FEDERAL COURT OF AUSTRALIA
Oz Minerals Limited, in the matter of Oz Minerals Limited [2023] FCA 197
File number: VID 47 of 2023 Judgment of: BEACH J Date of judgment: 2 March 2023 Date of publication of reasons: 9 March 2023 Catchwords: CORPORATIONS – scheme of arrangement – scheme concerning shares – s 411(1) of the Corporations Act 2001 (Cth) – first court hearing – orders for convening a meeting of shareholders Legislation: Corporations Act 2001 (Cth) ss 260A, 411, 412 and 1319 Cases cited: Re Amcor Ltd [2019] FCA 346
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Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 76 Date of hearing: 2 March 2023 Counsel for the Plaintiff: Mr P Crutchfield KC and Mr G Ahern Solicitor for the Plaintiff: Gilbert & Tobin Counsel for the Bidder: Mr B Holmes Solicitor for the Bidder: King & Wood Mallesons ORDERS
VID 47 of 2023 IN THE MATTER OF OZ MINERALS LIMITED
OZ MINERALS LIMITED (ACN 005 482 824)
Plaintiff
ORDER MADE BY:
BEACH J
DATE OF ORDER:
2 MARCH 2023
OTHER MATTERS:
A.The Court notes that the requirement to give at least 14 days’ notice of the hearing of this application to the Australian Securities and Investments Commission (ASIC) as set out in s 411(2)(a) of the Corporations Act 2001 (Cth) (Act) has been satisfied.
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 dated 2 March 2023 produced at the hearing.
THE COURT ORDERS THAT:
1.Pursuant to s 411(1) and s 1319 of the Act, the plaintiff (OZ Minerals) convene and hold a meeting of its shareholders (Scheme Meeting):
(a)for the purpose of considering and, if thought fit, approving (with or without alteration or condition), the scheme of arrangement (Scheme) proposed to be made between OZ Minerals and its shareholders (OZ Minerals Shareholders), the terms of which are set out in Annexure B to these orders; and
(b)to be held on 13 April 2023 at 10:00am (Adelaide time) / 10:30am (Melbourne time) and to be conducted at…
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- AGLC
- Re Oz Minerals Ltd [2023] FCA 197
- Case
- [2023] FCA 197
- Decision Date
CaseChat Overview and Summary
The court determined that the scheme's terms were appropriate, and the funding arrangements were satisfactory. The court also considered the performance risk, exclusivity provisions, break fee, deemed warranties, and other factors. The court concluded that the scheme met the necessary criteria for approval, including the requirement that shareholders be properly informed. Consequently, the court granted the orders to convene the shareholders' meeting and approved the scheme of arrangement. The final orders mandated the convening of the shareholders' meeting, the method of communication with shareholders, and the process for voting on the resolution to approve the scheme. The meeting was set to take place on 13 April 2023, with shareholders receiving necessary documentation and proxy forms in advance.
Orders
Orders of the court
1. Pursuant to s 411(1) and s 1319 of the Act, the plaintiff (OZ Minerals) convene and hold a meeting of its shareholders (Scheme Meeting):
(a) for the purpose of considering and, if thought fit, approving (with or without alteration or condition), the scheme of arrangement (Scheme) proposed to be made between OZ Minerals and its shareholders (OZ Minerals Shareholders), the terms of which are set out in Annexure B to these orders; and
(b) to be held on 13 April 2023 at 10:00am (Adelaide time) / 10:30am (Melbourne time) and to be conducted at 2 Hamra Drive, Adelaide Airport, Adelaide, South Australia and through an online platform at https://meetings.linkgroup.com.ozlscheme23.
