Ellendale Resources NL, in the matter of Ellendale Resources NL
[2008] FCA 530
•8 April 2008
FEDERAL COURT OF AUSTRALIA
Ellendale Resources NL, in the matter of Ellendale Resources NL
[2008] FCA 530CORPORATIONS LAW – orders under s 411(1) Corporations Act 2001 (Cth) to convene meetings of members and option holders to consider proposed scheme of arrangement – proposed scheme at the preliminary stage appears fair and reasonable.
Corporations Act2001 (Cth), ss 411, 412.
IN THE MATTER OF ELLENDALE RESOURCES NL (ACN 061 836 708)
ELLENDALE RESOURCES NL (ACN 061 836 708)WAD37 OF 2008
GILMOUR J
8 APRIL 2008
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD37 OF 2008
IN THE MATTER OF ELLENDALE RESOURCES NL
(ACN 061 836 708)ELLENDALE RESOURCES NL
(ACN 061 836 708)
PlaintiffJUDGE:
GILMOUR J
DATE OF ORDER:
8 APRIL 2008
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Leave be given to the applicant to convene a meeting (“Shareholders Meeting”) of each person registered as a holder of ordinary shares issued by the applicant (“Shareholder”) as at 10.30 am (WST) 13 May 2008 (“Relevant Time”) for the purpose of considering and, if thought fit, approving (with or without amendment) the proposed scheme of arrangement (“Proposed Share Scheme”) which is Appendix 2 of the Explanatory Statement, being annexure DMM-6 to the affidavit of David Maxwell McArthur sworn 25 February 2008 (“Explanatory Statement”), such meeting to be held on 15 May 2008 at 10.00 am (EST) at Level 2, 90 William Street, Melbourne, Victoria.
2.Leave be given to the applicant to convene a meeting (“Optionholders Meeting”) of each person registered as a holder of an option issued by the applicant exercisable at $0.20 each on or before 31 May 2012 (“Optionholder”) as at the Relevant Time for the purpose of considering and, if thought fit, approving (with or without amendment) the proposed scheme of arrangement which is Appendix 3 of the Explanatory Statement (“Proposed Option Scheme”), such meeting to be held on 15 May 2008 at 10.30 am (EST) (or as soon as possible after the conclusion of the Shareholders Meeting) at Level 2, 90 William Street, Melbourne, Victoria.
3.The Shareholders Meeting be convened, held and conducted:
(a)in accordance with the provisions of Part 2G.2 of the Corporations Act 2001 (Cth) (Act) that apply to members of a company and the provisions of the applicant’s Constitution that are not inconsistent therewith and that apply to meetings of members; and
(b)to the extent applicable, in accordance with Corporations Regulations 5.6.12 to 5.6.36A.
4. The Optionholders Meeting be convened, held and conducted:
(a)in accordance with the provisions of Part 2G.2 of the Act that apply to members of a company and the provisions of the applicant’s Constitution that are not inconsistent therewith and that apply to meetings of creditors;
(b)on the basis that a quorum for the purpose of the Optionholders Meeting shall be 2 Optionholders, present in person or by proxy or attorney and otherwise as if such Optionholders were a separate class of members;
(c)on the basis that each Option shall carry one vote by person, proxy or attorney; and
(d)to the extent applicable, in accordance with Corporations Regulations 5.6.12 to 5.6.36A.
5.That Mr Mark Edward Elliott, or failing him, Mr Mark Gregory Kerr, be appointed to act as Chairman of the Shareholders Meeting and of the Optionholders Meeting.
6.That Mr Mark Edward Elliott, or failing him, Mr Mark Gregory Kerr, is to report the results of the Shareholders Meeting and of the Optionholders Meeting to this Honourable Court.
7.The Explanatory Statement amended in the manner referred to in Appendix “A” hereto, being an explanatory statement required by s 412(1)(a) of the Act, be and is hereby approved (subject to any minor amendments required or approved by ASIC for the purposes of registration thereof under s 412(6) of the Act) which contains:
(a)a letter from the chairman of the applicant;
(b)an overview of the Schemes (Section 1);
(c)a summary of the key features of the Schemes (Section 2);
(d)an outline of the reasons for the Scheme (Section 3);
(e)details of the implementation of the Schemes (Section 4);
(f)considerations for scheme participants (Section 5);
(g)background information on the applicant (Section 6);
(h)background information on Hawthorn Resources Ltd (Section 7);
(i)risks associated with the Schemes (Section 8);
(j)taxation information for scheme participants (Section 9);
(k)additional information on the Schemes (Section 10);
(l)the merger implementation agreement entered between the applicant and Hawthorn Resources Ltd (Appendix 1)
(m)the scheme of arrangement to be made between the applicant and its members (Appendix 2);
(n)the scheme of arrangement to be made between the applicant and its optionholders (Appendix 3);
(o)a deed poll entered into by Great Gold Mines NL (which has since changed its name and status to Hawthorn Resources Ltd) (Appendix 4);
(p)notice of the Shareholders Meeting and Optionholders Meeting and the relevant proxy forms (Appendix 5 and Appendix 6 respectively); and
(q)an independent expert’s report prepared by DMR Corporate Pty Ltd (Appendix 7).
