Technology Metals Australia Limited v Australian Vanadium Limited

In Technology Metals Australia Limited v Australian Vanadium Limited, the Federal Court was asked to consider a proposed scheme of arrangement under section 411 of the Corporations Act 2001 (Cth). Technology Metals Australia Limited (TMT), a mining company, proposed to be wholly acquired by Australian Vanadium Limited (AVL), another ASX listed mining company. The court was required to decide whether it was appropriate to make orders convening the scheme meeting and dispatching the scheme booklet, as well as whether to approve the scheme at the final hearing.

The court examined the fairness and reasonableness of the scheme, particularly the scheme consideration offered to TMT shareholders. Initially, the scheme proposed that each shareholder in TMT would receive 12 new fully paid ordinary shares in AVL. However, following the first court hearing, the scheme was amended to increase the consideration to 14 shares in AVL. The court considered an independent expert report, which concluded that the scheme was not fair but was reasonable and in the best interests of the shareholders. The court also needed to decide whether it was appropriate to dispatch a supplementary disclosure statement to TMT shareholders to ensure they were not confused by the new material.

At the final hearing, the court was required to decide whether to approve the scheme under section 411(4) of the Corporations Act. The court considered the independent expert report, the changes to the scheme consideration, and the effect of the scheme on various classes of shareholders. The court also noted the alteration of voting intentions by certain shareholders.

The court found that the scheme was fair and reasonable and in the best interests of the shareholders. It approved the scheme and made the necessary orders to facilitate the acquisition of TMT by AVL.