Re Rural Press Ltd

Rural Press Limited brought an application for orders approving two schemes of arrangement, one for its preferred shareholders and one for its ordinary shareholders. The schemes propose that Fairfax Media Limited acquire all shares in Rural Press. Fairfax Media Limited is the majority shareholder of Rural Press. The Australian Securities and Investments Commission has indicated it does not intend to appear on the first hearing. The court had to decide whether the schemes should be approved, considering the financial assistance provided by Rural Press to Fairfax Media Limited for acquiring shares, the disclosure of dividends and the repayment of a credit facility, and the procedural fairness in convening the meetings of shareholders. The court concluded that the schemes should be approved as the financial assistance did not materially prejudice the interests of Rural Press or its shareholders and the disclosure of the material changes in financial position and the repayment of the credit facility were adequate. The court also found that the procedures for convening the meetings of shareholders were fair.

The court ordered that Rural Press convene meetings of preferred and ordinary shareholders to consider the schemes, with specific dates, times, and locations. The chairman of the meetings was to be a non-executive director of Rural Press, with the power to adjourn the meetings. The explanatory statement and proxy forms were to be dispatched to shareholders, with deadlines for returning the proxy forms. Notice of the hearing of any application for an order approving the schemes was to be published in the Sydney Morning Herald. The proceedings were adjourned to a later date for the hearing of any application to approve the schemes. The orders were to be entered forthwith. The terms and conditions of the schemes, including the special provisions for ineligible overseas shareholders, the recent declarations of dividends, and the repayment of the credit facility, were disclosed in the scheme booklet.