Norton Rose Fulbright advises bank on Brazilian oil and gas group’s successful debt restructuring

A cross-border team from global law firm Norton Rose Fulbright advised Banco Bradesco during the complex US$1.67 billion debt restructuring of Constellation Oil Services Holding that closed successfully in December.

The restructuring of Constellation, a leading oil and gas drilling services group in Brazil, brings to a close one of the country's largest and most complicated bankruptcy filings.

Norton Rose Fulbright advised Banco Bradesco on its US$150 million working capital facility unsecured claim.

The bankruptcy filing by Constellation, formerly known as QGOG Constellation, in December 2018 was pre-arranged and supported by a majority of the group's secured and unsecured creditors. Ancillary proceedings related to Constellation's Brazil case were filed in the US and the British Virgin Islands.

Even though Constellation's restructuring enjoyed majority creditor consent, several legal challenges were raised by a holdout creditor, which resulted in hotly contested  litigation in all three jurisdictions.  

Under the terms of Constellation's restructuring plan, the group's stakeholders, including Banco Bradesco, put up more than US$100 million in new money at closing, including a rights offering subscribed by existing bondholders and a capital injection from its shareholders. With this new money, Constellation has the necessary capital and stability to operate its rigs and seek new bids.

Norton Rose Fulbright helped to negotiate the terms of a funding commitment made available by supporting creditors in order to provide liquidity certainty to the company until the court-supervised sale of certain Floating Production Storage and Offloading (FPSO) assets could be completed.

Andrew Rosenblatt (New York) and Michael McCourt (Sao Paulo) led the Norton Rose Fulbright team, which included James A. Copeland (New York) and Diego Brandão (Sao Paulo).