In the matter of Wiggins Island Coal Export Terminal Pty Ltd

[2025] NSWSC 592

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Wiggins Island Coal Export Terminal Pty Ltd [2025] NSWSC 592

Hearing dates:

28 May 2025

Date of orders:

28 May 2025

Decision date:

10 June 2025

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Order convening creditors’ scheme meeting and associated orders made.

Catchwords:

CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of secured creditors to consider and, if thought fit, to agree to proposed scheme of arrangement – Whether requirements to order scheme meeting are satisfied.

Legislation Cited:

- Supreme Court Corporations Rules 1999 (NSW) r 3.4

- Corporations Act 2001 (Cth), ss 411, 412, 1319

Cases Cited:

- Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15

- F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69

- First Pacific Advisors LLC v Boart Longyear Ltd (2017) 121 ACSR 136; [2017] NSWCA 116

- Re Absolute Equity Performance Fund Ltd [2022] FCA 933

- Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34

- Re David Jones Ltd (No 3) [2014] FCA 753

- Re Ellerston Global Investments Ltd [2020] NSWSC 879

- Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742

- Re Global Garden Products Italy SpA [2016] EWHC 1884 (Ch)

- Re InvoCare Ltd [2023] NSWSC 1180

- Re Lehman Brothers Australia Ltd (No 2) (2013) 95 ACSR 685; [2013] FCA 965

- Re Orion Telecommunications Limited [2007] FCA 1389

- Re Seat Pagine Gialle SpA [2012] EWHC 3686 (Ch)

- Re Staging Connections Group Ltd [2015] FCA 1012

- Re Vocus Group Ltd [2021] NSWSC 630

- Re Wiggins Island Coal Expert Terminal Pty Ltd [2018] NSWSC 1342

- Re Wiggins Island Coal Expert Terminal Pty Ltd [2018] NSWSC 1434

- Re Wridgways Australia Ltd [2010] FCA 1187

Category:

Principal judgment

Parties:

Wiggins Island Coal Export Terminal Pty Ltd (Plaintiff)

Representation:

Counsel:
Mr I Ahmed SC (Plaintiff)

Solicitors:
King & Wood Mallesons (Plaintiff)

File Number(s):

2025/197961

Judgment

Nature of the application and background

1. By Originating Process filed on 23 May 2025, the Plaintiff, Wiggins Island Coal Export Terminal Pty Ltd (“WICET”) applies for orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) relating to a proposed creditors’ scheme of arrangement and associated orders.

2. By way of background, WICET is a private company and is the operating entity within a group of companies that own and operate the Wiggins Island Coal Export Terminal (“Terminal”) located in the Port of Gladstone, Queensland. The terminal is a coal export port and provides rail offloading and offshore wharf loading facilities for coal. It is industry funded in the sense that it is owned by its users. The Terminal is operated in accordance with the Terminal Access Policy which establishes a methodology for calculating the amount payable by a Take or Pay Shipper (“ToP Shipper”) for the provision of services and specifies that the Terminal is to be operated on a cost recovery model. Initially, the Terminal’s maximum capacity identified was fully used by ToP Shippers, but four ToP Shippers have since entered external administration and another ToP Shipper’s agreement was terminated by mutual agreement. The effect of this has been to increase the component of the terminal access charge that relates to operating costs and financing costs to the remaining ToP Shippers.

3. The proposed scheme (“Proposed Scheme”) is a creditors’ scheme that would involve the restructuring of the debt owed by WICET to 21 Senior Financiers under a Senior Syndicated Facilities Agreement dated 9 September 2011 (“SSFA”). This Proposed Scheme has similarities to the first of two schemes approved by the Court in 2018 and 2019 in relation to WICET. Under the first of those schemes, changes to the SSFA were effected by an Amendment and Restatement Deed: Re Wiggins Island Coal Expert Terminal Pty Ltd [2018] NSWSC 1342 (“WICET 1”). Under the second scheme, the maturity date under agreements related to junior financiers was extended, and a payment of interest to those persons was replaced with a payment in kind: Re Wiggins Island Coal Expert Terminal Pty Ltd [2018] NSWSC 1434. The principal effect of this Proposed Scheme is to amend the terms of the SSFA so as to extend the Balloon Maturity Date under that agreement from 30 September 2026 to 31 December 2028. This is intended to allow WICET to avoid an Event of Default occurring under that agreement. I will address the evidence as to WICET’s financing arrangements and the Proposed Scheme below.