2. Pursuant to s 411(1) and s 1319 of the Act, the Scheme Meeting be convened by sending on or before 10 March 2023 (to those OZ Minerals Shareholders appearing on OZ Minerals’ register of members as at 3 March 2023):
(a) an email to each OZ Minerals Shareholder who has elected to receive the Scheme materials from OZ Minerals electronically (Email Recipient) (or, in the case of joint holders, to the holder whose name appears first in OZ Minerals’ register), such email (Email Notification) to be substantially in the form which appears at pages 12 to 14 of Annexure NCP-2 to the affidavit of Neil Clarence Pathak sworn 2 March 2023 (Second Pathak Affidavit) and which contains hyperlinks to:
(i) a website at which a copy of a document substantially in the form of the document which is at pages 100 to 595 of Annexure NCP-1 to the affidavit of Neil Clarence Pathak sworn 1 March 2023 (Scheme Booklet) (which contains, amongst other things, the Notice of Scheme Meeting at Appendix A and the proposed Scheme of Arrangement at Appendix C) and details of the Scheme Meeting can be accessed;
(ii) an online software platform (Online Platform) accessible by the Email Recipient; and
(iii) a website through which each Email Recipient can electronically access their personalised proxy form and lodge proxy instructions in relation to their shareholding for the Scheme Meeting online;
(b) to each OZ Mineral Shareholder who has elected to receive the Scheme materials from OZ Minerals by pre-paid post or by prepaid airmail (Postal Recipients) a:
(i) physical copy of the Scheme Booklet;
(ii) personalised proxy form; and
(iii) pro forma letter from the Chairman of OZ Minerals providing a link to a website at which the Scheme Booklet can be viewed and downloaded online, along with details of the Scheme Meeting and proxy appointment substantially in the form which appears at pages 15 to 16 of Annexure NCP-2 to the Second Pathak Affidavit (Shareholder Letter); and
(iv) reply-paid envelope addressed to Link; and
(c) to each OZ Mineral Shareholder who has not made a relevant election in relation to receipt of the Scheme materials and by default will be receiving by pre-paid post or by prepaid airmail to the address of that OZ Minerals Shareholder:
(i) a personalised proxy form;
(ii) the Shareholder Letter; and
(iii) a reply-paid envelope addressed to Link.
3. If OZ Minerals (through its share registry services provider, Link) receives an automatic electronic “bounce back” notification that the Email Notification was not able to be delivered to the nominated electronic address of any Email Recipient (Undelivered Email Recipient), those Email Recipients be sent:
(a) a personalised proxy form;
(b) the Shareholder Letter; and
(c) a reply-paid envelope addressed to Link.
4. The personalised proxy form referred to in Order 2(a)(iii), 2(b)(ii), 2(c)(i) and 3(a) shall be substantially in the form of Oz Minerals’ Exhibit 1 tendered in this proceeding.
5. The documents referred to in Order 2(b), 2(c) and 3 be sent:
(a) in the case of OZ Minerals Shareholders whose registered address is within Australia, by pre-paid ordinary post addressed to the relevant address recorded in OZ Minerals’ register; and
(b) in the case of OZ Minerals Shareholders whose registered address is outside Australia, by pre-paid airmail addressed to the relevant address recorded in OZ Minerals' register.
6. At various times up to and by no later than 11 April 2023, the documents referred to at Orders 2(a) to 2(c) be sent to those OZ Minerals Shareholders who come onto the OZ Minerals register of members between 4 March 2023 and 7 April 2023, in the manner described in Order 2(a) and 5 as applicable.
7. OZ Minerals cause a copy of the Scheme Booklet to be provided to any OZ Minerals Shareholder if requested by them before the date of the Scheme Meeting.
8. OZ Minerals may arrange to send, on a date to be determined by OZ Minerals:
(a) to Email Recipients, a reminder to vote email, substantially in the form which appears at pages 69 to 71 of SF-1 to the affidavit of Steven Fulton sworn 1 March 2023 (Fulton Affidavit);
(b) to Postal Recipients, a reminder to vote postcard, substantially in the form which appears at pages 17 to 18 of Annexure NCP-2 to the Second Pathak Affidavit; and
(c) to those OZ Minerals Shareholders who have provided Link with a mobile number, a reminder to vote SMS, in substantially the same form as the text which appears at page 74 of Annexure SF-1 to the Fulton Affidavit.
9. Compliance with r 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) be dispensed with, except in so far as that rule applies to r 75-15(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth).
10. Subject to these orders, the Scheme Meeting be convened, held and conducted in accordance with the provisions of:
(a) Part 2G.2 of the Act (save for any replaceable rule) that apply to a meeting of OZ Minerals’ members; and
(b) OZ Minerals’ constitution that apply in relation to meetings of members and that are not inconsistent with Part 2G.2 of the Act.
11. Voting on the resolution to agree to the Scheme be conducted by way of poll.
12. As set out in the Notice of Meeting substantially in the form contained in Appendix A of the Scheme Booklet, OZ Minerals Shareholders who are eligible to vote at the Scheme Meeting will be those OZ Minerals Shareholders recorded in the register of members of OZ Minerals as at 7:00pm (Melbourne time), 11 April 2023.
13. 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 its terms and received by OZ Minerals by 10:00am (Adelaide time) / 10:30am (Melbourne time) on 11 April 2023.
