Re Trustpower Ltd
[2016] NZHC 2499
•19 October 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-001768 [2016] NZHC 2499
UNDER Part 15 of the Companies Act 1993 IN THE MATTER OF
an application for orders approving a scheme of arrangement under s 236 of the Companies Act 1993
TRUSTPOWER LIMITED First Applicant
BAY ENERGY LIMITED Second Applicant
TILT RENEWABLES LIMITED Third Applicant
TARARUA WIND POWER LIMITED Fourt Applicant
Hearing: 18 October 2016 Appearances:
S A Armstrong and A J Nelder for Applicants
Judgment:
19 October 2016
JUDGMENT (NO 2) OF FOGARTY J
This judgment was delivered by Justice Fogarty
On 19 October 2016 at 3.00pm Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors:
Russell McVeagh, Auckland
RE TRUSTPOWER LTD [2016] NZHC 2499 [19 October 2016]
[1] This is an application brought under Part 15 of the Companies Act 1993 for approval by the High Court of a demerger of Trustpower Limited by way of a scheme of arrangement.
[2] In my judgment of 9 August last,1 I approved the draft interlocutory orders being the initial orders governing the process under Part 15 of the Companies Act. As explained in that judgment, particularly at paragraph [3], the purpose of the High Court approval of those orders is to ensure that the appropriate information about the proposed scheme of arrangement will be provided to the shareholders prior to their voting on the merits of the scheme. In all, a total of 28 orders were made, which form part of that judgment of 9 August.
[3] For the purposes of this judgment, a brief summary of the scheme of arrangement is that Trustpower will transfer its business to two stand-alone companies:
(a) Trustpower will transfer its business to two standalone companies:
(i) TANZL (and its subsidiaries) will hold Trustpower’s Australia and New Zealand wind assets as well as all wind and solar development projects. Certain New Zealand wind assets will be held by Tararua Wind, which will be a wholly owned subsidiary of TANZL.
(ii) BEL (and its subsidiaries) will continue to operate Trustpower’s hydro electricity generation assets and Trustpower’s multi-product retail business which involves the supply of electricity, gas and telecommunications services to customers throughout New Zealand under the “Trustpower” brand.
(b) Both BEL and TANZL will be listed on the NZX [New Zealand Stock Exchange], and it is anticipated that TANZL will also be listed on the ASX [Australian Stock Exchange].
(c) Trustpower will be liquidated. Trustpower’s shareholders will receive one share in each of BEL and TANZL for each Trustpower share held at the Record Date.
[4] In addition to seeking these orders approving the demerger, the application for final a order includes ancillary orders to effect the demerger by providing:
1 Re Trustpower Ltd [2016] NZHC 1838.
(a) For the transfer or vesting of Trustpower’s relevant real or personal “property, assets, rights, powers, interests, liabilities, contracts and engagements” so that it can be placed into liquidation on a solvent basis, leaving the shares in BEL and TANZL as the only remaining assets available for distribution by the liquidators; and
(b) Directions to protect shareholders in respect of the liquidation and expedite the in specie distribution by the liquidators on the same day as their appointment.
[5] Pursuant to the orders made by this Court in August, the demerger was approved at a meeting of shareholders, held on 9 September, by a majority of 99.06 per cent of the shares entitled to vote who voted on the demerger (and 84.81 per cent of the total number of votes able to be cast by all those shareholders entitled to vote). I have received affidavit evidence that all the requirements of the orders made in August have been satisfied.
[6] It is obvious from the above figures that a very large majority of the shareholders approved the demerger. Nonetheless, a number of shareholders disagreed. First, one shareholder explained his or her disagreement on the basis that the share price for Trustpower slid after the announcement on the Stock Exchange of the demerger proposal. Second, another Trustpower shareholder left an adverse comment relating to the demerger on a proxy form regarding a resolution to reappoint Trustpower’s existing directors in respect of Trustpower’s annual meeting (being a different meeting from the special meeting in which the demerger resolution was put to the shareholders). Other than this comment, there has been no further correspondence from the shareholder.
[7] No opposition to the demerger has, however, been filed since the resolutions at the shareholder meeting. The initial orders made in August required the shareholders who opposed the demerger to file and serve a notice of opposition and any supporting affidavits and/or memoranda on Trustpower by 5pm on 26 September
2016. Those orders also required that any other person who considers they have a proper interest in the demerger who wish to appear and be heard on the application of final orders are required to file and serve an application for leave (in addition to the other documents set out above), by the same 26 September 2016 deadline.
[8] No notice of opposition has been received by this Court. Counsel for Trustpower advise that Trustpower is not aware of any party who seeks to formally oppose the merger.
[9] In addition to this assurance from counsel, the Court has received an affidavit from Mr Ridley-Smith, the Chairman of Trustpower, and from Mr MacDuff detailing compliance with the initial August 2006 orders. A very minor slippage in the detail of those orders is noted. For example, the proposed liquidators were provided with a copy of the shareholder materials, nine working days before the date of the shareholder meeting rather than the ten working days specified by the initial orders. Three approved notices (out of approximately 2,400) were sent out outside of the timeframe specified in the initial order. In both cases, these non-compliances were due to an accidental oversight and do not (in accordance with initial order 17) constitute a breach of the orders.
[10] Trustpower is a code company for the purposes of the Takeovers Code. Accordingly, s 236A of the Companies Act required notification to the Takeovers Panel (the Panel) of the application. The Court has received affidavit evidence that the Panel was engaged early on to obtain confirmation that it did not object to the Court approving the demerger. As is recorded in the August judgment, the Panel issued a preliminary letter of intention to issue a no objection statement on 18 July. The final no objection statement was provided by the Panel to Trustpower on 19
September 2016.