4. I made the orders sought by WICET at the conclusion of the hearing on 28 May 2025. These are my reasons for doing so. I have drawn on the helpful submissions of Mr Ahmed, who appeared for WICET, in this judgment.

Explanatory statement and independent expert’s report

5. The draft explanatory statement for the Proposed Scheme contains a detailed summary of the Proposed Scheme; the reasons why the Senior Financiers may wish to vote in favour, or against, the Proposed Scheme; and other information relevant to their consideration of the scheme. WICET has also retained an independent expert to express an opinion as to aspects of the Proposed Scheme and the independent expert’s report forms part of the draft explanatory statement for the Proposed Scheme. The independent expert has expressed the view that, if the Proposed Scheme is implemented, WICET will be solvent, and the Senior Debt will be repaid in full in September 2028. The Independent Expert has also expressed the view that, if the Proposed Scheme was not implemented and WICET entered insolvency processes in approximately December 2025, a receiver or receiver and manager would likely be appointed and would trade on WICET’s business until the Senior Debt was amortised in full in September 2028, and the Senior Financiers would likely still receive full repayment of amounts owing to them. However, the independent expert expresses the opinion that this scenario is subject to greater risks than the Proposed Scheme due to the inherent risks of an enforcement.

Affidavit and other evidence

6. WICET reads an affidavit dated 23 May 2025 of Ms Alana Allard who is its General Counsel and Company Secretary. She deposes to the nature of WICET and its operations, its financing arrangements, the nature of the Proposed Scheme, the alternatives to the scheme that have been explored by WICET, the verification process undertaken in respect of the draft explanatory statement for the scheme, communications with the Australian Securities & Investments Commission (“ASIC”) and the proposed arrangements for the Scheme meeting.

7. Ms Allard describes WICET’s financing arrangements and the terms of the Proposed Scheme. WICET’s indebtedness is primarily owed under the SSFA which provides for two relevant facilities, a cash advance facility (“Term Facility”) and a letter of credit facility (“LC Facility”). Pursuant to the SSFA, WICET has secured borrowings (“Senior Debt”) from certain Senior Financiers under the Term Facility and the LC Facility, and the scheme is directed to those Senior Financiers. As at 31 March 2025, the amount of WICET’s Senior Debt was USD$966 million. Under cl 12.1 of the SSFA, the Principal Outstanding in respect of the Term Facility and the LC Facility must be paid by 30 September 2026 (“Balloon Maturity Date”) and, if WICET does not pay or refinance the Senior Debt by the Balloon Maturity Date, then an Event of Default will occur under cl 18.1(a) of the SSFA.

8. WICET has also issued Junior Debt in the form of notes titled “Gladstone Long Term Securities” (“GiLTS”) to GiLTS holders under the “GiLTS Note Trust Deed” and “GiLTS Subscription Agreement”. There are 45,000 GiLTS priced in Australian dollars with an aggregate face value of AUD$450 million and 5,000 GiLTS priced in US dollars with an aggregate value of USD$50 million. As at 31 March 2025, the balance of the Junior Debt was approximately USD$550 million. The amount of the Junior Debt will not be compromised by the Scheme. Two of the Senior Financiers, Korea Development Bank and Deutsche Bank AG, London Branch, are also GiLTS holders. The Junior Debt is due to mature on 31 March 2027 (“Junior Debt Maturity Date”). If the Senior Debt is not repaid on the Balloon Maturity Date, an Event of Default under the GiLTS Note Trust Deed will occur. However, pursuant to the Intercreditor Terms, the Junior Debt is not payable or otherwise capable of satisfaction until the Senior Debt has been repaid and the Junior Financier Debt Representative cannot declare that an event of default has occurred or that the Junior Debt is due and owing until at least six months after the Balloon Maturity Date, nor instruct the Security Trustee to take enforcement action until such a date.

9. WICET Holdings Pty Limited (“WICET Holdings”) has also issued 550,000 redeemable preference shares knows as “WIPS”. The face value of the WIPS is AUD$550 million. Following a restructure of the WIPS in FY2021, the debt owed by WICET in this respect was fair valued and adjusted to an amortised closing value each period. As at June 2024, the fair value of the debt was approximately AUD$1.8 million (“HoldCo Debt”). Under the Intercreditor Terms, the HoldCo Debt is not payable or otherwise capable of satisfaction until both the Senior Debt and the Junior Debt have been repaid. The amount of the HoldCo Debt will also not be compromised under the Proposed Scheme. As at 31 March 2025, WICET also had certain additional unsecured facilities (“Expansion Loans”) which are unsecured interest-bearing loans, with interest being charged at market rates and total approximately USD$51 million. The Expansion Loans are subordinated until all other liabilities of WICET have been repaid in full.and the amount of these loans will not be compromised under the Proposed Scheme.

