 bonds from tendering holders. Following such tender offer, the aggregate principal amount of the 2024 bonds was reduced from $480 million to $315 million.

The second transaction consisted of an extrajudicial reorganization proceeding in Brazil (EJ) pursuant to which AG invited the holders of the remaining 2024 bonds, as well as holders of bonds due 2021 in an aggregate principal amount of $44 million, to exchange such bonds for either 2029 senior secured bonds or 2040 secured bonds. Following bondholder participation in excess of 94% and approval of the EJ plan by Brazilian courts (confirmed in the U.S. pursuant to Chapter 15 of the Bankruptcy Code), AG settled the restructuring on December 21, 2022.

The success of the restructuring was greatly in part due to the support of the Ad-Hoc Group, which had entered into a support agreement with the Company pursuant to which, in addition to committing to support the restructuring, the members of the group agreed to provide financing in an amount equal to any funds not allowed to be retained by the Company pursuant to the tender offer. These amounts are necessary for the continued operations and growth of the Company.