Waldorf Production UK Plc, Re (Convening Hearing)

MR JUSTICE MICHAEL GREEN:

1. This is the Convening Hearing in respect of a proposed restructuring plan under Part 26A of the Companies Act 2006 in respect of the “Plan Company”, Waldorf Production UK plc, an oil and gas company and part of a Group that has assets principally consisting of interests in North Sea oil fields.

2. Unusually, this is the second plan put forward by the Plan Company in less than a year. The first plan was refused sanction by Hildyard J in a judgment handed down on 19 August 2025 and reported at [2025] EWHC 2297 (Ch) . He refused sanction on the grounds broadly that the Plan Company had not shown that it was fair and just, in particular in the way it treated the unsecured creditors, one of which was HMRC.

3. Hildyard J was bound by the very recent Court of Appeal decisions in Kington S.A.R.L, Thames Water and another v Thames Water Utilities Holding and others (Re Thames Water) [2025] EWCA Civ 475 and Saipem S.P.A. & Ors v Petrofac Ltd & Anor (Re Petrofac) [2025] EWCA Civ 821 and the apparent change of tack in relation to the “out of the money” creditors. It was because the Court of Appeal would similarly be bound by those decisions that Hildyard J granted a leapfrog certificate to the Plan Company to appeal his decision direct to the Supreme Court. The Supreme Court then granted permission to appeal on 9 October 2025.

4. However, in the meantime the Waldorf group (the “Group”), of which the Plan Company is part, received a non-binding offer from Harbour Energy plc (“Harbour”) to acquire certain parts of the Group for $205 million less what is called “leakage” that had accrued on and from 1 January 2025.

5. This second plan (the “Plan”) is designed to facilitate the sale to Harbour and to effect the release of certain claims against the Plan Company, but on the basis of a higher return being received by creditors than they would receive in the “Relevant Alternative”, which the Plan Company says would be a disastrous formal insolvency of various parts of the Group. It is also relevant to note that the return is designed to be greater than in the first plan to the creditors which opposed it.

6. The Group (including the Plan Company) has been negotiating with all its creditors, although HMRC refused to participate in a mediation that was part of the negotiating process. Those negotiations resulted in an agreement with all of the material secured and unsecured creditors of the Group (other than HMRC) and, on 11 December 2025, those creditors entered into a lock-up agreement confirming their support for the agreed compromise of their claims, the proposed acquisition by Harbour and the proposed Plan.

7. Harbour has entered into a sale and purchase agreement (“SPA”) but it is of course conditional on, inter alia, the sanction of this proposed Plan and also a parallel restructuring in Scotland of a Scottish member of the Group.

8. As a result of these commitments, the Plan Company withdrew its appeal in relation to the first restructuring plan from the Supreme Court, and it now focuses its attention on this second proposed Plan, which requires sanction under the conditions precedent of the SPA by 30 April 2026. That long-stop date is extended by reference to the sanction of the Scottish restructuring plan but for our purposes here in England the Plan Company says that this matter needs to be dealt with and decided by 30 April 2026.

9. I am pleased say that not much is actually in issue now at this Convening Hearing. I have had the benefit of written and oral submissions from Mr Daniel Bayfield KC leading Ms Charlotte Cooke for the Plan Company, Mr Matthew Abraham on behalf of the supporting secured creditors, who are in the form of the “Bond Trustee” and “SteerCo,” a group of certain bondholders (approximately 84% of them), and from Mr Stefan Ramel and Mr Samuel Parsons on behalf of HMRC.

10. As is well known, the Convening Hearing is emphatically not the time to consider the merits or fairness of the Plan - that is for the Sanction Hearing. But before turning to the issues that are before me, I should briefly explain the Plan.

11. I have read the evidence filed by the Plan Company, together with the Practice Statement Letter. It seems to me that the Plan Company has fully complied with the new Practice Statement for Schemes and Plans under Part 26 and Part 26A of the Companies Act 2006 , issued by the Chancellor on 18 September 2025, and coming into force on 1 January 2026. In particular, it has enabled constructive engagement by the Plan Company with its creditors and, even more importantly, with the court, to sort out a reasonable and fair way of dealing with this matter, taking account of the urgency of it but also the available court resources. The fact that the parties have ended up being not very far apart this morning indicates the benefit of that openness and engagement, and I am grateful to them for that.