10. As I noted above, the principal effect of this Proposed Scheme is to amend the terms of the SSFA so as to extend the Balloon Maturity Date under that agreement from 30 September 2026 to 31 December 2028. The Proposed Scheme would also make additional changes to the SSFA, by adjusting interest rate cap options so as to have a higher potential strike price and amending the definition of “Permitted GiLTS Refinancing” under the SSFA to include a refinancing that extends the Junior Debt Maturity Date to a date no earlier than 31 December 2028, subject to the subordination terms set out in the Intercreditor Terms. Additionally, but outside the operation of the Proposed Scheme, the Amendment Deed will effect an amendment to the Intercreditor Terms in respect of the Balloon Maturity Date to extend it from 30 September 2026 to 31 December 2028. The practical effect of this is that the Junior Debt Maturity Date will be extended to six months after the amended Balloon Maturity Date of 31 December 2028 because, under the Intercreditor Terms, the Junior Financier Debt Representative cannot declare that an Event of Default has occurred or that the Junior Debt is due and owing until at least six months after the Balloon Maturity Date.

11. In addition, the Amendment Deed will amend the Intercreditor Terms in respect of the Junior Debt Maturity Date. At present, the Junior Debt Maturity Date is defined to be 31 March 2027. The new definition of “Junior Debt Maturity Date” will be “the Maturity Date (as defined in the GiLTS Terms and Conditions) (as amended or varied from time to time, provided such date is no earlier than 31 March 2027)”. The effect of this amendment is that the Intercreditor Terms will reflect any amendment or variation to the Maturity Date of the GiLTS, so that a future revision to the Maturity Date of GiLTS would not require corresponding amendments to be made to the Intercreditor Terms.

12. Ms Allard also addresses the reasons for proposing the scheme and notes that, on WICET’s projected cashflows, it will not be in a position to repay the Senior Debt on the current Balloon Maturity Date of 30 September 2026, and, absent the Proposed Scheme, an Event of Default would then occur, default interest would become payable and WICET would likely enter into a formal insolvency process. Ms Allard notes that, by contrast, the implementation of the Proposed Scheme would extend the Balloon Maturity Date to 31 December 2028, enable WICET to maintain its solvency and avoid the payment of default interest, and provide WICET with a more sustainable capital structure that provides for repayment of the Senior Debt by the amended Balloon Maturity Date, supports the stability of operations at the Terminal and avoids the potential costs, delays, uncertainties and other adverse consequences arising from an event of default and insolvency process.

13. Ms Allard’s evidence is that alternatives to the Proposed Scheme have been considered since at least 2023, including seeking to refinance the Senior Debt or a consensual restructure of the Senior Debt to extend the Balloon Maturity Date. Ms Allard notes that, due to environmental, social and governance restrictions amongst domestic and international financiers, the pool of financiers who could participate in a refinance of the Senior Debt has diminished and a refinance was not commercially viable. While a consensual restructure was pursued, unanimous agreement from all Senior Financiers could not be achieved, because it appears that at least two financiers would be unable to reach a decision in a timely way. Ms Allard’s evidence is that the Proposed Scheme is considered the only feasible course available to WICET.

14. Ms Allard’s evidence is that the (substantial) majority of the Senior Financiers to WICET have entered into a Restructuring Support Deed (“RSD”), by which they have agreed that they will take all actions reasonably required to implement the restructure contemplated in a Term Sheet that forms part of the RSD and the Proposed Scheme. The RSD provides for a payment by way of an Extension Fee in the amount of USD$7.39 million to be made to those Senior Financiers who executed the RSD prior to 4 April 2025. All but two of the Senior Financiers have executed the RSD and the executing Senior Financiers represent 82.12% of the Senior Debt. The two Senior Financiers that have not executed the RSD have not indicated that they intend to actively oppose or challenge the scheme, and they were not able to execute credit approvals in sufficient time to execute the RSD. They did not appear at the hearing to oppose the orders sought.

15. WICET also reads an affidavit dated 23 May 2025 of Nathan King who is its Chief Financial Officer. He deposes to WICET’s financial position and information relevant to the independent expert’s report prepared in respect of the Proposed Scheme.

