ECIJA leads the restructuring that allows Transbiaga to avoid insolvency proceedings

The Transbiaga group, a Basque family company dedicated to the transport of special cargo and the assembly of wind farms, has avoided bankruptcy proceedings. The Commercial Court No. 1 of San Sebastián has approved the third restructuring plan presented by the group in three years. The solution for the survival of the company includes a reduction of debt of approximately 36.5 million euros and the conversion of 10 million euros into a participating loan maturing in 2036.

The ruling, delivered on March 5, dismisses the objections raised by various financial entities —including Santander, CaixaBank, BBVA, Sabadell, Abanca, and Deutsche Bank—, as well as by Nordex, one of the main manufacturers of wind turbines for the Acciona group, which has been Transbiaga's main client until now. The ruling is final, as there is no right to appeal.

The Transbiaga case is highly complex, as it is the third restructuring plan proposed by the group in the last three years. In November 2023, the same court approved an initial plan that was supported by Nordex, "which committed to make financial contributions and commercial improvements to contribute to the company's viability," says Alberto Sanjuán, partner at ECIJA who co-led the operation.

However, after this initial commitment to revive the company, the relationship with Nordex deteriorated, leading to various legal claims and forcing a second plan that the court ultimately rejected, arguing that the commercial breakdown severely compromised the viability of the business. "In a scenario where insolvency proceedings seemed inevitable, Transbiaga managed to rebuild its customer portfolio, now without Nordex, and stabilize its activity," says Héctor Verde, partner in the same department at ECIJA, who also coordinated the operation. Last year (in May), the third restructuring plan was presented, backed by a new investor, "who will provide funding to settle part of the existing debt and offer the company new lines of working capital and financing for investments," he says.

The court has approved this plan, which includes, among other measures, a new repayment schedule for certain privileged loans, mainly related to the rental of industrial machinery, as well as a 50% reduction in ordinary loans and a 100% reduction in subordinated loans, representing a reduction of liabilities of about 36.5 million euros, of which about 25 million correspond to financial institutions.

"The approval of this plan demonstrates the possibilities offered by the new Spanish restructuring framework to preserve viable companies. The key to these processes is to rigorously analyze the company's situation and design a balanced financial solution that allows adjusting the debt to its actual capacity to generate value, thereby ensuring the continuity of the business project," says Alberto Sanjuán.

Viability

One of the key factors that has allowed Transbiaga to avoid bankruptcy is that, according to the judge, the plan offers a "reasonable prospect of viability" for the company. "It is based on coherent assumptions, proportional measures, and a reasonable structure of sacrifices," he states in his ruling. The financial entities argued, on the other hand, that the refusal to approve the previous plan condemned the future viability of the business group because it was "res judicata." However, the judge responded that "each plan constitutes an autonomous legal reality" with respect to which the structural viability of the company with debts must be assessed. Thus, "an unfavorable ruling on a previous plan does not, by itself, prevent the approval of a subsequent plan when it incorporates substantial modifications," he concluded.

The judge dismantled the debtors' distrust towards the financing mechanisms of the plan. Specifically, those of the fintech company Rubicon and of General Finance, which specializes in factoring. "The lack of traditional banking nature does not make the financing illusory. In situations of credit restriction, it is legally legitimate and economically coherent to resort to alternative formulas," he clarifies. "The allegation that the plan is based on 'mere intentions' does not meet the required threshold of proof," adds the judge, who considers the statements of the directors of the financial entities conclusive.

Alternative 'Test'

Similarly, the court concludes that bankruptcy would not be a better alternative for creditors, as it considers that liquidation would generate a return lower than that envisaged in the restructuring plan. Both the banks and Nordex argued that the plan did not pass the test of the creditors' superior interest, as it imposed a sacrifice greater than the "value that could reasonably be obtained in an insolvency scenario," particularly through the "liquidation or transfer of the productive unit." This is a test provided in the directive that harmonizes insolvency laws in the EU (Directive 2019/1023), which acts as a "material limit to the continuation of dissenting classes." The simulation provided by creditors, who bear the burden of proof, suggested that liquidation would allow for a recovery approximately 16.3% higher than that envisioned in the plan. However, the expert's opinion holds that the sale of the production unit would not be possible and that the most likely scenario would be a separate liquidation of assets, "in which common creditors would obtain no recovery."

Finally, the ruling endorses both the continuation of the partners' participation in the company —justified by the financial contributions committed for a value of 2 million euros— and the differentiated treatment of loans guaranteed by the ICO, admitting that these may be affected by provisions for non-payment and validating the distinction between the guaranteed and non-guaranteed tranches for the purpose of their conversion into participating loans.

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