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Implications of the National Security and Investment Act 2021 for distressed deals

The National Security and Investment Act 2021 (the Act) came into force on 4 January 2022 and is expected to have significant consequences in the distressed environment, particularly in relation to the enforcement of security and the appointment of insolvency officeholders.
The Act requires prior notification of certain events to the Government and once notification has been made, parties will need to await clearance before taking further steps. This will have implications for the speed at which creditors can take enforcement action and must be provided for in any contingency planning. The Act will also have an impact on origination of financing and the taking of security (and therefore also on refinancings).