Bondholders and DIP Lenders in Recently Approved OGX Restructuring Plan

June 5, 2014

Cleary Gottlieb is representing an ad hoc group of bondholders and debtor-in-possession (DIP) lenders of Óleo e Gás Participações S.A., formerly known as OGX, in the recently announced approval of OGX’s restructuring plan.

On Tuesday, June 3, 2014, the requisite majority creditors voted to overwhelmingly approve a restructuring plan for OGX and its affiliates, including, at the operating company, votes in favor by creditors holding over 90% of the amount and 80% in number of claims that voted. Cleary Gottlieb has been actively involved in all aspects of the restructuring. The plan, which provides OGX with the means and stability necessary to maintain and develop its assets, is now subject to confirmation by the bankruptcy judge, which is expected shortly.

The ad hoc group of bondholders represents the majority of financial creditors, and includes major financial and investment institutions in the U.S., UK, and Latin America. OGX’s bankruptcy filing last year was Latin America’s largest ever. It involves an operational as well as balance sheet restructuring, implemented through a judicial reorganization proceeding (recuperação judicial) under Brazilian Bankruptcy Law. The reorganization is the largest debt for equity restructuring in Latin American history and one of the few examples of such a transaction. In connection with the restructuring, Cleary Gottlieb negotiated the first example of DIP financing involving international creditors in a Brazilian restructuring and standby underwriting of new capital.

Founded in 2007, OGX was the largest private sector company in Brazil’s oil and natural gas exploration and production sector.