[11] By affidavit evidence, it has been proved to the Court that Trustpower has engaged with all the necessary regulators and other Government entities prior to demerger. All necessary regulatory approvals in relation to the transfer of assets and liabilities have now been obtained, or are (in the case of the TANZL and BEL’s application) to be declared an electricity operator by Ministry of Business, Innovation and Employment awaiting final formal approval.
[12] Mr Ridley-Smith has advised that the Electricity Authority sought an amendment to the application for final orders in order to make clear that all of Trustpower’s rights, liabilities, obligations and related duties under the Electricity
Industry Act 2010 (the EIA) and the regulations made under this Act and the Electricity Industry Participation Code 2010 (the Code) transfer to BEL on the implementation date. On this basis, this additional order is included and the Electricity Authority has confirmed by its solicitors that they have no objection to the final orders. I should note these are additional orders being made under s 237 of the Companies Act.
Contracts being transferred outside the scheme of the Act
[13] Part 15 of the Act gives the Court a broad power to transfer all of
Trustpower’s contracts on whatever terms and conditions the Court thinks fit.2
However, Trustpower elected to take the more onerous route of obtaining deeds of novation in respect of certain categories of contract. These included contracts with a foreign counterparty where the governing law is that of a country other than New Zealand, leases where it is important that Trustpower obtain a full release from the lessor, contracts of a personal nature including all employment contracts, contracts that prohibit transfer by order of the Court, and certain other service contracts. It is not part of the task of this Court to oversee the novation of those contracts. It is not necessary, in any event, because a novation is just that, a new contract which can only be entered into when all the parties are willing to be so bound.
Outstanding litigation
[14] On 9 August 2016, the New Zealand Commerce Commission filed seven charges under the Fair Trading Act in the Auckland District Court against Trustpower, relating to the marketing and sale of its bundled electricity and unlimited data broadband offer. Trustpower pleaded guilty to those charges and was fined $390,000 at a sentencing hearing on 22 September 2016. That fine has been paid and will not affect the demerger. There are two other High Court proceedings in train at the present time, in both of which Trustpower is the plaintiff. Under these
orders there was an assignment of Trustpower’s rights and its entitlement to, and
2 Re Prefsure Life Ltd HC Auckland CIV-404-6066, 5 November 2004; Re Farmers Mutual Insurance Ltd HC Wellington CIV-2006-485-966, 26 June 2006; Re Swiss Re Australia Ltd HC Auckland CIV-2004-404-5838, 89 December 2004; Re Munich Reinsurance America Inc HC Auckland CIV-2010-404-7995, 11 February 2011.
liability for, costs to transfer to BEL, TANZL or Tararua Wind (in accordance with paragraph 3(a) and 3(b) of the attached Final Order.
Amendments to the application
[15] As already noted at [12], an additional paragraph 3(f) has been included in the attached Final Orders at the request of the Electricity Authority (the EA order). The effect of this order is to clarify and remove any doubt that the orders transferring Trustpower’s assets and liabilities also effect the transfer of all rights, obligations, liabilities and related duties under the EIA, regulations under the EIA, and the Code.
The test for approval
[16] In her recent judgment in the matter of Re Nuplex Industries3 delivered on 22
July, Katz J has usefully set out the four part test now to be applied by the Court in order to decide whether or not to exercise its discretion to approve this scheme:
[10] The four-part test to be applied by the Court when deciding whether or not to exercise its discretion to approve a scheme under s 236 of the Act is well-established and was articulated in Re CM Banks Ltd as follows:
(a) there has been compliance with the statutory provisions as to meetings, resolutions, the application to the Court, and the like;
(b) the scheme has been fairly put to the class or classes concerned, and that if a circular or circulars have been sent out, as is usual, whether before or after the making of the application to the Court, they give all the information reasonably necessary to enable the recipients to judge and vote upon the proposals;
(c) the class was fairly represented by those who attended the meeting and that the statutory majority are acting bona fide and are not coercing the minority in order to promote interests adverse to those of the class whom they purport to represent; and
(d) the arrangement was such that an intelligent and honest person of business, a member of the class concerned, and acting in respect of his or her interest, might reasonably approve it.
3 Re Nuplex Industries [2016] NZHC 1677.
[11] As most recently observed in Re Auckland International Airport and Re ACS (NZ) Ltd, the Court also needs to consider, with respect to the fourth limb of the Re CM Banks test, whether the proposed arrangement is generally fair and equitable. This is because, particularly where there are competing interests, it is implicit in the test of the intelligent and honest business person that a proposed scheme is also fair and equitable.
(Footnotes omitted).
Has there been compliance with the relevant statutory provisions?
[17] I am satisfied on the basis of the comprehensive affidavit evidence that has been filed and the analysis of those affidavits and submissions of counsel that Trustpower has complied with all of the applicable statutory provisions and the initial orders. I am satisfied, particularly from my examination of the proposed materials in the first judgment, that the scheme has been fairly put to the shareholders of Trustpower. The judgment that they had all of the information reasonably necessary to judge and vote on the proposals is incorporated in my first
judgment.4 The percentage number of available votes cast discussed above
demonstrates that there was a very large representation and exercise of the right to vote by all the available votes.
