FEDERAL COURT OF AUSTRALIA
5G Networks Limited, in the matter of 5G Networks Limited [2021] FCA 1189
File number: VID 513 of 2021 Judgment of: BEACH J Date of judgment: 1 October 2021 Catchwords: CORPORATIONS – reverse takeover –– members’ scheme of arrangement –– first court hearing – order sought under s 411(1) of the Corporations Act 2001 (Cth) – performance risk – reimbursement fee – performance rights – need for separate classes – other potential class issues – tagging of votes – ineligible foreign shareholders – no approval sought of explanatory statement – orders made Legislation: Corporations Act 2001 (Cth) ss 50AA, 259C, 411(1), 411(17), 412, 1319
Corporations Regulations 2001 (Cth) reg 5.1.01, Sch 8
Federal Court (Corporations) Rules 2000 (Cth) rr 2.15, 3.4
Insolvency Practice Rules (Corporations) 2016 (Cth) r 75-15(2)
Cases cited: Re Amcor Ltd [2019] FCA 346
Re Choiseul Investments Ltd [2010] FCA 1189
Re RXP Services Ltd [2021] FCA 38
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 59 Date of hearing: 1 October 2021 Counsel for the Plaintiff: Mr B Holmes Solicitor for the Plaintiff: Norton Rose Fulbright ORDERS
VID 513 of 2021 IN THE MATTER OF 5G NETWORKS LIMITED (ACN 163 312 025)
5G NETWORKS LIMITED (ACN 163 312 025)
Plaintiff
ORDER MADE BY:
BEACH J
DATE OF ORDER:
1 OCTOBER 2021
OTHER MATTERS:
A.The Court notes that ASIC was provided with at least 14 days’ notice of the hearing of this application.
B.The Court is satisfied that ASIC has had a reasonable opportunity to:
(i)examine the terms of the proposed scheme of arrangement to which the application relates and a draft explanatory statement relating to that arrangement; and
(ii)make submissions to the Court in relation to the proposed scheme of arrangement and the draft explanatory statement.
C.The Court notes the letter from ASIC to the directors of the plaintiff, 5G Networks Limited dated 30 September 2021 produced at the hearing.
THE COURT ORDERS THAT:
1.Pursuant to section 411(1) and section 1319 of the Corporations Act 2001 (Cth), 5G Networks Limited (the company) convene and hold a meeting of its shareholders (Scheme Meeting):
(a)for the purpose of considering and, if thought fit, agreeing (with or without modification) to the scheme of arrangement (Scheme) proposed to be made between the company and its shareholders (5GN Shareholders), the terms of which are set out in annexure A to these orders; and
(b)to be held on Monday, 8 November 2021 at 10.00 am (AEDT, being Melbourne time) and to be conducted electronically through an online platform, which is to be accessed in accordance with the instructions included in the Notice of Meeting to be sent to shareholders.
2.Pursuant to section 411(1) and section 1319 of the Act, the Scheme Meeting be convened by sending on or before Wednesday, 6 October 2021 to each 5GN Shareholder whose name is recorded in the company’s register of members as being a shareholder as at 7.00 pm (AEDT, being…
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- AGLC
- Re 5G Networks Limited [2021] FCA 1189
- Case
- [2021] FCA 1189
- Decision Date
CaseChat Overview and Summary
The Court made orders under sections 411 and 1319 of the Corporations Act 2001 (Cth) to convene a meeting of shareholders to consider and vote on the scheme. The meeting is to be held electronically on 8 November 2021, and shareholders are to receive notice and materials in accordance with the Court's orders. The Court also made orders to allow for the tagging of votes and to address the impact of ineligible foreign shareholders. The Court found that the scheme was likely to be approved if it achieved the necessary statutory majorities and that the potential performance risk and reimbursement fee did not prevent approval. The Court concluded that the scheme was in the best interests of 5GN and its shareholders. The Court's orders provide for the convening of the shareholder meeting, the provision of notice and materials to shareholders, and the conduct of the meeting. The Court also made orders to allow for the tagging of votes and to address the impact of ineligible foreign shareholders. The Court's orders ensure that the scheme meeting is conducted in a fair and transparent manner and that all shareholders have the opportunity to participate in the decision-making process.