12. The background to the first plan has been exhaustively set out in a number of documents and it is unnecessary for me to deal with it at all. I rely in particular on the history set out by Hildyard J in sections A to G of his sanction judgment and I will use the same terminology as in that judgment and which has been used by the parties in their evidence and skeleton arguments.

13. There is no dispute that the Group has faced serious financial difficulties in recent times, and with the failure of the first restructuring plan these have become more acute. The Plan Company is the parent of Waldorf Production North Sea Limited and Waldorf Real Estate Limited (“WREL”) and is itself a subsidiary of WEPL and WPL, both of which companies are in administration and have been since June 2024.

14. The Plan Company’s principal liabilities remain the same since the first plan and they are: (1) the Original Bonds and the Super Senior Bonds (together, the “Bonds”), the secured creditors of the Plan Company, which together comprise an outstanding amount of some $117.2 million; (2) the “M&A Creditor”, which is an unsecured creditor arising from a settlement agreement as a result of an earlier purchase by the Group. The amount outstanding to the M&A Creditor is some $29.5 million. This creditor opposed the first restructuring but is now supportive of the new Plan and has agreed a compromise of its claim. (3) The third plan creditor is HMRC, which is owed some $72.3 million arising from the Plan Company’s tax liabilities under the Energy (Oil and Gas) Profits Levy Act 2022 (“EPL”). As I have said, HMRC opposed the first plan and continues to oppose this Plan and refused to participate in the negotiations leading up to it.

15. There are also other unsecured liabilities of the Plan Company but they are not part of the Plan as they are considered essential for the future operation of the Company and the Group and so will be paid in full.

16. Under the first plan, the Unsecured Plan Creditors were to be extinguished in full in exchange for a cash payment of 5% of the amount outstanding. Hildyard J considered that this was unfair and did not give them enough of the restructuring benefit. Under the new Plan the consideration to be received from Harbour will be used to pay off the Plan Company’s compromised liabilities, leading to an extinguishment and release from those liabilities. By the approved methodology, that would mean that the unsecured creditors, i.e., the M&A Creditor and HMRC, would receive some 14.1% of their claims. The Original Bondholders will receive 63.1% of their debt and the Super Senior Bondholders, 41.5%. However the latter, if the Plan is approved, will also recover some $34.7 million from other Group entities which will mean, if that occurs, that they will actually recover their claims in full.

17. As I have said, the Relevant Alternative put forward by the Plan Company is an insolvency process in which the unsecured creditors would only have received the prescribed part, which the Plan Company estimates would amount to 0.1% of the value of their claims.

18. In answer to this, HMRC say that the “no worse off” test will not be satisfied because, if the Plan goes ahead and is sanctioned, there will be substantial tax losses available to the wider group to be acquired by Harbour that could be used by Harbour to reduce its tax liabilities by as much as $929 million. HMRC will argue that these need to be brought into account when considering the benefits of the restructuring as compared to the Relevant Alternative. The point is also relevant to discretion and, together with the special position of HMRC that it will argue exists, HMRC will say that it is necessary to look at the overall returns to the Exchequer in both scenarios.

19. Anyway, it is clear that these arguments, which go both to jurisdiction and discretion, are not to be considered by me today, save that it is necessary to recognise the nature of the opposition that will be made at the Sanction Hearing. Mr Bayfield gave what I think I can describe as some preliminary answers to the novel points that have been raised by HMRC in its paragraph 20 document and skeleton argument. As I have said, it is unnecessary for me to consider those at this stage, but I note that these are substantial and novel points and they were not really raised at the Sanction Hearing before Hildyard J, and they will need to be considered obviously at the Sanction stage of this Plan.