[18] The last element which calls for judgment by the Court is also resolved by the sheer number of the shareholders who voted in favour of the demerger. Were there a significant difference of opinion say, a case where 75 per cent of the votes of the shareholders were in favour, but a significant proportion in excess of 20 per cent of the voters were against it, the Court would need to scrutinise this fourth test carefully. But where, as here, there is almost overwhelming approval of the demerger cast by voters, given what is at stake, it can be presumed that the shareholders have considered the matter in a businesslike, intelligent fashion, and this Court can take that vote as a proxy for confirmation that an intelligent and honest person in business, and a member of the class concerned enacting in respect of his interests, might reasonably approve it, and did by an overwhelming majority
approve it. A similar conclusion was reached by Katz J where the majority was
4 Re Trustpower Ltd, above n 1, at [4]-[5].
smaller at 76.92 per cent. Nonetheless the Judge recorded: “The resolution was
approved overwhelmingly at the scheme meeting”.5
[19] I have already covered off the other mandatory requirement – the consideration of the views of the Panel and recorded that the Panel does not object to Final Orders being granted in respect of this demerger, as required by s 236A of the Companies Act.
[20] I am also satisfied that a demerger separating out the wind energy generation business is one that an intelligent and honest person in business might reasonably approve as that mode of generation is not homogeneous with Trustpower’s other generation.
The South Australia outage event
[21] The foregoing 20 paragraphs were my analysis of the situation prior to a severe storm striking South Australia leading, on 28 September 2016, to a resulting state-wide power outage event (the outage event).
[22] Trustpower’s South Australian assets are known as the Snowtown Stage I and Snowtown Stage II wind farms. They withstood the extreme weather event undamaged. However, two groups of the wind farms disconnected from the transmission network because of the storm. This was due to the wind farm turbines’ internal protection software. The software was set in line with manufacturer guidelines and registered that the turbines had reached the maximum number of fault “ride through” events. These are events where the wind farm remains connected to the transmission grid despite transient faults to transmission.
[23] The severe storm did damage transmission and distribution electricity assets in South Australia. Multiple transmission faults occurred in a very short time, resulting in the loss of three major transmission lines north of Adelaide. The cascading effect of multiple faults tripped the automatic-protection mechanism of the
main Victoria inter-connector leading to South Australia being temporary without
5 Re Nuplex Industries, above n 3, at [17]. See also [24], [25] and [26] of Katz J’s judgment.
power. Less than 12 hours later, about 80-90 per cent of electricity supply was restored with transmission substantially restored by 9pm on Friday 30 September. As this was the first black system event in Australia since the mid-1950s, the outage was subject to greater than normal media and political attention.
[24] Coming back to the disconnection of several wind farms, the Court has been informed by the chairman of Trustpower that not all wind farm owners or, for that matter, the Australian Energy Market Operation (the AEMO), knew of the existence of the software settings that led to the turbines disconnecting from the transmission grid.
[25] At 11am, New Zealand standard time on 5 October, approximately half an hour before the Due Diligence Committee was due to have their final meeting, before the hearing in this Court of the Application for Final Orders, the AEMO published a preliminary report on the outage event. The Court has been provided with a copy of that preliminary report. That report advised:
The weather resulted in multiple transmission system faults. In the short time between 16:16 and 16:18, system faults included the loss of three major
275kV transmission lines north of Adelaide.
Generation initially rode through the faults, but at 16:18, following an extensive number of faults in a short period, 315MW of wind generation disconnected (one group at 16.18.09, a second group at 16:18:5, also affecting the region north of Adelaide.
The uncontrolled reduction in generation resulted in increased flow on the main Victorian interconnector (Heywood) to make up the deficit.
This resulted in the Heywood Interconnector overloading. To avoid damage to the interconnector, the automatic-protection mechanism activated, tripping the interconnector. In this event, this resulted in the remaining customer load and electricity generation SA being lost (referred to as a Black System).
This automatic protection operated in less than half a second at 16.18. The event resulted in the SA regional electricity market being suspended.
…
Restoration of electricity supply started in Adelaide at 19:00. By midnight on Wednesday 28 September 2016, 80-90% of electricity (that could be restored) was restored.
[26] As the above extract records, a contributing factor in the overall event was the disconnection of two wind farms due to the turbines’ internal protection software. The Court received an affidavit from the chairman of the Board of the Directors of Trustpower, Mr P M Ridley-Smith. He explained that the software was set in line with manufacturers guidelines (Suzlon and Siemens) and registers that the turbines had reached the maximum number of fault “ride through” events (i.e. events where the wind farm remains connected to the transmission grid despite transient faults to transmission.
[27] On 5 October 2016, the Trustpower Board decided to pause the demerger for three reasons:
(a) The South Australian energy market was operating, by Ministerial Decree, under suspension and there was no timeline for that suspension for be lifted;
(b)It needed to be certain that the TANZL Funding Arrangements were still available; and
(c) It otherwise needed to determine if the outage event might cause it to change its mind on the merits of the demerger, including being sure that, on a standalone basis, TANZL could give effect to these matters relevant to it described in the AEMO scheme booklet.
[28] Trustpower has given specific regard to Snowtown Stage II’s failure to “ride through” the storm. The concern was whether the software installed by the turbine manufacturer, while being necessary for the protection of the turbine, was permitted by the electricity market rules (given that it resulted in the wind farms tripping off).
[29] This issue Mr Ridley-Smith reports, has been investigated since this outage event by the turbine manufacturers for all the wind farms in South Australia. The software of the turbines has been reset to a level that the manufacturers are generally comfortable will still provide the necessary protection to the turbines, but which is
expected to allow the wind farms to continue to be despatched in an equivalent future outage event.
