Re Beadell Resources Ltd [No 2]
[2019] WASC 53
•22 FEBRUARY 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BEADELL RESOURCES LTD [No 2] [No 2] [2019] WASC 53
CORAM: VAUGHAN J
HEARD: 15 FEBRUARY 2019
DELIVERED : 15 FEBRUARY 2019
PUBLISHED : 22 FEBRUARY 2019
FILE NO/S: COR 220 of 2018
EX PARTE
BEADELL RESOURCES LTD
Plaintiff
AND
GREAT PANTHER SILVER LTD
Interested Party
Catchwords:
Corporations law - Scheme of arrangement - Proposed merger acquisition - Application for orders approving scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 411
Result:
Application granted
Representation:
Counsel:
| Plaintiff | : | A J Papamatheos |
| Interested Party | : | T P O'Leary |
Solicitors:
| Plaintiff | : | Herbert Smith Freehills |
| Interested Party | : | Gilbert + Tobin |
Case(s) referred to in decision(s):
Re Beadell Resources Ltd; Ex parte Beadell Resources Ltd [2018] WASC 410
Re Decimal Software Limited [No 2] [2018] FCA 2040
Re Ecosave Holdings Ltd [No 2] [2015] FCA 1446
Re TriAusMin Limited [No 2] [2014] FCA 833
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357
Re Westgold Resources Ltd [No 2] [2012] WASC 395
VAUGHAN J:
Overview
On 21 December 2018 I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) to convene a meeting of the holders of ordinary shares in Beadell Resources Ltd (Beadell). The meeting was convened to consider a proposed scheme of arrangement. I also made orders approving distribution of a scheme booklet.
The proposed scheme was in the nature of a merger acquisition scheme involving a Canadian company, Great Panther Silver Ltd (Great Panther). Great Panther sought to acquire 100% of Beadell's ordinary shares for a consideration comprising the issue of 0.0619 common shares of Great Panther for each ordinary share of Beadell. The proposed scheme will result in Beadell's shareholders holding 38% of the merged entity.
The scheme meeting was held on 12 February 2019. Beadell's members approved the scheme of arrangement by 96.62% of votes cast and 74.60% of members present in person or by proxy.
On 15 February 2019 I made orders under s 411(4)(b) of the Act approving the scheme. I said that I would prepare written reasons for those orders. These are my reasons for the orders made on 15 February 2019.
Background and additional evidence
Incorporation of earlier reasons
I gave reasons for my 21 December 2018 orders in Re Beadell Resources Ltd; Ex parte Beadell Resources Ltd.[1]
[1] Re Beadell Resources Ltd; Ex parte Beadell Resources Ltd [2018] WASC 410.
I do not intend to repeat what was said in those reasons. These reasons should be read with, and as if they incorporated, my earlier reasons. In particular I rely on what was stated in the earlier reasons as to:
(1)the relevant entities, Beadell and Great Panther (at [1], [7] ‑ [8], [12] ‑ [16]);
(2)the announcement of the merger acquisition proposal (at [2], [8] ‑ [10]);
(3)the nature of the proposed scheme of arrangement (at [2], [9], [17] ‑ [26], [74] ‑ [90]);
(4)the description of the scheme booklet (at [27] ‑ [31], [43] ‑ [55]);
(5)the opinion expressed in the independent expert report (IER) (at [30], [57] ‑ [72]);
(6)the position of Beadell's directors (at [11], [13] ‑ [16], [54]).
There are two things arising from the earlier reasons that should be emphasised.
First, the IER expressed the conclusion that the proposed scheme was not fair but was nevertheless reasonable. That conclusion was based on the distinction between 'fair' and 'reasonable' as provided for in the Australian Securities and Investment Commission's (ASIC's) Regulatory Guide 111: Content of Expert Reports. Overall, however, the IER concluded that the proposed scheme was in the best interests of Beadell's members. Given the opinion as expressed in the IER, I considered the proposed scheme by reference to the IER to determine whether there was some positive compensatory feature resulting in reasonableness. I was satisfied that the matters referred to by the independent experts provided prima facie justification that the proposed scheme was reasonable.