16. WICET also tendered correspondence with the Australian Securities & Investments Commission (“ASIC”) (Ex P1), a letter dated 27 May 2025 from ASIC (Ex P2) which indicated that it did not currently propose to appear to make submissions or intervene to oppose the scheme at this hearing, and instructions dated 13 May 2025 to the Agent in connection with the Proposed Scheme (Ex P3).

Applicable principles and general matters relevant to whether to convene the scheme meeting

17. The Court’s role at the first Court hearing in respect of a scheme is to determine, in the exercise of its discretion, whether to approve the convening of a scheme meeting and the explanatory statement if it is satisfied of several matters, namely that the plaintiff is a Pt 5.1 body; the proposed scheme is an “arrangement” within the meaning of s 411 of the Act; the scheme is bona fide and properly proposed; ASIC has had a reasonable opportunity to examine the Proposed Scheme and explanatory statement, to make submissions and has had 14 days’ notice of the proposed hearing date of the first Court hearing; the procedural requirements under the Supreme Court (Corporations) Rules 1999 (NSW) have been met; and there is no apparent reason why the scheme should not, in due course, receive the Court’s approval if the necessary majority of votes is achieved: Re Orion Telecommunications Limited [2007] FCA 1389 at [5]; Re Staging Connections Group Ltd [2015] FCA 1012 at [19]; Re Wridgways Australia Ltd [2010] FCA 1187 at [30]; Re Ellerston Global Investments Ltd [2020] NSWSC 879 at [25]-[26]; Re Vocus Group Ltd [2021] NSWSC 630 at [12].

18. The Court will not ordinarily summon a scheme meeting unless the scheme is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it. The Court will consider whether the Proposed Scheme is fit for consideration at the proposed scheme meeting, in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it on the hearing of a petition which is unopposed; and that members are to be properly informed as to the nature of the scheme before the scheme meeting: F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72, approved in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 504; [1993] HCA 15; Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742 at [36] and [44], cited with apparent approval in Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34 at [58]; Re InvoCare Ltd [2023] NSWSC 1180 at [16]-[17]; Re Absolute Equity Performance Fund Ltd [2022] FCA 933 at [18]-[22].

19. Each of the preconditions to the exercise of the Court’s discretion in s 411 of the Act are satisfied here. WICET is a company registered under the Act and a Pt 5.1 body. Mr Ahmed submits, and I accept, that the Proposed Scheme is a “compromise” or “arrangement” within the meaning of s 411 of the Act. He rightly points out that the terms “compromise” and “arrangement” in that section are to be construed liberally and not given any narrow interpretation, and the concept of an “arrangement” contemplates almost any arrangement within the power of the company that is not contrary to law and which touches or concerns the rights of the company or creditors: Re Lehman Brothers Australia Ltd (No 2) (2013) 95 ACSR 685; [2013] FCA 965 at [38]. As Mr Ahmed points out, the compromise or arrangement in the present case involves the Senior Financiers adjusting the terms of the debts owed to them in order to avoid the insolvency of WICET, and the effect of this change is that the Senior Financiers would not be entitled to default interest upon the debt not being paid by the original Balloon Maturity Date, which represents a compromise in respect of that debt. Mr Ahmed also submits, and I also accept, that:

“It is clear that the [s]cheme involves an arrangement or compromise in respect of WICET’s debts in circumstances where the repayment date for the Senior Debt will be changed, and where doing so will result in the Senior Financiers losing an entitlement to default interest that they would otherwise have. On the other side of the ledger, by the [s]cheme the Senior Financiers will avoid risks of the kind identified by the Independent Expert as inherent in an insolvency process. This is a classic trade-off. In circumstances where the relevant trade-off is disclosed to the Senior Financiers, they should be permitted to consider whether to agree to it through the [s]cheme meeting.”

20. There is no reason to doubt that there has been proper disclosure of matters to the Senior Financiers, where a detailed explanatory statement sets out the details of the Proposed Scheme and relevant matters in relation to it and has been subject to a verification process in customary form. There is also no reason to doubt that the Proposed Scheme is bona fide and has been properly proposed, where it seeks to effect a reorganisation of WICET’s affairs, and the independent expert has expressed the opinion in relation to the effect of the Proposed Scheme. ASIC has had an opportunity to examine the Proposed Scheme and the draft explanatory statement and I have referred to its position above. The procedural requirements in relation to the Proposed Scheme have been met, and the draft explanatory statement addresses the prescribed disclosure requirements under s 412(1) of the Act and reg 5.1.01 of the Corporations Regulations.