[30] Included in this process, was the obligation on Trustpower to provide certificates to its banking group as to no events of default or potential events of default or any misrepresentation subsist in relation to major representations and major defaults. For these reasons, TANZL had a direct financial interest to understand whether it was in a position to give those certifications. It has now decided that it can give these assurances. This decision was made on 14 October when the Trustpower Board met and unanimously resolved to proceed with the demerger, subject to receiving a confirmation from the TANZL board (which it has).
[31] The Board particularly concluded that the outage event did not damage TANZL’s South Australian assets. It also reached a number of other conclusions. It is not necessary to list them all, but essentially, the board having worked through the issues, concluded that the outage event does not change the compelling rationale for the demerger which remains in the best interests of shareholders of Trustpower.
[32] The Court was informed by Mr Ridley-Smith that Trustpower was not aware of any shareholder or other interested party who has, in the light of the delay to the demerger, expressed an intention to oppose the Final Orders.
In particular, Trustpower has not received any further correspondence from any party to the [email protected] email address regarding the SA Outage Event (and has received only one further email to the emails outlined earlier which was a (discussed in the August judgment) query relating to the issue of retail bonds).
[33] Having decided to continue with the demerger, the Court received an application to proceed to forming a judgment on Final Orders urgently in order to maintain the timetable necessary to ensure certainty of the bank funding, because TANZL will lose its certainty of bank funding if the demerger has not occurred by 31
October 2016.
[34] On 17 October, having examined the affidavit of Mr Ridley-Smith, reporting the above, I considered that I did not fully understand it and needed the benefit of a further hearing.
[35] I requested in advance of the hearing that I needed the assistance of counsel and an engineer to talk me through the technical aspects of the third affidavit of Mr Ridley-Smith, and that I would also prefer Mr Ridley-Smith also to be present.
[36] I advised that, but for the outage event, my analysis prepared before that event was in favour of granting the application for Final Orders.
[37] On 18 October, I conducted a hearing of an informal character by way of conference, but recorded. I heard from a Trustpower engineer, Mr C D Delmarter who explained some of the technical aspects of the affidavit of Mr Ridley-Smith. I also heard from Mr Ridley-Smith and I had the benefit of counsel for Trustpower, Ms Armstrong, Mr Nelder, and its solicitor, Mr J M Windmeyer.
[38] Mr Delmarter gave me a better understanding of the outage event. The three transmission lines had failed in wind conditions of approximately 111 kilometres per hour. A not particularly foreseeable event. The failure of these transmission lines left the system in a weakened state which was exacerbated by the increased flows of electricity from the state of Victoria. Also, as recorded above, the ultimate outage was contributed by the computer systems on some of the wind farms reacting to the extraordinary events and shutting down the wind farms in order to protect them.
[39] This was the first electricity outage in South Australia for 50 years. It was, and remains, a major event. Mr Delmarter confirmed the draft AEMO report indicated that it will be subject to intensive investigation. Further, Mr Ridley- Smith’s third affidavit reports:
The software has been reset to a level that manufacturers are generally comfortable will still provide the necessary protection to the turbines.
[40] There are prudent statements in the affidavit based on recognition that the whole event will be subject to intensive examination over a considerable period of time.
[41] Mr Ridley-Smith also pointed out that there is an ongoing relationship between the manufacturers of Trustpower’s wind farms, Suzlon and Siemens, including having in Australia technicians employed by the manufacturers engaged in
the maintenance and service of these wind farms, and the usual warranties and contractual obligations apply. In short, the manufacturers have a direct interest in the ongoing performance of the wind farms, just as the owners of the wind farms do.
[42] What is clear from the events so far, is that the wind farm assets performed as designed. The outage was ultimately caused by the failure of three transmission lines.
[43] Mr Delmarter explained that as a result of the investigations of the outage event, there would be scrutiny of the operation of the wind farms and that might result in technical changes to the way in which they operate and potentially to their asset life.
[44] Mr Ridley-Smith reported that Trustpower has been engaging with its financiers explaining the event to them and that the financing arrangements remain in place. The board of Infratil still has confidence in this overall demerger.
[45] At the conference, yesterday, Mr Ridley-Smith reported minor change in the share market price since the event. The market is currently soft. That movement has to be seen against the overall softness of the stock market at the present time, and is insignificant for the purposes of this analysis.
[46] I have been examining the consequences of the outage event from a perspective of examining Trustpower’s review of the event, before exercising the Court’s discretion to approve the scheme under s 236.
[47] I am satisfied that Trustpower and Infratil (51% shareholder), with their own interests directly at stake, have urgently considered this matter. They have kept the confidence of the syndicate of banks who are providing a facility of Australian $715 million. I take notice that there has been no adverse reaction in the stock market. Nor has there been any shareholder reaction, let alone any significant shareholder asking for a pause in the Scheme of Arrangement’s progress.
[48] In my view, an event, although extraordinary, is to be disregarded if it does not have the effect of disturbing the merits of the plans following demerger in the future. In such a case, the event becomes incidental and does not merit the Court taking the extraordinary step of aborting the demerger process.
[49] The outage is an extraordinary incident, but of insufficient consequence to the demerger, such as to derail the statutory process or to justify any alteration to the process, beyond the scrutiny that I have given to it. Accordingly, for these reasons, I conclude that the outage event does not disturb my analysis prepared in advance, which was in favour of approving the arrangement.