Orders
Orders of the court
1. Pursuant to section 411(1) and section 1319 of the Corporations Act 2001 (Cth), 5G Networks Limited (the company) convene and hold a meeting of its shareholders (Scheme Meeting):
(a) for the purpose of considering and, if thought fit, agreeing (with or without modification) to the scheme of arrangement (Scheme) proposed to be made between the company and its shareholders (5GN Shareholders), the terms of which are set out in annexure A to these orders; and
(b) to be held on Monday, 8 November 2021 at 10.00 am (AEDT, being Melbourne time) and to be conducted electronically through an online platform, which is to be accessed in accordance with the instructions included in the Notice of Meeting to be sent to shareholders.
2. Pursuant to section 411(1) and section 1319 of the Act, the Scheme Meeting be convened by sending on or before Wednesday, 6 October 2021 to each 5GN Shareholder whose name is recorded in the company’s register of members as being a shareholder as at 7.00 pm (AEDT, being Melbourne time) on Friday, 1 October 2021:
(a) an email to each 5GN Shareholder who has nominated an electronic address for the purpose of receiving notices from the company (email shareholder) (or, in the case of joint holders, to the holder whose name appears first in the company’s register), such email to be substantially in the form of annexure GD-5 to the affidavit of Glen Alan Dymond sworn on 29 September 2021, and which contains hyperlinks to:
(i) an electronic copy of a document substantially in the form of the document which is annexure GD-1 to the Dymond affidavit (Scheme Booklet) (which contains, among other things, the proposed Scheme at annexure C and Notice of Scheme Meeting at annexure E);
(ii) an online portal or website that is accessible by the email shareholder and which enables the email shareholder to lodge proxy voting instructions for the Scheme Meeting online; and
(iii) an online portal or website that is accessible by the email shareholder to view, listen to and participate in the Scheme Meeting online;
(b) to each 5GN Shareholder who is not an email shareholder (or, in the case of joint holders, to the holder whose name appears first in the company’s register) (postal shareholder):
(i) a hard-copy document substantially in the form of annexure GD-6 to the Dymond affidavit setting out a URL which provides access to a website from which the postal shareholder:
A. can download an electronic copy of the Scheme Booklet (which contains, among other things, the proposed Scheme at annexure C and Notice of Scheme Meeting at annexure E); and
B. directed to an online portal or website that is accessible by the postal shareholder to view, listen to and participate in the Scheme Meeting online; and
(ii) a hard copy proxy form substantially in the form which is at annexure GD-7 of the Dymond affidavit and a reply paid envelope for the postal shareholder to lodge their proxy form and voting instructions for the Scheme Meeting.
3. The documents referred to in order 2(b) be sent:
(a) in the case of postal shareholders whose registered address is within Australia, by prepaid ordinary post addressed to the relevant addresses recorded in the company’s register; and
(b) in the case of postal shareholders whose registered address is outside Australia, by airmail or international courier service addressed to the relevant addresses recorded in the company’s register.
4. Compliance with r 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) be dispensed with, except in so far as that rule applies rule 75-15(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth).
5. Voting on the resolution to agree to the Scheme is to be conducted by way of a poll.
6. A proxy in respect of the Scheme Meeting will be valid and effective if, and only if, it is completed and delivered in accordance with its terms or a proxy is lodged online in accordance with the instructions on the online portal or website referred to in order 2(a)(ii) and received by the company by 10.00 am (AEDT, being Melbourne time) on Saturday, 6 November 2021.
7. Mr Albert Cheok or, failing him, Mr Jason Ashton, be chairperson of the Scheme Meeting.
8. The chairperson of the Scheme Meeting has the power to adjourn the Scheme Meeting to such time, date and at such place (including electronically) as the chairperson considers appropriate.
9. The company publish a notice of hearing in The Australian newspaper, in substantially the form that appears at annexure GD-9 to the Dymond affidavit, not later than 5 days prior to the date fixed for the hearing of any application to approve the Scheme, and the company be relieved from compliance with Rule 3.4 and Form 6 of the Rules to the extent necessary.
10. The further hearing of the originating process by Justice Beach is adjourned to 10.15 am (AEDT, being Melbourne time) on Thursday, 11 November 2021 or as soon thereafter as the business of the Court allows.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
Scheme of Arrangement
[The order entered is available on the Commonwealth Courts Portal, which attaches the Scheme]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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