Second, as recorded in the earlier reasons (at [91] - [92]), shortly before the first court hearing Beadell and Great Panther entered into a loan agreement. I examined relevant authorities bearing on such agreements between bidders and targets (at [93] ‑ [94]). On a prima facie basis I was satisfied that the loan agreement would not have a coercive effect by acting as a de facto lock‑up device. I noted, however, that I expected that Beadell would file additional evidence before the second court hearing to address the loan (at [95]).
Additional evidence
Beadell relied on 12 affidavits sworn by seven deponents for the purpose of the first hearing.[2] That material was relied on for the purpose of the second hearing. In addition Beadell relied on the following affidavits:
(1)affidavit of Craig Readhead sworn 12 February 2019. Mr Readhead was the chairperson of the scheme meeting. Among other things Mr Readhead confirmed the proper conduct and outcome of the scheme meeting;
(2)affidavits of David Gray affirmed 13, 14 and 15 February 2019. Mr Gray is Beadell's solicitor. Mr Gray deposed to a number of formal as well as some substantive matters (eg the loan agreement, voter turnout and conferral with the ASIC);
(3)affidavit of Nicole Lewis sworn 13 February 2019. Ms Lewis was the returning officer for the scheme meeting. Ms Lewis confirmed the proper conduct and outcome of the scheme meeting;
(4)affidavit of Nigel Bulling sworn 14 February 2019 as to the maintenance of Beadell's share register and calculation of the proxy vote numbers;
(5)affidavits sworn by employees of various external service proprietors to Beadell who deposed as to the printing and dispatch of the scheme booklet (including the electronic dispatch of the scheme booklet to those members who had nominated for electronic dispatch).[3]
[2] Re Beadell Resources Ltd; Ex parte Beadell Resources Ltd [6].
[3] See affidavit of Justin Edwards sworn 6 February 2019; affidavit of Cassandra Rodgers sworn 8 February 2019; affidavit of John Scott sworn 8 February 2019.
Counsel for Beadell provided comprehensive written submissions dated 14 February 2019. These were amplified by brief oral submissions. Great Panther also appeared by counsel. Counsel for Great Panther limited his submissions to stating Great Panther's support for the orders sought and confirming two particular matters.
Disposition
Applicable legal principles
I identified the applicable legal principles on an application for approval of a proposed scheme of arrangement under s 411(4)(b) of the Act in Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2].[4]
[4] Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357 [11] ‑ [19].
In short, there are two main tasks. First, the court must be satisfied that all statutory and procedural requirements under s 411(4)(b) have been observed. Second, the court must determine in the exercise of its discretion whether to approve the scheme.
On the latter question, acknowledging that the members are better judges of what is in their commercial interests than the court, consideration is usually given to:
(1)whether shareholders voted in good faith and not for an improper purpose;
(2)whether the proposal is fair and reasonable;
(3)whether the scheme proponent has brought all relevant matters to the court's attention;
(4)whether there has been full and fair disclosure to members of all material information;
(5)whether minority shareholders would be oppressed; and
(6)whether the scheme offends public policy.
Formal matters
Beadell's further affidavit evidence established that:
(1)a copy of the court's orders made 21 December 2018 were lodged with the ASIC on 21 December 2018;
(2)a copy of the scheme booklet as approved for distribution was lodged with the ASIC and registered on 21 December 2018;
(3)the scheme booklet was dispatched to Beadell's members on 11 January 2019 in substantial compliance with par 4 of the orders of the court made 21 December 2018. I will address below the two ways in which there was non‑compliance and why those matters did not stand in the way of the approval of the scheme. Only 13 electronic notifications failed. On 16 January 2019 those members were sent a hard copy of the scheme booklet in accordance with par 6 of the orders made 21 December 2018; and
(4)the scheme meeting was held on 12 February 2018 in accordance with pars 3 and 7 to 12 of the orders of the court made 21 December 2018.