[50] There is no basis for the Court intervening with the process mandated by the Act, by making any extraordinary order, bringing the current process under s 236 of the Companies Act to an end and requiring it to start again. In short, I can see no reason for requiring a reconsideration of the Scheme of Arrangement.
Decision
[51] Accordingly, this Court makes the orders as sought in the Amended Originating Application for Orders dated 28 September, as attached to this judgment. There is leave to apply to the Court for any change of detail, prior to
these orders being submitted for sealing.
Fogarty J
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-1728
UNDER Part 15 of the Companies Act 1993
AND
IN THE MATTER OF an application for orders approving a scheme of arrangement under section 236 of the Companies Act
1993
TRUSTPOWER LIMITED a duly incorporated company with its registered address at 108 Durham Street, Tauranga, Tauranga 3110, New Zealand and carrying
on business as an electricity generator and retailer of electricity, gas and telecommunications services
First applicant
BAY ENERGY LIMITED a duly incorporated company with its registered address at 108 Durham Street, Tauranga, Tauranga 3110, New Zealand and carrying on business as a non-trading subsidiary
Second applicant
ORDERS SANCTIONING ARRANGEMENT UNDER PART 15 OF THE COMPANIES ACT 1993
SEALED: 2016
S A Armstrong / A J Nelder
Phone +64 9 367 8000
Fax +64 9 367 8163
PO Box 8
DX CX10085
Auckland
TILT RENEWABLES LIMITED a duly incorporated company with its registered address at 108 Durham Street, Tauranga, Tauranga 3110, New Zealand and carrying on business as a holding company
Third applicant
TARARUA WIND POWER LIMITED a duly incorporated company with its registered address at 108 Durham Street, Tauranga, Tauranga 3110, New Zealand and carrying on business as an electricity generator
Fourth applicant
BEFORE THE HONOURABLE JUSTICE FOGARTY ON 18 OCTOBER 2016
AFTER READING the amended originating application of the applicants for orders approving a scheme of arrangement under Part 15 of the Companies Act 1993 dated 28
September 2016, the memoranda of counsel dated 28 July 2016, 8 August 2016, 28
September 2016, 5 October 2016 and 17 October 2016, the affidavits of Paul Morton Ridley-Smith sworn 28 July 2016, 28 September 2016 and 17 October 2016, the affidavits of Greg Antony Anderson sworn 28 July 2016 and 14 September 2016, the affidavits of Kevin John Palmer sworn 14 July 2016, Andrew John Grenfell sworn 18
July 2016, Graeme Ross Pinfold sworn 20 September 2016, and Alexander Robert MacDuff sworn 14 September 2016 and AFTER HEARING from S A Armstrong and A J Nelder, counsel on behalf of the applicants, THIS COURT ORDERS:
1. The scheme of arrangement to effect the demerger of Trustpower Limited ("Trustpower") described in the Implementation Plan (located at Schedule 1 of this application) ("Demerger") is approved.
2.The Demerger is binding with immediate effect from the Implementation Time, upon:
(a) the first applicant, Trustpower;
(b) the second to fourth applicants, being Bay Energy Limited ("BEL"), Tilt Renewables Limited (known as Trustpower Australia (New Zealand) Limited prior to 8 July 2016, and Australasian Renewables Limited prior to 12 August 2016) ("TANZL"), and Tararua Wind Power Limited ("Tararua Wind");
(c) every person who is a shareholder of Trustpower as at 5:00 pm on the Record Date, being five Trading Days (as defined in the Implementation Plan) after the date these orders are sealed;
(d) every person who is a counterparty to a Transferring Contract with
Trustpower; and
(e) such other persons as are necessary to give effect to the Demerger.
3. For the purpose of giving effect to the Demerger:
(a) all real and personal property, rights, powers, and interests (including choses in action) of every description vested in Trustpower as at the Implementation Time and whether present or future, actual or contingent in nature (together "Assets") shall transfer to, and vest in, BEL, TANZL, or Tararua Wind, in accordance with the Implementation Plan (with the exception of shares issued to Trustpower by TANZL or BEL, which will not be transferred pursuant to this order);
(b) all liabilities, duties and obligations owed to any person as at the
Implementation Time by Trustpower, whether:
(i) present or future, actual or contingent, secured, preferential or unsecured, joint or several, as principal, surety by way of guarantee or otherwise;
(ii) for the payment of money or otherwise; (iii) ascertained or a liability for damages; and
(iv) payable or to be performed in New Zealand or elsewhere, (together "Liabilities"),
shall transfer to, and become the Liabilities of, BEL, TANZL, or
Tararua Wind in accordance with the Implementation Plan;
(c) all Transferring Contracts of Trustpower (as further defined and described in the Implementation Plan) shall transfer to, and vest in, BEL, TANZL, or Tararua Wind, in accordance with the Implementation Plan and on the terms set out below:
(i) each Transferring Contract shall, to the extent that it was previously binding on and enforceable by, against, or in favour of Trustpower, be binding and enforceable by, against, or in favour of whichever of BEL, TANZL, or Tararua Wind the contract is transferred to in accordance with the Implementation Plan as fully and effectually in every respect as if that company had been named as a party to the relevant Transferring Contract instead of Trustpower;
(ii) a reference (express or implied) to Trustpower in any Transferring Contract shall, unless the context otherwise requires, be read and construed as a reference to whichever of BEL, TANZL, or Tararua Wind, the contract is transferred to in accordance with the Implementation Plan; and
(iii) a reference (express or implied) to Trustpower in any notice or other communication served, given or sent on or after the Implementation Date in relation to any Transferring Contract shall, unless the context otherwise requires, be read as a reference to whichever of BEL, TANZL, or Tararua Wind, the contract is transferred to in accordance with the Implementation Plan;
(d) the relationship between Trustpower and a customer shall become the same relationship between BEL and that customer, and the same rights and liabilities, including rights of set-off, shall exist between BEL and a customer as existed immediately before the Implementation Time between Trustpower and that customer;
(e) any instruction, order, direction, mandate, waiver or consent ("Authorisation") given to Trustpower and subsisting immediately before the Implementation Date, shall be deemed to have been given to whichever of BEL, TANZL, or Tararua Wind acquired the Asset, Liability or TPW Contract (as further defined and described in the Implementation Plan) which gave rise to the Authorisation; and
(f) without limiting any other paragraph of these orders, any and all rights, obligations, liabilities (whether owed to any person, or at law) and related duties of every description of Trustpower arising out of or in connection with the Electricity Industry Act 2010 ("EIA"), regulations made under the EIA ("Regulations") and the Electricity Industry Participation Code 2010 ("Code"), shall, on and from the Implementation Time:
(i) transfer to and vest in BEL (including any such rights, obligations, liabilities and related duties arising after the Implementation Time that relate to acts or omissions of Trustpower that accrue prior to the Implementation Time); and
(ii) BEL shall perform and comply with such obligations, liabilities and related duties and/or be entitled to exercise such rights as fully and effectively in all respects as if BEL had been a participant under the EIA, the Regulations, or the Code in place of Trustpower.