14. Rebecca Joy McGrath or, failing her, Andrew Gregory Cole, be Chairman of the Scheme Meeting.
15. The Chairman of the Scheme Meeting has the power to adjourn the Scheme Meeting to such time, date and at such place (including electronically) as the Chairman considers appropriate.
16. OZ Minerals publish in The Australian newspaper once on or before 11 April 2023 an advertisement substantially in the form of Annexure A to these Orders and OZ Minerals otherwise be relieved from compliance with r 3.4 and Form 6 of the Rules to the extent necessary.
17. The further hearing of the Originating Process is adjourned to the Honourable Justice Beach at 9:30am (Melbourne time) on 17 April 2023 or as soon thereafter as the business of the Court allows.
18. OZ Minerals have liberty to apply on 3 days’ notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
Notice of hearing to approve scheme of arrangement
TO all the members of OZ Minerals Limited (ACN 005 482 824) (OZ Minerals):
TAKE NOTICE that at 9:30am (Melbourne time) on 17 April 2023, the Federal Court of Australia (Victorian Registry) at 305 William Street, Melbourne, Victoria, 3000 will hear an application by OZ Minerals seeking the approval of a scheme of arrangement between OZ Minerals and its members (the Scheme) as proposed by a resolution to be passed by the members of OZ Minerals at the meeting to be held at 10.00am (Adelaide time) / 10:30am (Melbourne time) on 13 April 2023.
If you wish to oppose the approval of the compromise or arrangement, you must file and serve on OZ Minerals a notice of appearance, in the prescribed form, together with any affidavit upon which you wish to rely at the hearing. The notice of appearance and affidavit must be served on OZ Minerals at its address for service at least 1 day before the date fixed for the hearing of the application.
The address for service of OZ Minerals is OZ Minerals Limited, 2 Hamra Drive, Adelaide Airport, South Australia 5950, Australia (Attention: Company Secretary; Email: Julie Athanasoff@ozminerals.com)
ANNEXURE B
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
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Ratio Decidendi
Legal Principle Established
I then addressed in turn two questions in the context of the scheme in that case, being “Is the Scheme fit for consideration?” and “Will shareholders be properly informed?”. It is appropriate to pose the same questions here and to apply the observations that I have just set out.Is the Scheme fit for consideration? As to the first question, various matters have been drawn to my attention with particular focus on the following:(a)the terms of the Scheme;(b)funding of the scheme consideration;(c)performance risk;(d)the exclusivity provisions; (e)the break fee and reverse break fee;(f)the deemed warranties provision;(g)performance rights and employee incentives;(h)benefits payable to Mr Cole;(i)the question of separate classes in terms of the treatment of performance rights and cash incentives;(j)the recommendation of the directors and the associated question of director benefits in the form of performance rights and cash benefits; and(k)the special dividend and the associated question of financial assistance. I propose to only address in these reasons matters (a) to (c) and (g) to (i). As to the break fee and reverse break fee, they are just under the relevant 1% of the equity value of OZ Minerals as at the date of the SID. Further, the relevant exclusivity provisions contain the necessary fiduciary carve-outs where relevant. Further, the deemed warranties are standard. Further, I am satisfied that Mr Cole can give a recommendation notwithstanding his interest which has been adequately disclosed (see Re DWS Ltd (2020) 148 ACSR 616 at [42] to [49]). Further and as I have already touched on, I am satisfied that the special dividend does not constitute financial assistance for the purposes of s 260A; see Re Citadel Group Ltd (2020) 148 ACSR 598 at [47] to [53] and Re RXP Services Ltd [2021] FCA 38 at [49] to [57] where I discussed analogous scenarios. Let me turn then to some aspects of the Scheme.The Scheme A scheme shareholder is an OZ Minerals shareholder recorded in the register as at the record date which is 7.00pm on the fourth business day after the effective date. On the current timetable, the proposed scheme record date is 24 April 2023. The implementation date is defined in the Scheme to mean the fifth business day after the record date. On the current timetable, the proposed implementation date is 2 May 2023. Given the size of the transaction, it is important that I note the following mechanical terms of the Scheme as regards the provision and payment of the scheme consideration and the transfer of the scheme shares to BHP. BHP’s obligation to provide the scheme consideration is to be satisfied by BHP depositing or procuring the deposit in cleared funds an amount equal to the aggregate scheme consideration (less the relevant withholding amount) into the relevant trust account before noon on the business day before the implementation date. On the implementation date, and subject to BHP providing the aggregate scheme consideration, OZ Minerals must pay or procure payment to each scheme shareholder from the relevant trust account of the proportion of the scheme consideration attributable to that scheme shareholder.