In the matter of Wiggins Island Coal Export Terminal Pty Ltd (No 2)

[2025] NSWSC 682

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Wiggins Island Coal Export Terminal Pty Ltd (No 2) [2025] NSWSC 682

Hearing dates:

26 June 2025

Date of orders:

26 June 2025

Decision date:

27 June 2025

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Orders made approving a creditors’ scheme of arrangement.

Catchwords:

CORPORATIONS — arrangements and reconstructions — schemes of arrangement or compromise — application under s 411 of the Corporations Act 2001 (Cth) for orders approving creditors’ scheme of arrangement — where formal requirements satisfied — whether scheme of arrangement should be approved.

Legislation Cited:

- Corporations Act 2001 (Cth), ss 411, 411(6), 412(7), 1319

Cases Cited:

- Re Billabong International Ltd (No 2) [2018] FCA 496

- Re Boart Longyear Ltd (No 2) (2017) 122 ACSR 437; [2017] NSWSC 1105

- Re Newcrest Mining Ltd (No 2) [2023] FCA 1251

- Re Redflex Holdings Ltd (No 3) [2021] FCA 527

- Re Village Roadshow Ltd (No 2) [2020] FCA 1857

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

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

- Re Wiggins Island Coal Export Terminal Pty Ltd [2025] NSWSC 592

- Snowside Pty Ltd (as trustee for the Snowside Trust) v Boart Longyear Ltd (2017) 122 ACSR 291; [2017] NSWCA 215

Category:

Principal judgment

Parties:

Wiggins Island Coal Export Terminal Pty Ltd (Plaintiff)
Commonwealth Bank of Australia (Senior Agent)

Representation:

Counsel:
Mr I Ahmed SC (Plaintiff)
Mr G Gee (Commonwealth Bank of Australia)

Solicitors:
King & Wood Mallesons (Plaintiff)
Allens (Commonwealth Bank of Australia)

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”) applied for orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) relating to a proposed creditors’ scheme of arrangement (“Scheme”) and associated orders.

2. As I noted in an earlier judgment in Re Wiggins Island Coal Export Terminal Pty Ltd [2025] NSWSC 592 (“Earlier Judgment”), 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. The Scheme involves the restructuring of the debt owed by WICET to 21 Senior Financiers under a Senior Syndicated Facilities Agreement dated 9 September 2011 (“SSFA”). This Scheme has similarities to the first of two schemes approved by the Court in 2018 and 2019 in relation to WICET: Re Wiggins Island Coal Expert Terminal Pty Ltd [2018] NSWSC 1342; Re Wiggins Island Coal Expert Terminal Pty Ltd [2018] NSWSC 1434. The principal effect of the 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.

3. On 28 May 2025, I made orders convening a meeting of the relevant creditors (“Scheme Creditors”) of WICET in respect of the Scheme, for the reasons set out in the Earlier Judgment. That meeting was held on 18 June 2025 and the Scheme Creditors there voted in favour of the Scheme by the requisite majorities.

4. I made orders approving the Scheme at the conclusion of the hearing on 26 June 2025. These are my reasons for doing so, and I have drawn on the helpful submissions of Mr Ahmed, who appeared for WICET, in this judgment.

Affidavit evidence

5. At this second Court hearing, WICET reads an affidavit dated 19 June 2025 of Mr Darryl McDonough, who is the Chairman of WICET and acted as chair of the scheme meeting and gives evidence as to the conduct of the scheme meeting and the results of that meeting.

6. WICET also reads the affidavit dated 23 June 2025 of Ms Alana Allard, who is the General Counsel and Company Secretary for WICET. She gives evidence of the publication of notice in relation to this hearing, the dispatch of the explanatory statement for the scheme, minor amendments that are now sought in relation to the Scheme, and communications with the Australian Securities & Investment Commission (“ASIC”).

7. WICET also reads an affidavit 19 June 2025 of Mr Kefeng Lu, a solicitor acting for WICET, who gives evidence as to the dispatch of the scheme booklet and other materials and correspondence with the scheme creditors. WICET also tendered the final version of the Scheme (Ex 1), a letter dated 25 June 2025 from ASIC indicating that it did not propose to appear at the second Court hearing (Ex 2) and a conditions precedent certificate (Ex 3).

Submissions and determination

8. Mr Ahmed submits, and I accept, that the Court’s orders in relation to the dispatch of material relating to the scheme were substantially complied with. In respect of one Senior Financier, some of the electronic addressees were inadvertently omitted in an email sent on 29 May 2025 but this was subsequently remedied on 30 May 2025 by the material being sent to all electronic addressees. On the day after the material was dispatched, the legal representatives for the scheme creditors recognised that a notice of meeting included among the material dispatched (but not the notice of meeting contained as part of the scheme booklet) had a cross-referencing error, and that was also corrected on 30 May 2025, when a revised version of that notice of meeting was sent by email to the Scheme Creditors. These matters are not material and provide no reason not to approve the scheme.

