Re Trilogy International Ltd - [2018] NZHC 580

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000237

[2018] NZHC 580

IN THE MATTER OF AND

IN THE MATTER OF

a scheme of arrangement under Part 15 of the Companies Act 1993

TRILOGY INTERNATIONAL LIMITED

Applicant

Hearing: 28 March 2018

Counsel:

E S Scorgie and R F Wallis for the Applicant S G Schenone and S C D A Gollin for

CITIC China Partners III, L.P.

Judgment:

29 March 2018

JUDGMENT OF EDWARDS J

This judgment was delivered by Justice Edwards on 29 March 2018 at 10.45 am, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Chapman Tripp, Auckland
Minster Ellison Rudd Watts, Auckland

TRILOGY INTERNATIONAL LTD [2018] NZHC 580 [29 March 2018]

Introduction

[1] Trilogy International Ltd (TIL) is a New Zealand limited company listed on the NZX main board and ASX official list. Through its subsidiaries, TIL cultivates essential natural products and home fragrance brands in New Zealand and around the world. These brands include Trilogy, Ecoya, Goodness, Lanocreme and By Nature. Another of TIL’s subsidiaries distributes cosmetics, skincare and haircare brands in New Zealand.

[2] TIL seeks final orders approving a scheme of arrangement under Part 15 of the Companies Act 1993 (Act). The proposed scheme would allow TIL NZ Rose Investments Ltd, a wholly owned subsidiary of CITIC China Partners III, L.P. (CITIC), to purchase TIL’s shares for $2.90 per share (Scheme).

[3] On 22 February 2018 I made initial orders prescribing the process for the Scheme to be put to, and voted on, by TIL’s shareholders (Initial Orders). In accordance with the Initial Orders, the shareholder meeting to vote on the Scheme was held on 14 March 2018. The Scheme was approved by substantially more than the required majorities stipulated in the Act.

[4] CITIC filed a notice of appearance and memorandum of counsel in respect of the application. It does not oppose orders approving the Scheme but counsel appears to address an agreement CITIC reached with The Business Bakery LP (TBB), TIL’s largest shareholder, after the Initial Orders were made.

[5] No other appearances have been filed by any other party, and no notices of opposition have been received.

The Scheme

[6] As noted above, the Scheme will allow TIL NZ Rose Investments Ltd to purchase TIL’s shares for $2.90 per share. The Scheme itself is relatively straightforward. The effect of it is that TIL’s shareholders will exchange their shares for cash. Each shareholder will receive the same consideration for each share that they hold.

[7]The key scheme documents are as follows:

(a)The Scheme Implementation Agreement dated 14 December 2017 between CITIC and TIL. In very simple terms, this agreement prescribes the terms of the Scheme and provides for it to be put to TIL’s shareholders.

(b)The Deed Poll, defined in the Scheme Plan (described below) as the deed poll entered into by BidCo (that is, TIL NZ Rose Investments Ltd) and the bidder (that is, CITIC).…

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 Trilogy International Ltd

Details

AGLC: Re Trilogy International Ltd [2018] NZHC 580
Case: [2018] NZHC 580
Decision Date: 29 March 2018

CaseChat Overview and Summary

Trilogy International Ltd (TIL) sought final orders approving a scheme of arrangement under Part 15 of the Companies Act 1993 for a subsidiary of CITIC China Partners III, L.P. to purchase TIL’s shares. The primary legal issues were whether there had been compliance with the statutory provisions and the court's initial orders, whether the scheme had been fairly put to shareholders, whether shareholders were fairly represented by those who attended the meeting, and whether the scheme was such that an intelligent person of business might reasonably approve it and was it fair and equitable. Justice Edwards found that the scheme had been fairly put to shareholders and that shareholders were fairly represented by those who attended the meeting. The court found that the scheme was such that an intelligent person of business might reasonably approve it and that it was fair and equitable. The court also found that a deed between CITIC and TIL’s largest shareholder did not impact on the scheme. Justice Edwards granted TIL’s application for approval of the scheme.

Orders