Additional matters

21. Mr Ahmed addresses several additional matters in submissions. First, Mr Ahmed notes that, as part of the Proposed Scheme, various obligations will be performed by third parties, including the Senior Agent (as defined) pursuant to deeds poll that bind them to the terms of the scheme. He submits, and I accept, that this is a commonplace approach in circumstances where a third party is required to carry out a step to implement a scheme.

22. Second, Mr Ahmed submits, and I accept, that the proposed amendments to the Intercreditor Terms provides no reason not to convene the scheme meeting, where those amendments will take any effect outside the scheme. I also accept that, consistently with the position that the Court adopted in respect of the first scheme in respect of WICET, the question of power to make the proposed amendments to the Intercreditor Terms does not provide any reason not to convene the Scheme meeting. Mr Ahmed address the scope of the amendment power under cl 12(a)(ii) of the Intercreditor Terms, but I here adopt that approach which I previously took in response to substantially the same propositions in convening the scheme meeting in WICET 1 at [27]-[30] as follows:

“[The] proposed amendments to cll 6.1 and 11 of the Intercreditor Terms are conditions precedent to giving effect to the proposed scheme and are to be made by the STID Amendment Deed will be effected in reliance on cl 12 of the Intercreditor Terms which, WICET contends, when read in conjunction with cl 6.1(i)(i), permits WICET and the Intercreditor Agent to make amendments to the Intercreditor Terms in the context of a restructuring of the Senior Debt following, or in order to avoid, an Event of Default. Mr Lockhart and Mr Izzo submit that amendments made in this way do not require the consent of the GiLTS holders, although it is a condition precedent to the SSFA Amendment Deed taking effect that at least 50.1% of the GiLTS holders have instructed the GiLTS Notes trustee to approve the amendments (SSFA Amendment Deed, cl 4 and Schedule 2). At the Court’s request, Mr Lockhart and Mr Izzo made supplementary submission setting out the steps in WICET ’s reliance on cll 6.1 and 12 of the Intercreditor Terms in greater detail.”

The availability of the approach adopted by WICET depends upon whether the Intercreditor Agent may agree to the relevant amendments on the instructions of the majority of Senior Lenders and without the consent of the Junior Financier Debt Representative acting on the instructions of the Majority GILTS Holders (as defined). That depends upon whether the amendment is within the circumstances specified in cl 6.1(i) of the Intercreditor Terms, and WICET contends that it is not, because it is within an exception to that paragraph that is applicable to an amendment made in the context of a restructuring of the Senior Debt in order to avoid an Event of Default.

The availability of the approach adopted by WICET also depends upon whether that result is displaced by cl 6.1(i)(v) of the Intercreditor Terms, which prohibits an amendment to the terms of the finance documents without the consent of the Junior Financier Debt Representative if it relates to any provisions relating to payment of Junior Debt, including the application of amounts from the Cashflow Waterfall for that purpose. It seems to me that there is force in WICET ’s submission that cl 6.1(i)(v) of the Intercreditor Terms does not apply, because the amendments do not address payment of the Junior Debt, which has at all times been subordinated to the Senior Debt, but only the triggering of enforcement action that would not bring about such payment and the manner in which amounts are deposited to particular accounts, without diminishing the amount available for the payment of Junior Debt. Mr Lockhart and Mr Izzo fairly accept that contrary arguments may be available to that put by WICET, but submit that WICET’s view is the better view, or is at least sufficiently arguable that the Court would not decline to order a first scheme meeting because of any availability of a contrary view.

I consider that it is preferable not to address this question in any greater detail, where it may be in issue at the second scheme hearing, if there is opposition to the scheme, or in any challenge to the transaction brought in any separate proceedings. These steps are taken outside the scheme and it seems to me that WICET’s view is at least a reasonably arguable view of the relevant provisions. The possibility that alternative views might be put (although no creditor sought to put them at this first hearing) is not reason to decline to order a first scheme meeting and is not such that the Court could not approve the scheme at a second scheme hearing if it was approved by the requisite majority of creditors. This is not a scheme that is clearly bound to fail, or where issues as to construction of cll 6.1 and 12 of the Intercreditor Terms plainly have the result that the conditions precedent to the scheme could not be satisfied, or would plainly lead the Court to refuse to approve the scheme. The first scheme meeting is not otherwise the occasion to resolve difficult questions as to which reasonable minds may differ: Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 at [20]; Re CSR Ltd above at [59].”