I have mentioned that, in effecting dispatch of the scheme booklet, there was substantial compliance with the orders of the court made 21 December 2018. There were two aspects of the distribution of the scheme booklet which did not comply with the orders. In approving the scheme I considered that these matters were minor and amounted to no more than procedural irregularities.
First, in the course of printing the scheme booklet a font corruption error occurred during the importation of the PDF version of the formatted scheme booklet. This resulted in a random character change to some words within the Independent Technical Specialist Report (ITSR). The printing error was not detected until after all of the 3,000 hard copies of the scheme booklet had been printed.
Beadell, with the assistance of its legal representatives, decided to take practical measures to ameliorate the deficiency. A stand‑alone copy of the ITSR was printed together with an 'errata' letter informing shareholders of the printing error and directing them to the additional copy of the report, rather than the corrupted report as included in the scheme booklet. Those materials were included in the dispatch packs and sent to the members. Thus, those members receiving a hard copy scheme booklet received a copy of the ITSR without the printing errors, but it was in a separate document that accompanied the scheme booklet.
The printing error did not affect those Beadell shareholders who received electronic notification. This was the majority of the members by number. There were 2,949 email recipients and 2,754 postal recipients.
Second, due to an inadvertent failure to include a customs declaration in the dispatch packs addressed to overseas shareholders, those packs were not sent on the day they were delivered to Australia Post. There was a four‑day delay in the posting of these packs. The scheme booklets should have been posted on 11 January 2019, but were not dispatched until 15 January 2019. In total some 116 shareholders were affected. A number of them did vote on the scheme resolution in due course.
I was satisfied that, despite these two matters, there was substantial compliance with the court's orders of 21 December 2019. I also considered the two deficiencies to amount to mere procedural irregularities. Accordingly, they did not invalidate the proceedings unless they caused or may cause substantial injustice.[5] There was nothing to suggest that might be the case. Neither matter ‑ both of which were properly brought to my attention by counsel for Beadell ‑ provided a reason to withhold approval under s 411(4)(b).
[5] Corporations Act 2001 (Cth) s 1322(2).
It is usually the case that where there is a failure, or it is anticipated that there will be a failure, to comply with the court's orders convening a scheme meeting, the matter should be brought to the court's attention promptly. That way remedial measures, if necessary, can be put in place. It should always be remembered that the convening of a scheme meeting is under the control of the court, rather than the company promoting the proposed scheme.[6]
[6] Re Ecosave Holdings Ltd [No 2] [2015] FCA 1446 [25] (see also [28]).
In the present matter Beadell did not approach the court about the two difficulties. Had it done so I would have had no hesitation in adopting the practical measures employed by Beadell to address the printing error. I would also have extended time for the dispatch of the 116 scheme booklet packs to be sent overseas.
Where difficulties of the type experienced here arise parties ought, where practicable, to inform the court as soon as possible. Where necessary a hearing may be arranged on short notice. On most occasions, however, it is likely that appropriate orders may be sought and made without the need for a formal hearing. Taking this action at an earlier stage is likely to promote certainty and minimise the issues to be addressed at the second court hearing.
At the scheme meeting the proposed scheme of arrangement was approved by resolution with the required statutory majorities.
As to votes, 96.62% of the votes cast were in favour of the resolution (1,023,270,098 in favour and 32,520,367 against). As to head count, 74.60% of members in attendance by person or proxy voted in favour of the resolution (329 in favour and 112 against). Some 63.09% of the shares on issue were voted.
A turnout for voting of 63.09% of shares on issue is reasonable. Counsel for Beadell drew my attention, however, to the fact that only 441 of 5,312 eligible shareholders in Beadell voted, ie about 8.3% of the eligible shareholders. That is relatively low. I note, however, that there are members' schemes where a lesser turnout has been reported and the scheme has, nevertheless, been approved.[7] Where there is a low shareholder turnout, consideration ought to be given to whether that suggests some procedural irregularity has occurred in dispatch, or alternatively, the vote is not representative.[8]
[7] Re Decimal Software Limited [No 2] [2018] FCA 2040 [20] ‑ [22].