4.On or about the Implementation Date, following the transfer of Assets, Liabilities and Transferring Contracts set out at orders 3(c)(i), 3(c)(ii) and
3(c)(iii), Trustpower will provide a notification with details of the new contracting entity to creditors of Trustpower who, after the implementation of the Demerger, have registrations on the Personal Property Securities Register over the Assets of Trustpower.
Directions in respect of the proposed liquidation and distribution of BEL
shares and TANZL shares to shareholders
5.An order, which is to lie in Court until the liquidators to be appointed in accordance with clause 2.3(b) of the Implementation Plan ("Liquidators") have been so appointed, that:
(a) the Liquidators are not required to call for creditors to file a proof of claim form;
(b) the Liquidators are exempt from compliance with the provisions of paragraph (c) or (d) of section 255(2) and section 257(1) of the Act on the conditions that:
(i) the Liquidators prepare and publish copies of the documents listed in sections 255(2)(c)(ii)(A) and (B) and section
255(2)(d) of the Act on their website and send copies of those documents to the Registrar;
(ii) the Liquidators prepare and publish the documents listed at section 257(1)(a) of the Act on their website and comply with section 257(1)(b) of the Act in respect of those documents; and
(c) the Liquidators are directed to comply with clause 2.3(d) of the
Implementation Plan.
6.Trustpower is granted leave to apply to the Court for approval of any amendment, modification or supplement to the Demerger.
Date:
By the Court:
Deputy Registrar
SCHEDULE 1
IMPLEMENTATION PLAN
1. GSP AND FINANCING TRANSACTIONS
1.1 On or prior to the Implementation Date and prior to the transfers referred to in paragraph 3, TANZL will procure that GSP will transfer the GSP Wind Assets to an Australian member of the TANZL Group (being Blayney and Crookwell Windfarm Pty Limited (ACN 612 416 029)).
1.2 On or prior to the Implementation Date: (a) TANZL will procure that:
(i) GSP will redeem the 70,000,000 non-cumulative redeemable preference shares issued to the Trustpower Australia Financing Partnership (held by Trustpower Australia Holdings Pty Ltd as the general partner of that partnership); and
(ii) the Trustpower Australia Financing Partnership will repay any debt that it owes to TPW (or to BEL by virtue of the debt being a BEL Transferring Asset).
(b) Tararua Wind Power will repay any debt that it owes to TPW (or to
BEL by virtue of the debt being a BEL Transferring Asset).
2. DEMERGER SEQUENCE
Subject to any amendments or variations as may be required by the Court, the following will occur on the dates specified and in the sequential order specified below.
2.1 Following the sealing of the Final Court Orders:
(a) TPW will advise NZX of the grant of the Final Court Orders and of the
Record Date.
(b) On the date four Trading Days prior to the Record Date, TPW will transfer 378 shares held as treasury stock to Shares For Good for the benefit of the Graeme Dingle Foundation, and then cancel any remaining shares held by TPW as treasury stock.
(c) At 5.00pm on the date three Trading Days after the Final Court Orders are sealed, trading in TPW's Shares on the Main Board will cease.
(d) Those Shareholders to participate in the Demerger will be determined as those Shareholders on the Register as at 5.00pm on the Record Date.