23. Third, Mr Ahmed notes that two of the Senior Financiers also hold GiLTS. He submits and I accept that this does not create the need for separate classes. He points to the test as to whether a separate class of creditors arises as summarised by the Court of Appeal in First Pacific Advisors LLC v Boart Longyear Ltd (2017) 121 ACSR 136 at [80]; [2017] NSWCA 116, which directs attention to whether creditors have different rights or rights differently affected by the scheme and whether those differences make it impossible for the creditors in question to consider the scheme as one class. He submits that (1) all creditors affected by the Scheme are lenders under the SSFA and their rights are identical and the scheme does not affect them differently; (2) the fact that two financiers also hold GiLTS does not alter this position, where the scheme does not directly affect the rights of GiLTS holders; and (3) although amendments to the Intercreditor Terms do affect those rights, the amendments are not made by the scheme I, and, in any event, they are not such as to make it impossible for Senior Financiers who have GiLTS to consult with those who do not. I accept that submission which is consistent with the view that I expressed in WICET 1 at [27] as follows.

“The creditors which would be bound by the scheme are lenders under the Senior SFA, and their respective rights are identical and the scheme does not affect them differently. Three Senior Financiers, or their affiliates, hold both GiLTS and Senior Debt (Allard 9.8.18 [80]–[81]). Mr Lockhart and Mr Izzo submit that the proposed scheme itself does not affect the rights of GiLTS holders, although they recognise that the proposed amendments to the STID, which are a condition precedent to effecting the scheme, affect those rights by delaying the time at which GiLTS holders can enforce their debt. Irrespective of that matter, they submit, and I accept, that different classes of creditors are not required where the proposed amendments to the STID are not such as to make it impossible for Senior Financiers who have GiLTS to consult with those who do not, particularly where the likely alternative to the scheme is an insolvency in which the Senior Debt would be repaid in full over a lengthy period before any return was available to GiLTS holders. It seems to me to be sufficient in those circumstances that WICET tag the votes of these three Senior Financiers, as it proposes to do, so account can be taken of the exercise of those votes at the second court hearing.”

24. WICET has here confirmed that it will tag the votes of the two relevant creditors and that is sufficient to address this issue.

25. Fourth, Mr Ahmed notes that, as I also noted above, an Extension Fee is payable under the RSD to those Senior Financiers who executed it by the identified time. Mr Ahmed submits, and I accept, that this does not give rise to any class issue. He refers to English case law which has considered consent fee arrangements of this kind and held that there will generally be no class issue where the consent fee is available to all creditors, it is relatively small compared to the size of the outstanding debt, and it is not likely that a creditor with substantial objections on commercial grounds would be swayed in their view by a fee at such a level: Re Seat Pagine Gialle SpA [2012] EWHC 3686 (Ch) at [14]-[22] (“Re Seat Pagine Gialle SpA”); Re Global Garden Products Italy SpA [2016] EWHC 1884 (Ch) at [51]-[53]. Those considerations are satisfied here. Mr Ahmed also recognises that the existence of a consent fee may be relevant to the court’s exercise of discretion at the second court hearing if it can be shown that it in fact affected the way creditors voted: Re Seat Pagine Gialle SpA at [20]. He submits that is unlikely here, given the modest size of the consent fee compared to the outstanding debt, but that question is properly deferred to the second Court hearing. Mr Ahmed also submits, and I accept, that the consent fee does not raise any issue of collateral benefit in circumstances where the opportunity to receive it was offered to all Senior Financiers: Re David Jones Ltd (No 3) [2014] FCA 753 at [13].

26. Finally, Mr Ahmed points to several ancillary orders that are set out in the attached Short Minutes of Order that are of a kind ordinarily made in the context of schemes of arrangement, which cause no difficulty here. These matters, separately and together, give rise to no reason not to convene the scheme meeting.

Exercise of the Court’s discretion whether to convene the scheme meeting

27. Turning now to the wider issues relevant to the exercise of the Court’s discretion whether to convene the scheme meeting, no apparent difficulty arises with the disclosure in the scheme booklet and the verification process adopted in respect of the scheme booklet, and I am satisfied that there is nothing in the terms of the scheme or in its effect on WICET’s creditors that would otherwise warrant the Court declining to approve the scheme at the second Court hearing, if it receives the statutory majorities required by s 411(4)(a)(ii) of the Act at the scheme meeting.

Orders

28. For these reasons, I made the orders sought by WICET at the conclusion of the first Court hearing on 28 May 2025.

**********

Decision last updated: 10 June 2025