[8] Re TriAusMin Limited [No 2] [2014] FCA 833 [10] ‑ [12].
Two things should be noted about the low turnout in terms of shareholder numbers:
(1)First, the evidence discloses that a large number of Beadell shareholders have small parcels of relatively limited economic value. Some 1,958 shareholders hold shares totalling less than $500 in value. Another 1,541 shareholders hold shares worth between $500 and $2,000. Accordingly, it may be inferred that the scheme was of limited commercial significance to some 65% of the eligible shareholders.
(2)Second, the turnout is considerably better than that which has prevailed at other recent Beadell shareholders' meetings. For example, the 2018 Annual General Meeting of Beadell saw participation in person or by proxy by 277 of 6,926 shareholders (3.99% of eligible shareholders). General meetings in June and October 2018 saw a participation rate of 3.66% and 4.18%, respectively.
Based on this analysis counsel for Beadell submitted, and I accept, that there was not such a low voter turnout as might signify an error in dispatch procedures. That is all the more so given the detailed evidence as to dispatch. Also, I would not discount the overwhelming support for the proposed scheme of arrangements ‑ by votes cast rather than head count ‑ on the basis that the vote is unrepresentative. The circumstance that the turnout is substantially higher than normal belies any inference that shareholders have been deterred from attending or voting at the scheme meeting.
In round terms the position is as follows:
•approximately 61% of the shares issued voted in favour of the proposed scheme;
•approximately 2% of the shares issued voted against the proposed scheme;
•approximately 37% of the shares issued did not vote or abstained.
The shareholders who did vote voted overwhelmingly in support of the proposed scheme of arrangement. The vote against the proposed scheme was relatively small. Substantially more than 50% of the shares on issue supported the proposed scheme of arrangement.
As to other formal matters, notice of the second court hearing was given by way of an advertisement in The Australian newspaper on 11 February 2018. That occurred in compliance with par 13 of the court's orders made 21 December 2018. No party has sought to appear to oppose the approval of the proposed scheme of company arrangement.
Finally, to complete satisfaction of the various formal matters, by letter dated 15 February 2019 the ASIC informed Beadell pursuant to s 411(17) of the Act that it had no objection to the proposed scheme of arrangement.
Accordingly, all statutory and procedural preconditions to the court's approval were satisfied.
Exercise of discretion: usual matters
I was satisfied at the first hearing that the proposed scheme of arrangement was one that was fit for consideration by Beadell's members. A sensible business person might consider that the scheme will be of benefit to the members. In so holding I relied in part on the opinion expressed in the IER and the view of Beadell's directors. I was satisfied that those opinions were reasonably open.
In short, the proposed scheme was one which was open to Beadell's members to adopt.
My conclusions reached at the interlocutory first stage hearing have not altered. I remain satisfied that the proposed scheme is fair and reasonable such that an intelligent and honest shareholder properly informed might approve it. My view is bolstered by the support that has been expressed for the scheme and the absence of any opposition to it.
There are four other matters that I relied on in concluding that the proposed scheme is fair and reasonable in the sense discussed in the authorities.
First, the independent experts provided a 24 January 2019 update to their IER. There was specific consideration of the impact of four circumstances on the valuation and opinions set out in the IER. It was said that three of those did not have a material impact. As to the fourth, the independent experts stated:
As documented in the IER, the valuation of both Beadell and the merged entity are very sensitive to changes in the economic assumptions. The changes in economic assumptions since the date of the IER remain within the valuation sensitivity analysis presented in the IER and did not affect our opinion expressed in the IER.
As required, we will continue to monitor the impact of any changes in economic assumptions and any further information we become aware of, and reserve the right to issue a supplementary report if we consider it necessary.
No such supplementary report has been issued.