8.The applicant shall dispatch the Explanatory Statement to the Shareholders and Optionholders whose address is in the register maintained by Computershare Investor Services Pty Limited as at 10.30 am (WST) on 13 April 2008 within Australia by ordinary pre-paid post on or before 15 April 2008.
9.The attached notice (for the purpose of this order marked “B”) be inserted in the public notices column of “The Australian”, “The West Australian” and “The Courier-Mail”, such advertisements to be published on or before 16 April 2008.
10.The attached notice (for the purpose of this order marked “C”) be inserted in the public notices column of “The Australian”, “The West Australian” and “The Courier-Mail”, such advertisements to be published on or before 16 April 2008.
11.The attached notice (for the purpose of this order marked “D”) be inserted in the public notices column of “The Australian”, “The West Australian” and “The Courier-Mail”, such advertisements to be published on or before 16 May 2008.
12.Subject to approval of the Proposed Share Scheme and the Proposed Option Scheme convened under Orders 1 and 2 above, leave is granted to make an application for orders under Sub-sections 411(4) and (6) of the Act following the Shareholders Meeting and the Optionholders Meeting, on 23 May 2008 for approval of the Share Scheme and the Option Scheme.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD37 OF 2008
IN THE MATTER OF ELLENDALE RESOURCES NL
(ACN 061 836 708)ELLENDALE RESOURCES NL (ACN 061 836 708)
Plaintiff
JUDGE:
GILMOUR J
DATE:
8 APRIL 2008
PLACE:
PERTH
REASONS FOR JUDGMENT
On 8 April 2008 I gave ex tempore oral reasons for making an order under s 411(1) of the Corporations Act 2001 (Cth) (“the Act”). The following sets out those reasons subject only to grammatical and other editing but not such as to alter the substance.
Ellendale Resources NL seeks an order under s 411(1) of the Act for the convening of meetings of its members and option holders for the purpose of considering the proposed scheme of arrangement. The objective of the proposed scheme is to effect a merger between Ellendale Resources and Hawthorn Resources Limited, formerly known as Great Goldmines NL. If, in due course, the proposed scheme is approved, Ellendale will become a wholly owned subsidiary of Hawthorn Resources. I am satisfied that the statutory requirements under both ss 411 and 412 of the Act have been satisfied.
The Explanatory Statement is assisted by the contents of Appendix A to the applicant’s written outline of submissions. This contains, in schedule form, the relevant Corporations Act requirements and related compliance with those requirements. The Court has a supervisory role in relation to such applications. I am satisfied to the requisite degree at this stage of the proceeding, that the proposed merger appears both fair and reasonable and is one which the relevant shareholders and option holders might well approve in a general meeting. That, of course, is no more than a provisional view. I note, however, that it has the support of the directors of both Ellendale and Hawthorn Resources. It is supported by an independent expert’s report which describes the proposed scheme as fair and reasonable, as well as being in the best interests of both the share and option holders.
The position of ASIC is relevantly contained in a letter from it, dated 7 April 2008, to the solicitors for the applicant. ASIC advises that it does not currently propose to appear to make submissions or intervene to oppose the schemes at the first hearing. I note this to be expressly stated to be the position of ASIC upon the current information provided to it by the applicant to date in relation to whether the schemes have been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6 of the Act. It also notes that ASIC’s position may change if it considers it appropriate to do so. Consistent with that statement in its letter, ASIC has not appeared this morning and there is no present change in the position evident in the terms of the letter.
I am satisfied that ASIC has had a reasonable opportunity to examine the terms of the proposed scheme. Indeed, it was by reason of ASIC’s requirements, for a number of amendments to the Explanatory Statement, which occasioned two prior adjournments to the application for convening the meetings which has been heard today. So far as particular provisions of the scheme are concerned, and in particular, I am referring to the merger implementation agreement, I do not consider the exclusivity provision in clause 12 to be any barrier to making the orders sought. The period of restraint is not unreasonable; it lasts only until approximately late May 2008. This provides a period reasonably required for the implementation of the proposed merger.
I do not consider the ‘Competing Transaction’ carve-out to be unreasonable in the circumstances. The break-fee is within a reasonable range, being just over half a percent of the aggregate of the values of the shares and options. Finally, the vast majority of shareholders and option holders reside on the eastern seaboard of Australia with more than 50% of the shareholders and more than 70% of the option holders resident in Victoria. In those circumstances, it is appropriate for the meetings to be held in Melbourne.
For these reasons, I am persuaded that the orders sought in the minute of proposed orders dated 7 April 2008, as amended in the course of discussions with Mr Young, appearing as counsel for the applicant, are appropriate orders to be made. Accordingly, there will be orders in those terms.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate:
Dated: 18 April 2008
Counsel for the Plaintiff: Mr J G Young Solicitor for the Plaintiff: Steinepreis Paganin
Date of Hearing: 8 April 2008 Date of Judgment: 8 April 2008
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