Re Avanti Communications Ltd (In Administration) (2023): fixed or floating charge – a spectrum of control?

This briefing considers the recent case of Re Avanti Communications Ltd [2023] EWHC 940 (Ch) in which the English Court considered what was required to characterise a fixed charge, rather than a floating charge and the degree of control necessary to have a fixed charge. This is the first judgment discussing this distinction since the House of Lords’ (now the Supreme Court) judgment in Re Spectrum Plus [2005] UKHL 41.

The court held that a charge granted by Avanti Communications Limited (“Avanti”) over its HYLAS-3 satellite, network and ground stations, orbital slots, licences and other related assets (the “Relevant Assets”) was properly characterised as a fixed charge even though there were limited permissions for Avanti to deal with the Relevant Assets.

It also held that to have a fixed charge did not mean there needed to be a total prohibition on all dealings in relation to the Relevant Assets. Existing case law did not support this analysis and instead required a nuanced approach to be taken to the question of whether a charge was a fixed or floating charge, with a number of factors to be taken into account.

Whilst only a first instance judgment, this decision will be welcomed by lenders taking fixed charge security as the bar for the level of contractual and actual control has been lowered below where some commentators had previously set it meaning more security documents will be likely to be considered as having fixed charges.

Please click here to read the briefing.