DHC Capital advises iflix Pte Ltd on the first “pre-pack” scheme of arrangement under IRDA

DHC Capital acted as lead financial advisor and scheme manager to iflix Pte Ltd on the first “pre-packaged” scheme of arrangement in Singapore under Section 71 of the Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) (“IRDA”).

iflix Pte Ltd is a subscription video on demand service focused on emerging markets. The key assets of iflix Pte Ltd and other iflix Group entities were acquired by Chinese tech giant, Tencent Holdings Ltd (HK: 700) in a transaction completed in June 2020 (click here for DHC Capital’s involvement on the sale).

The iflix Group used a “pre-packaged” scheme of arrangement mechanism in Singapore with a parallel corporate voluntary arrangement in Malaysia to implement the post-sale restructuring and distribution to creditors. The scheme in Singapore was approved by the Court on 14 January 2021. The corporate voluntary arrangement in Malaysia was approved by creditors on 23 December 2020.

A “pre-packaged” scheme of arrangement under Section 71 of IRDA allows the Court, upon an application by the company, to make an order approving a creditor scheme of arrangement even though no meeting of creditors (or class thereof) has been ordered or held. The “pre-packaged” scheme process effectively shortens the scheme process by allowing the applicant company to dispense with both the Court hearing to convene a meeting of creditors and the meeting itself where it can be demonstrated that there is strong creditor support for the scheme.

David Chew, DHC Capital Partner, said “We are delighted to be involved in this ground breaking “pre-pack” scheme of arrangement. This transaction demonstrates the tools available in Singapore for distressed companies to fast-track pre-negotiated schemes, saving time and cost and preserving value for creditors that would otherwise be lost in drawn out negotiations.”