9. The Scheme meeting was held on 18 June 2025 in accordance with the Court’s orders. Proxy forms were due to be submitted by the Scheme Creditors by 10:00am on 16 June 2025 and, by that time, 20 of the 21 Scheme Creditors had submitted properly executed proxy forms. One Scheme Creditor sent a completed, but unsigned proxy form at 9.55am on 16 June 2025, and stated its intention was to vote “for” the resolution to be put to the Scheme Creditors at the scheme meeting. It subsequently sent an email confirming its instruction in respect of its proxy was to vote in favour of the Scheme (at 10.02am) and later sent a signed proxy form (at 12.41pm). This matter is also not material where the Scheme was approved by the requisite majorities irrespective of whether the late proxy was counted or not.

10. In accordance with an undertaking given at the first Court hearing, the votes of those Scheme Creditors who were also GiLTS holders were tagged. One of those creditors voted against the Scheme, and another voted in favour of the Scheme. If their votes were excluded, then the scheme would have been approved unanimously.

11. The conditions precedent to the Scheme (other than Court approval, satisfaction of other conditions required by the Court (which has not occurred) and lodging the Court orders with ASIC) have been satisfied or waived. As I noted above, ASIC does not seek to be heard in opposition to approval of the Scheme. On 18 June 2025, after the scheme meeting, WICET published an announcement of this hearing on its website. No notice of objection was received and no third party sought to oppose the Scheme at the second Court hearing.

12. Mr Ahmed points out that the form of the Scheme for which approval is sought differs from that which was placed before the Court at the first Court hearing and was the subject of the scheme meeting. The amendments to the Scheme are to correct the name of a Scheme Creditor to refer to “Fort Canning Investments Pte Ltd” (rather than to “Fort Canning/Broad Peak”) and to update the address for service of another Scheme Creditor at its request. Mr Ahmed submits, and I accept, that the Court has power to approve the scheme with the relevant amendments under s 411(6) of the Act, which provides that the Court may grant its approval to a compromise or arrangement subject to such alterations or conditions as it thinks just. That power is not limited to alterations which are immaterial, insubstantial or insignificant and is only circumscribed by the requirement that the Court thinks the alteration is one that is just: Re Boart Longyear Ltd (No 2) (2017) 122 ACSR 437; [2017] NSWSC 1105 at [91]; Snowside Pty Ltd (as trustee for the Snowside Trust) v Boart Longyear Ltd (2017) 122 ACSR 291 at [26]; [2017] NSWCA 215; Re Billabong International Ltd (No 2) [2018] FCA 496 at [13]–[16]; and, for other examples of approval of amended schemes, Re Village Roadshow Ltd (No 2) [2020] FCA 1857; Re Redflex Holdings Ltd (No 3) [2021] FCA 527 at [23]–[25]; Re Newcrest Mining Ltd (No 2) [2023] FCA 1251 at [20]–[22]. The relevant amendments are of a minor or technical nature and they do not alter the substance of the scheme or prejudice scheme creditors, and I am satisfied that the Court should exercise its power under s 411(6) of the Act to approve the Scheme in its amended form.

13. Mr Ahmed in turn submits, and I accept, that the Court must be satisfied of six matters in determining whether to give final approval to a scheme of arrangement, namely that the plaintiff has complied with the orders of the Court convening the meeting of creditors; the meeting of creditors so convened has approved the Scheme with the requisite majorities; all other statutory requirements have been satisfied; the scheme is fair and reasonable so that an intelligent and honest person who was a creditor of the relevant class, properly informed and acting alone, might approve it; the plaintiff has brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court’s discretion; and there was full and fair disclosure to creditors of all information material to the decision to vote for or against the applicable scheme.

14. There is no reason to doubt that these matters are satisfied here. The scheme booklet contained detailed disclosure of the nature of the Scheme. There is also no reason to doubt that the Scheme is fair and reasonable in the relevant sense, where it is principally to extend the Balloon Maturity Date for the Senior Debt and prevent an insolvency arising in respect of the Senior Debt, and the Scheme has received a high level of support from sophisticated Scheme Creditors. Mr Ahmed also rightly notes that s 412(7) of the Act provides that the Court must not make an order approving a creditors’ scheme unless it is satisfied that ASIC has had a reasonable opportunity to examine the explanatory statement and to make submissions in relation to that statement. I am satisfied that is the case here where a draft of the scheme booklet was provided to ASIC prior to the first Court hearing; the final version of the Scheme Booklet was provided to ASIC on 29 May 2025; and ASIC has expressed no concern as to the Scheme.

15. WICET also seeks an exemption pursuant to s 411(12) of the Act from compliance with s 411(11) of the Act so that a copy of the Court order approving the Scheme does not need to be annexed to each copy of WICET’s constitution that may be issued in the future. An order of this kind is appropriate where, as here, the rights of shareholders in the scheme companies are not modified in any way.

Orders

16. For these reasons, I made the orders sought by WICET at the conclusion of the first Court hearing on 26 June 2025.

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Decision last updated: 30 June 2025