Endocoal Limited, in the matter of Endocoal Limited (No 2)

[2013] FCA 412

FEDERAL COURT OF AUSTRALIA

Endocoal Limited, in the matter of Endocoal Limited (No 2) [2013] FCA 412

Citation:		Endocoal Limited, in the matter of Endocoal Limited (No 2) [2013] FCA 412
Parties:		ENDOCOAL LIMITED (ACN 132 183 281)
File number:		NSD 2085 of 2012
Judge:		YATES J
Date of judgment:		9 May 2013
Catchwords:		CORPORATIONS -  scheme of arrangement – second hearing - approval
Legislation:		Corporations Act 2001 (Cth)
Cases cited:		Endocoal Limited, in the matter of Endocoal Limited [2013] FCA 58
Date of hearing:	8 March, 19 April 2013
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	10
Counsel for the Plaintiff:	Mr M Oakes SC
Solicitor for the Plaintiff:	Gilbert + Tobin
Solicitor for U & D Mining Industry (Australia) Pty Ltd	Minter Ellison

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 2085 of 2012

IN THE MATTER OF ENDOCOAL LIMITED (ACN 132 183 281)

ENDOCOAL LIMITED (ACN 132 183 281)
Plaintiff

JUDGE:	YATES J
DATE OF ORDER:	19 APRIL 2013
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the scheme of arrangement between Endocoal Limited (ACN 132 183 281) (Endocoal) and the holders of fully paid ordinary shares in Endocoal, in the form of Exhibit 2 in the proceeding, be approved.

2.The plaintiff lodge with the Australian Securities and Investments Commission a copy of the approved scheme of arrangement at the time of lodging a copy of these orders.

3.Pursuant to s 411(2) of the Act, the requirements of s 411(11) of the Act be dispensed with.

4.These orders be entered forthwith.  

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 2085 of 2012

IN THE MATTER OF ENDOCOAL LIMITED (ACN 132 183 281)

ENDOCOAL LIMITED (ACN 132 183 281)
Plaintiff

JUDGE:	YATES J
DATE:	9 MAY 2013
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 25 January 2013, I made an order pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) providing for the convening of a meeting of all shareholders in the plaintiff (Endocoal) for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between Endocoal and the scheme shareholders.  My reasons for making those orders are contained in Endocoal Limited, in the matter of Endocoal Limited [2013] FCA 58. I will adopt the same abbreviations in these reasons.

2. The meeting was held and agreement to the proposed scheme (hereafter, the scheme) was obtained by the requisite majorities.

3. On 19 April 2013, I made an order (amongst other orders) approving the scheme.  These are my reasons.

4. On the evidence before me, I was satisfied that all procedural requirements had been satisfied for the granting of approval.  In particular, I was satisfied of the following matters:

   (a)The explanatory statement represented by the scheme booklet was registered with ASIC on 29 January 2013.

   (b)The scheme meeting was duly convened under s 411(1) of the Act to be held on 28 February 2013 by sending notice of the scheme meeting by prepaid post to the scheme shareholders on 30 January 2013.

   (c)The explanatory statement was sent with that notice in compliance with s 412(1)(a) of the Act.

   (d)The notice of meeting, the explanatory statement, and a proxy form were contained within the scheme booklet.  Save for minor amendments not affecting its substance, the scheme booklet corresponded with Exhibit 1.

   (e)Phillip James McCarthy acted as Chairman of the scheme meeting, as required by Order 2(a) made on 25 January 2013. At the scheme meeting the scheme shareholders passed a resolution in favour of the scheme. The votes cast at that meeting in person and by proxy satisfied the requirements of s 411(4)(a)(ii) of the Act.

   (f)Notice of the hearing seeking the Court’s approval of the scheme was advertised, as required by Order 3 made on 25 January 2013.  Following a short hearing on 8 March 2013, the hearing seeking approval was adjourned to 10.15 am on 19 April 2013.  Notice of the adjourned hearing was advertised in The Australian newspaper on 12 April 2013.

   (g)ASIC has confirmed that it has no objection to the scheme. A written statement to that effect has been produced to the Court in satisfaction of s 411(17)(b) of the Act, and is in evidence.

5. There are two additional matters to which I should refer.  The first matter is that the deeds poll referred to in [8] of my earlier reasons were re-executed to ensure that there was no question that certain annexures referred to in them were appropriately annexed.  The second matter is that UDMI waived compliance with certain conditions precedent relating to Chinese approvals. These conditions precedent had been inserted in the SIA for its benefit.  The waiver does not stand as a reason for not approving the scheme. 

6. I was satisfied, therefore, that all conditions precedent to the scheme coming into effect (other than the Court’s approval) had been satisfied. 

7. In my earlier reasons I summarised the background to the proposed scheme and drew attention to certain aspects of it.  It is not necessary for me to repeat those matters:  see at [3]-[13].  In those reasons I also noted that an independent expert had been engaged by Endocoal to prepare a report on the valuation of the scheme consideration and to express an opinion on whether the proposed scheme was fair and reasonable and in the best interests of Endocoal’s shareholders.  I noted that the independent expert had concluded that the scheme consideration was fair to the scheme shareholders.  The expert had also concluded that the scheme itself was fair and reasonable and in the best interests of scheme shareholders:  see at [14]-[16].  I also observed at [24] that I was satisfied that the then proposed scheme was of such a nature and cast in such terms that, if it received the requisite statutory majorities at the scheme meeting, the Court would be likely to approve it.  I note that, subsequently, no person has come forward to oppose it.

8. I was satisfied that there were no discretionary reasons for withholding approval to the scheme and that it was appropriate that approval be granted in all the circumstances.   

9. Endocoal sought exemption from compliance with the requirement of s 411(11) of the Act. I was satisfied that that exemption should be granted.

10. I was assisted in my consideration of the application for approval by written submissions prepared by Endocoal’s senior counsel, who also addressed me orally at the hearing. I have marked those submissions for identification as “MFI 2”.  

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.

Associate:

Dated:       9 May 2013