20. For today’s purposes, there are no jurisdictional points being taken; nor is it suggested that there are any roadblocks to sanction being granted, that is, no points that provide a fatal blow to the Plan going ahead. Mr Bayfield did take me to a couple of points that may be said to be potential roadblocks. They were arguments in relation to the international recognition and enforcement of the Plan, in particular in Norway which is the law governing the Bonds. Norwegian law expert evidence has been filed on behalf of the Plan Company and that suggests that the release of the Bonds by the Plan will be effective under Norwegian law and enforceable in the Norwegian courts.

21. It does seem to me that there are no roadblocks in the way of the Plan moving forward towards a Sanction Hearing. Of course, the court will not act in vain, but nobody is taking any of those points now.

22. I am therefore satisfied at this stage that this court has jurisdiction to consider the Plan. The Plan Company is an English company and is entitled to take advantage of the Part 26A provisions. Also, conditions A and B as set out in section 901 A of the Companies Act 2006 are quite clearly met in relation to this Plan and I am therefore satisfied that it is appropriate for the matter to continue.

23. Mr Bayfield also took me to the provisions in relation to notice, the procedural requirements for that being set out in certain authorities. It is clear that the notice that was given to all the creditors, and by that I include all the underlying beneficial owners of the Bonds, on 24 December 2025 when the announcement was published to Stamdata and the clearing system. I am satisfied that that notice is sufficient for the purposes of this Convening Hearing.

24. One of the main matters that is normally considered at a Convening Hearing is class composition, but again in relation to this, I am in the fortunate position that the Plan Company has accepted HMRC’s proposal that it should be in a separate class from the other unsecured creditor. It has therefore been agreed between the parties, and I am satisfied that it is appropriate to direct, that there be four separate class meetings to consider and vote on the Plan. Those separate four classes are: (1) the Super Senior Bondholders; (2) the Original Bondholders; (3) the M&A Creditor; and (4) HMRC. The first two are obviously the secured creditors and quite clearly need to be separated from the unsecured creditors. As between the two secured creditors they are being treated slightly differently in terms of whether they get additional credit support from other companies in the Group, and whether they get lower or higher dividends under the agreed compromise in the Plan, as I have said. So it does seem to me to make sense, although it probably makes little difference in the end, for them to be separated.

25. In relation to the unsecured creditors, the separation will also make no difference really to the outcome because everyone knows exactly which way the two unsecured creditors are going to vote. Mr Bayfield took me to an authority that suggested that the court takes a pragmatic approach to class composition and where it has been agreed between the relevant parties before the court, then it makes sense to go with that to avoid any unnecessary argument and expenditure of costs in relation thereto. HMRC will be in a separate class meeting to the M&A Creditor, but even if they had been in the same class meeting, HMRC with a far greater debt, would have been able to outvote the M&A Creditor and that combined class would have dissented from the Plan.

26. That is class composition and the only other item for me to consider at this stage, given that I have decided that this should proceed to the class meetings and a Sanction Hearing, is the timetable and directions towards that Sanction Hearing.

27. Ms Cooke took me through a draft order that has been helpfully agreed between the parties and that seems to make perfect sense to me, with the meetings due to take place on 11 March 2026 by webinar, with the usual directions being given in relation to the conduct of those meetings. In relation to the Sanction Hearing, the parties have found a slot from the Listing Office that is different to what was originally proposed and it is now agreed that it should go in the diary, in fact my diary, for the week of 13 April 2026, with 13 April being a pre-reading day for me and the hearing to start on 14 April 2026, to last with a time estimate of three to four days, I think we should say, so that hopefully we can get it done in three days but, if necessary, we can spill over to Friday 17 April 2026. [Post judgment note: in fact the Court has directed pre-reading on 14 April 2026 and the hearing to be held over 3 days from 15 to 17 April 2026.]

28. The directions leading up to that are contained in the draft order and provide for expert evidence to be filed on behalf of all parties, but in particular on behalf of HMRC, and for the other parties to be able to respond to that. There is to be a joint meeting of experts for a without prejudice discussion hopefully towards the end of March, and for a joint statement, if possible, to be agreed and put before the court by those experts on 2 April 2026.

29. All the other directions are agreed as I have said, together with the timings. And I will make that Order in the terms sought. - - - - - - - - - - - -