Second, in my earlier reasons I noted the financial context in which the proposed scheme had been pursued by Beadell (at [13] ‑ [16], [66] ‑ [68]). The proposed scheme with Great Panther was selected as the best available alternative to provide a solution to Beadell's capital expenditure and debt repayment commitments in the near future. If the proposed scheme was not to be effected, some other action would be required. No other alternative has emerged.
Third, as was confirmed at the scheme meeting, it continued to be the unanimous recommendation of the Beadell board members that shareholders vote in favour of the scheme in the absence of a superior proposal.
Fourth, at the scheme meeting one shareholder questioned Beadell's circumstances and the reasons for its uncertain position. That question was responded to by Beadell's CEO and Managing Director, Dr Adshead‑Bell in these terms:
Dr Adshead‑Bell noted Beadell's share price performance and explained the operational issues Beadell had experienced relating to material movement and plant capacity. She further explained while Beadell believed it had addressed those operational issues, through completion of the plant upgrade and the replacement of the mining contractor on site, the company's balance sheet was weak and that meant operations remained challenging and also that it was challenging to pursue optimisation initiatives. Dr Adshead‑Bell noted that the board and management had investigated a range of potential financing and corporate opportunities to address Beadell's weak balance sheet, and had selected the scheme as the best available alternative in the circumstances. The shareholder also asked about trading in Great Panther shares and Dr Adshead‑Bell confirmed that Beadell shareholders who received Great Panther shares under the scheme would need to find a broker who could execute trades on the TSX or NYSE.
The shareholder was asked whether he was satisfied with the response to his questions. The shareholder confirmed that he was satisfied. Other than that query, which appears to have been answered comprehensively, the materials do not suggest any disquiet or unhappiness as to the terms of the proposed scheme of arrangement.
There is nothing to suggest an absence of good faith or an improper purpose on the part of the members in approving the proposed scheme. Nothing in the scheme is oppressive. Nor is the scheme offensive to public policy. This is a merger acquisition scheme which follows a familiar path employed in numerous schemes of arrangement that have been approved by various courts over the years.
As to disclosure, at the first hearing, based on the evidence then before the court and for the reasons that I gave, I was satisfied that the draft scheme booklet would provide proper disclosure to members. The additional affidavit evidence establishes that the scheme booklet as distributed was substantially in the form approved for distribution by the 21 December 2018 orders. Nothing has arisen to suggest that there has not been full and fair disclosure. For the reasons I gave in approving the draft scheme booklet for distribution, I am satisfied that the scheme booklet as distributed met the requirements under s 411(3) and s 412(1) of the Act.
Otherwise, more generally, there was nothing to suggest that Beadell had not brought to my attention all matters that could be considered relevant to the exercise of the discretion to approve the scheme.
Exercise of discretion: specific matters
Specific matters were drawn to my attention that ought to be recorded.
First, as already mentioned, in my earlier reasons I raised the circumstance that Great Panther had made an advance of US$5 million to Beadell pursuant to a loan agreement. Beadell provided additional evidence before the second court hearing to explain what had happened in relation to the loan agreement.
The loan agreement was intended to be a short‑term arrangement. It provided for repayment on 15 January 2019 with the possibility of a 30‑day extension. However, the principal amount was to be repaid in the event of an expected value added tax (VAT) refund.
A VAT refund of approximately US$10.3 million was received in early January 2019.
The fact of receipt of the VAT refund was announced on the ASX's platform on 10 January 2019. Despite what had previously been agreed, the US$5 million loan from Great Panther was not repaid. Rather, there was partial repayment in an amount of US$3 million together with interest and fees. The maturity date of the remaining US$2 million was extended to 18 March 2019. This too was announced by Beadell on the ASX. The announcement explained that the deferral of the payment of the US$2 million was to provide Beadell with additional funds for general working capital and operating requirements.
Accordingly, as at the date of the scheme meeting: (1) US$2 million remained outstanding by Beadell to Great Panther; and (2) the US$2 million was not repayable until 18 March 2019. This information was readily available to Beadell's shareholders. Indeed, the scheme booklet had informed shareholders that further announcements as to the loan agreement were to be made on the ASX prior to the scheme meeting.