2.2 On the Implementation Date the following steps will occur sequentially:
(a) Tararua Wind Power will assume by way of novation TPW's liability for the EKF Debt in consideration for TPW paying to Tararua Wind Power an amount equal to TPW's liability for the EKF Debt as at the
Implementation Date ("Consideration");
(b) Tararua Wind Power will use the payment from TPW referred to in paragraph (a) above to advance to TANZL an amount equal to the Consideration;
(c) TANZL will use the amount advanced by Tararua Wind Power referred to in paragraph (b) above to pay a dividend to TPW of an amount equal to the Consideration;
(d) the Tararua Transferring Assets, the Tararua Transferring Liabilities and the Tararua Transferring Contracts transfer contemporaneously from TPW to Tararua Wind Power in accordance with paragraph 3;
(e) the TANZL Transferring Assets, the TANZL Transferring Liabilities, TANZL Vested Litigation Matters and the TANZL Transferring Contracts will transfer contemporaneously from TPW to TANZL and vest in TANZL in accordance with paragraph 3;
(f) the BEL Transferring Assets, the BEL Transferring Liabilities, the BEL Vested Litigation Matters, Joint Litigation Matters and the BEL Transferring Contracts, will transfer contemporaneously from TPW and TANZL (in the case of the shares in GSP) to BEL in accordance with paragraph 3;
(g) BEL will be renamed 'Trustpower Limited' and TPW will be renamed
'Scarlett Limited';
(h) the amendments to TPW's constitution come into effect; (i) the BEL Constitution will take effect;
(j) the TANZL Constitution will take effect; and
(k) upon completion of the steps in (a) to (k) above, the "event" which, under TPW's constitution, requires the Board to pass a resolution placing TPW in liquidation will have occurred.
2.3 On the Distribution Date the following steps will occur sequentially:
(a) the Resolution will be passed, the Certificate will be effective and the NoA will be executed (and the NoA will be dated and the time recorded on it);
(b) the Liquidator(s) of TPW will be appointed;
(c) the shares in BEL and TANZL will be subdivided by the directors of BEL and TANZL respectively, to be equal to the number of Shares on issue meaning that:
(i) each BEL share will be subdivided into 156,486,500 shares; (ii) each TANZL share will be subdivided into 3,129,730 shares;
and
(d) the Liquidators will make an in specie distribution of the BEL Shares and TANZL Shares to Shareholders, such that each Shareholder
receives one BEL Share and one TANZL Share for each Share the Shareholder holds at 5.00 pm on the Record Date, and the Shareholders will be recorded in the share register of BEL and TANZL respectively as the holders of such shares.
3. TRANSFER OF ASSETS AND LIABILITIES
3.1 Assets: On and with effect from the Implementation Time and as referred to in paragraph 2.2 and in the following sequence:
(a) the Tararua Transferring Assets will transfer from TPW to and vest in
Tararua Wind Power;
(b) the TANZL Transferring Assets will transfer from TPW to and vest in
TANZL; and
(c) the BEL Transferring Assets will transfer from TPW and TANZL (in the case of the shares in GSP) to and vest in BEL.
3.2 Liabilities: On and with effect from the Implementation Time and in the following sequence:
(a) the Tararua Transferring Liabilities will (upon being so ordered by Final Court Orders) transfer from TPW to Tararua Wind Power and be assumed by Tararua Wind Power;
(b) the TANZL Transferring Liabilities and the TANZL Vested Litigation Matters will (upon being so ordered by the Final Court Orders) transfer from TPW to TANZL and be assumed by TANZL; and
(c) the BEL Transferring Liabilities, the BEL Vested Litigation Matters, and the Joint Litigation Matters will (upon being ordered by the Final Court Orders) transfer from TPW to BEL and be assumed by BEL.
3.3 TPW Contracts: On and with effect from the Implementation Time and in the following sequence:
(a) the Tararua Transferring Contracts will (upon being so ordered by the Final Court Orders) transfer from TPW to Tararua Wind Power and be assumed by Tararua Wind Power as if Tararua Wind Power had been named as a party to the relevant contract instead of TPW;
(b) the TANZL Transferring Contracts will (upon being so ordered by the Final Court Orders) transfer from TPW to TANZL and be assumed by TANZL as if TANZL had been named as a party to the relevant contract instead of TPW; and
(c) the BEL Transferring Contracts will (upon being so ordered by the Final Court Orders) transfer from TPW to BEL and be assumed by BEL as if BEL had been named as a party to the relevant contract instead of TPW.
3.4 Assumption of employee obligations: Without limiting paragraph 3.2:
(a) BEL will on and with effect from the Implementation Time, assume the obligation of TPW to pay all Liabilities (including any amount of salary or wages unpaid, annual leave, alternative holidays, long service
leave, sick leave and any other accrued entitlements or emoluments) in respect of the BEL Transferring Employees (and will, where necessary, enter into separate arrangements with BEL Transferring Employees); and
(b) TANZL will procure that the relevant TANZL Group member will, on and with effect from the Implementation Time, enter into separate arrangements with TANZL Transferring Employees.
4. CONTRACTS
4.1 If any Transferring Contract is to be varied so that both BEL and TANZL (or any member of their respective group) can be a party to it or it is to be varied so that each of BEL and TANZL (or any member of their respective group) can have their own arrangements with the counterparty in respect of matters dealt with by the Transferring Contract, and such variation has not occurred by the Implementation Time, then the parties agree that such Transferring Contract shall be transferred to BEL by the Final Court Orders and, until that contract is so varied or TANZL (or its relevant group member) has entered into its own arrangements so that it does not need the benefit of that contract, the arrangements in clause 7 of the Transitional Services Agreement will apply.
5. LITIGATION
5.1 Purpose: This paragraph 5 governs:
(a) the on-going management of Claims brought before the
Implementation Time:
(b) the management of Claims brought after the Implementation Time;
and
(c) related matters.
5.2 Management: In this paragraph 5, "management" includes decision-making and actions concerning the commencement, continuation and/or resolution (and the terms thereof), resisting, defending, disputing, avoiding, counterclaiming, setting off, settling, compromising, appealing, or taking any relevant step in the Claim; and "manage" shall have a corresponding meaning.
5.3 Management of TANZL Vested Litigation Matters: On and from the Implementation Time, TANZL is to manage and bear the Costs incurred after the Implementation Time of each TANZL Vested Litigation Matter.
