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Re Alto Metals Ltd

Re Alto Metals Ltd

Case [2024] WASC 455 3 December 2024

Scheme of Arrangement

Supplementary Disclosure

Independent Expert's Opinion

Best Interests of Shareholders

Corporate Law & Governance

Type to search within this case.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE ALTO METALS LTD; EX PARTE ALTO METALS LTD [2024] WASC 455
CORAM:   HILL J
HEARD:   11 OCTOBER 2024, 5 & 29 NOVEMBER 2024
DELIVERED          :   11 OCTOBER 2024, 5 & 29 NOVEMBER 2024
PUBLISHED           :   3 DECEMBER 2024
FILE NO/S:   COR 147 of 2024
MATTER:   IN THE MATTER OF ALTO METALS LTD

EX PARTE
ALTO METALS LTD
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Application for orders convening scheme meeting under s 411(1) of Corporations Act 2001 (Cth) - Independent expert of opinion that proposed scheme is not fair but reasonable and in best interests of shareholders - Whether requirements to order scheme meeting are satisfied - Orders made convening scheme meeting

Corporations - Scheme of arrangement - Application for orders pursuant to s 1319 of Corporations Act 2001 (Cth) - Supplementary disclosure to address ASX announcements by bidder - Whether court should order dispatch of supplementary disclosure - Orders made for dispatch

Corporations - Scheme of arrangement - Application for orders approving scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme

Legislation:

Corporations Act 2001 (Cth) s 411, s 412, s 1319
Corporations Regulations 2001 (Cth) sch 8
Supreme Court (Corporations) (WA) Rules 2004 (WA) r 3.2

Result:

Orders made convening scheme meeting
Orders made approving supplementary disclosure
Orders made approving scheme

Category: B

Representation:

Counsel:

Plaintiff

J R C Sippe

Solicitors:

Plaintiff

Gilbert + Tobin

Case(s) referred to in decision(s):

Re Amcom Telecommunications Ltd (No 3) [2015] FCA 596
Re Amcom Telecommunications Ltd (No 4) [2015] FCA 720
Re Amcom Telecommunications Ltd [2015] FCA 341
Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
Re Azure Minerals Ltd [2024] WASC 58
Re Beadell Resources Ltd [2018] WASC 410; (2018) 133 ACSR 600
Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
Re Foster's Group Ltd (No 2) [2011] VSC 547
Re Hills Motorway Ltd (2002) 43 ACSR 101
Re International Goldfields Ltd [2004] WASC 112
Re Kangaroo Resources Ltd [2018] WASC 327
Re NRMA Ltd (No 1) (2000) 156 FLR 349
Re Nzuri Copper Ltd [2019] WASC 189
Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
Re Orica Ltd [2010] VSC 231
Re Pacific Energy Ltd [2019] WASC 443
Re Pensana Metals Ltd [No 2] [2020] WASC 17
Re Prime Media Group Ltd [2019] NSWSC 1888
Re Seven Network Ltd (No 3) [2010] FCA 400; (2010) 267 ALR 583
Re SRG Ltd [2018] FCA 1092
Re Wesfarmers Ltd [2018] WASC 308
Re Wesfarmers Ltd [No 2] [2018] WASC 357
Sovereign Life Assurance Co v Dodd [1892] 2 QB 573

HILL J:

Alto Metals Limited (Alto) is an Australian public company listed on the Australian Securities Exchange (ASX). On 1 August 2024, it announced the entry into a Scheme Implementation Deed (SID) with Brightstar Resources Limited (Brightstar).[1] Under the proposed scheme of arrangement,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Alto Metals Ltd

Details

AGLC: Re Alto Metals Ltd [2024] WASC 455
Case: [2024] WASC 455
Decision Date: 3 DECEMBER 2024

CaseChat Overview and Summary

In the matter of Alto Metals Ltd, the Australian Securities and Investments Commission (ASIC) and the company itself sought orders under the Corporations Act 2001 (Cth) to convene a scheme meeting, provide supplementary disclosure, and approve a proposed scheme of arrangement. The company was the subject of a takeover bid by another corporation, and the dispute centred on the fairness and adequacy of the proposed scheme from the perspective of shareholders.

The central legal issues before the court involved whether the requirements under sections 411(1), 1319, and 411(4)(b) of the Corporations Act were satisfied to convene a scheme meeting, order supplementary disclosure, and approve the scheme. Specifically, the court had to determine if the scheme was fair and reasonable, and if it was in the best interests of the shareholders. The court also needed to consider the independent expert's opinion that the scheme, while not fair, was reasonable and beneficial to shareholders.

The court found that the independent expert's report, although indicating that the scheme was not fair, was also clear that it was reasonable and in the best interests of the shareholders. The court was satisfied that the requirements under section 411(1) were met, as the independent expert's opinion supported the conclusion that the scheme was beneficial to shareholders. Additionally, the court held that the supplementary disclosure was necessary to address ASX announcements made by the bidder, and thus made orders pursuant to section 1319. Finally, based on the independent expert's findings and the overall benefit to shareholders, the court approved the scheme under section 411(4)(b).

The court convened the scheme meeting, ordered the dispatch of supplementary disclosure, and approved the proposed scheme of arrangement.

Orders