In those circumstances I was satisfied that the loan agreement was not of a character that meant it might have impacted on the shareholders' approval of the proposed scheme. I appreciate that an amount remained outstanding. But it was much reduced from the original US$5 million. In any case the outstanding amount was not immediately repayable. Had shareholders not approved the proposed scheme Beadell would have had over a month to obtain finance to repay the outstanding amount.
Accordingly, I was satisfied that, in the circumstances, the US$2 million loan did not have a coercive effect that impaired a free consideration of the scheme by Beadell's shareholders.
Second, Beadell disclosed that on 7 January 2019 it was served with a creditor's statutory demand in the amount of $321,226.19. On 25 January 2019, Beadell filed - and on its case also served ‑ an application to set aside the statutory demand. However, the alleged creditor denied that there was effective service of the application. Accordingly, on the alleged creditor's case, there had been non‑compliance with the statutory demand and the presumption under s 459C(2)(a) of the Corporations Act 2001 (Cth) had been triggered.
If, in fact, a presumption of insolvency had arisen, there was potentially an 'Insolvency Event' within the definition of that term in the Scheme Implementation Deed (SID). That, in turn, would have meant the potential non‑fulfilment of a condition precedent in cl 3.1 of the SID and cl 3.1(a) of the scheme terms and conditions. However, as drafted, any such occurrence of a 'Beadell Prescribed Occurrence' could be waived by Great Panther.
That is what occurred. By a certificate dated 15 February 2019, as adduced in evidence at the second court hearing, Great Panther certified that all conditions precedent had been satisfied or were waived. In oral submissions before me counsel for Great Panther also informed the court that any failure of the conditions precedent due to possible non‑compliance with the statutory demand was to be treated as waived.
Beadell, by Mr Gray, adduced additional evidence that a commercial settlement as to the statutory demand had been reached on 8 February 2019. In that respect the statutory demand has itself fallen away. And the difficulty as to possible non-fulfilment of the conditions precedent is addressed by the waiver.
Accordingly, in my view, the statutory demand posed no impediment to approval of the proposed scheme. It was, however, appropriate that the issue was brought to the attention of the court.
Third, counsel for Beadell addressed further submissions, both written and oral, as to the circumstance that the independent experts had concluded that the proposed scheme was not fair, but reasonable. I addressed that at length in my earlier reasons (at [58] ‑ [72]). In addition to the observations I made there, I note that in Re Westgold Resources Ltd [No 2] Hall J identified that courts had approved schemes where an expert had opined that the scheme was not fair, but reasonable, and therefore in the best interests of shareholders. This was on the basis that the size of the majority in favour of the scheme permitted the court to infer that the shareholders found the conclusion of the independent experts that the scheme was reasonable, despite being not fair, was persuasive.[9] That is this case.
[9] Re Westgold Resources Ltd [No 2] [2012] WASC 395 [41].
Fourth, counsel for Beadell reminded me that, if the scheme was approved, it was intended to rely on that approval to qualify for exemption under s 3(a)(10) of the Securities Act 1933 (USA). Counsel for Great Panther also informed me that this was Great Panther's intention. That was necessary as one of the requirements for the operation of s 3(a)(10) in practice is that the proposed issuer of the securities must inform the court, whose order is to be relied on, that the issuer will rely on the court's approval in seeking the exemption. Great Panther is the proposed issuer.
I confirm that Great Panther, by counsel, has informed the court that, following approval of the proposed scheme, Great Panther intends to rely on the approval to qualify for the exemption provided by s 3(a)(10) of the Securities Act 1933 (USA).
It is also appropriate that I record the following:
(1)I have sufficient information before me to determine the value of the Beadell shares to be transferred and also the value of the common shares to be issued by Great Panther in the proposed transaction under the scheme of arrangement. In that regard I refer to the opinions set out in the IER as I recounted at pars 65 and 68 of my earlier reasons. The IER has been confirmed by the affidavit of Nicolette Ivory sworn 18 December 2018.
(2)The court has held a hearing to determine whether the terms of the proposed scheme of arrangement are fair to Beadell's shareholders so as to determine whether to approve the terms of the scheme. In this regard, as I have stated earlier, in an application for approval under s 411(4)(b) it is necessary for the court to consider the fairness and reasonableness of the proposed scheme of arrangement. I have done that and determined that the proposed scheme is fair and reasonable. See pars 35 to 44 above.
(3)The hearing for approval of the proposed scheme of arrangement was heard in public, ie in open court. It was open to all Beadell shareholders to attend. Notice of the hearing was provided to all Beadell shareholders in accordance with the orders of the court made 21 December 2018. Reference has already been made to the advertisement of the hearing as placed in The Australian newspaper on 11 February 2019. The date of the second court hearing was also notified in the scheme booklet and mentioned by the chairperson of the meeting at the 12 February 2019 scheme meeting.
Finally, the additional affidavit evidence adduced for the second hearing dealt with the status of the various conditions precedent to the scheme of arrangement. On 11 February 2019 shareholders of Great Panther approved the issue of the scheme consideration to Beadell shareholders. Otherwise, as previously mentioned, the affidavit of Mr Gray affirmed on the morning of the hearing attaches certificates of satisfaction of conditions precedent on the part of both Beadell and Great Panther. The certificates confirm satisfaction or waiver of all conditions precedent other than court approval. Accordingly, the evidence establishes that the only remaining substantive condition precedent is the court's approval under s 411(4)(b) of the Act.
Conclusion: proposed scheme of arrangement approved
In the circumstances I was satisfied that I should approve the proposed scheme of arrangement. I was satisfied that Beadell had met the various statutory and procedural preconditions for approval. I was also satisfied that in the exercise of discretion I should grant approval under s 411(4)(b) of the Act.
Section 411(11) exemption
Beadell sought an exemption from the requirement under s 411(11) of the Act. No ongoing purpose will be served by requiring the orders approving the scheme to be annexed to Beadell's constitution. The orders will be irrelevant once Beadell becomes a wholly owned subsidiary of Great Panther. Accordingly, I made orders under s 411(12) exempting Beadell from this requirement.
Conclusion and orders
I was satisfied that I should approve the proposed scheme of arrangement and make orders substantially in the terms as sought by Beadell.
The orders included the provision of minor alterations to the scheme terms, made under s 411(6) of the Act, to complete a number of details that had not been entered in the version of the scheme that was included in the scheme booklet.
For these reasons I made orders in the following terms:
1.Pursuant to paragraph 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the scheme of arrangement between the Plaintiff, Beadell Resources Limited, and the holders of fully paid ordinary shares in the Plaintiff, in the form contained in Annexure B to the Scheme Booklet (and which is contained in attachment TDG23 to the fourth affidavit of Thomas David Gray affirmed 20 December 2018), be approved (the Scheme), subject to the following alterations in accordance with section 411(6) of the Act:
(a)in clause 2(b) of the Scheme, delete the words '[insert date]' and '[insert number]' and replace those words with the date '15 February 2019' and the number '1,673,584,196' respectively;
(b)in schedule 1, clause 1 of the Scheme, for the definition of 'Implementation Deed, to delete the words '[insert date]' and replace those words with 'on or about 24 September 2018';
(c)in schedule 1, clause 1 of the Scheme, for the definition of 'Scheme Booklet', to delete the words '[insert date]' and replace those words with '21 December 2018'; and
(d)in schedule 1, clause 1 of the Scheme, for the definition of 'Scheme Consideration', to delete the words '[insert number]' and replace those words with the number '0.0619'.
2.Pursuant to subsection 411(12) of the Act, the Plaintiff be exempted from compliance with subsection 411(11) of the Act in relation to the Scheme.
3.The Plaintiff lodge an office copy of these orders with the Australian Securities and Investments Commission on 18 February 2019.
4.The orders be entered forthwith.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EP
Research Associate to the Honourable Justice Vaughan22 FEBRUARY 2019
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