5.4 Management and Costs of Joint Litigation Matters:
(a) On and from the Implementation Time, BEL or TANZL (as appropriate) will cause each Joint Litigation Matter to be managed by:
(i) BEL (if the Joint Litigation Matter relates primarily to BEL Group's business, or if there is any dispute between BEL and TANZL as to whether a Joint Litigation Matter relates primarily to the BEL Group or TANZL Group business); or
(ii) TANZL (if the Joint Litigation Matter relates primarily to
TANZL Group's business).
(b) The party managing the Joint Litigation Matter must keep the other fully informed of, and facilitate their involvement in, such matters relating to that Joint Litigation Matter as are appropriate. To the extent that there is any disagreement between the parties in relation to any aspect of the management of the Joint Litigation Matter, the reasonable requirements and directions of the party managing the Joint Litigation Matter are to prevail.
(c) BEL and TANZL will share:
(i) the Costs (including any award, fine, penalty) incurred in relation to each Joint Litigation Matter; and
(ii) the benefits (including sums recovered) in relation to each
Joint Litigation Matter,
in proportion to the extent to which the benefits or Liabilities accruing from such Joint Litigation Matter relate to their respective businesses.
5.5 Claims against BEL on and from the Implementation Time relating to
TANZL:
(a) BEL will be responsible for the management of, and Liability (including Costs) or loss associated with any Claim brought against any member of the BEL Group on and from the Implementation Time, except in the circumstances set out in this paragraph 5.5.
(b) If, after the Implementation Time:
(i) a Claim is brought against a member of the BEL Group by a person other than a member of the TANZL Group; or
(ii) a member of the BEL Group becomes aware of a fact or matter which could reasonably be expected to give rise to a Claim by a person other than a member of the TANZL Group against a member of the BEL Group,
and the Claim relates partly or wholly to any member of the TANZL Group ("TANZL Related Claim"), then:
(iii) BEL must promptly provide TANZL a copy of the documentation (if any) that constitutes the TANZL Related Claim together with all other information in the possession, custody or control of a member of the BEL Group which is relevant to the TANZL Related Claim;
(iv) to the extent permitted by law, and with the consent of any required parties, if the TANZL Related Claim relates wholly to members of the TANZL Group, BEL will, acting reasonably, assign that TANZL Related Claim to TANZL or another member of the TANZL Group, in which case TANZL will be solely responsible for the Costs and management of the TANZL Related Claim, and will indemnify BEL and each member of the BEL Group against any Liability (including
Costs) incurred by BEL or another member of the BEL Group in connection with that TANZL Related Claim;
(v) unless a TANZL Related Claim has been assigned in accordance with paragraph 5.5(b)(iv):
(aa) BEL may, in its absolute discretion, either retain responsibility for the management of the TANZL Related Claim or require TANZL to assume responsibility for the management of the TANZL Related Claim;
(bb) BEL and TANZL will share the Costs (including any award, fine, penalty) and any benefits (including sums recovered) of the TANZL Related Claim in proportion to the extent to which the benefits and Liabilities in connection with the TANZL Related Claim relate to the BEL Group and the TANZL Group respectively; and
(cc) if there is any disagreement between BEL and
TANZL in relation to a TANZL Related Claim:
(A) if the TANZL Related Claim relates primarily to the TANZL Group, the reasonable requirements and directions of TANZL are to prevail;
(B) if the TANZL Related Claim relates primarily to the BEL Group (or this is not able to be readily determined), the reasonable requirements and directions of BEL are to prevail.
5.6 Claims against TANZL on and from the Implementation Time relating to
BEL:
(a) TANZL will be responsible for the management of, and Liability (including Costs) or loss associated with any Claim brought against any member of the TANZL Group on and from the Implementation Time, except in the circumstances set out in this paragraph 5.6.
(b) If, after the Implementation Time:
(i) a Claim is brought against the member of the TANZL Group by a person other than a member of the BEL Group; or
(ii) a member of the TANZL Group becomes aware of any fact or matter which could reasonably be expected to give rise to a Claim by a person (other than a member of the BEL Group) against a member of the TANZL Group,
and the Claim relates partly or wholly to any member of the BEL Group (a "BEL Related Claim"), then:
(iii) TANZL must promptly provide BEL a copy of the documentation (if any) that constitutes the BEL Related
Claim together with all other information in the possession, custody or control of a member of the TANZL Group which is relevant to the BEL Related Claim;
(iv) to the extent permitted by law, and with the consent of any required parties, if the BEL Related Claim relates wholly to members of the BEL Group, TANZL will, acting reasonably, assign that BEL Related Claim to BEL or another member of the BEL Group, in which case BEL will be solely responsible for the Costs and management of the BEL Related Claim, and will indemnify TANZL and each member of the TANZL Group against any Liability (including Costs) incurred by TANZL or another member of the TANZL Group in connection with that BEL Related Claim;
(v) unless a BEL Related Claim has been assigned in accordance with paragraph 5.6(b)(iv):
(aa) TANZL may, in its absolute discretion, either retain responsibility for the management of the BEL Related Claim or require BEL to assume responsibility for the management of the BEL Related Claim;
(bb) BEL and TANZL will share the Costs (including any award, fine, penalty) and any benefits (including sums recovered) of the BEL Related Claim in proportion to the extent to which the benefits and Liabilities in connection with the BEL Related Claim relate to the TANZL Group and the BEL Group respectively; and
(cc) if there is any disagreement between TANZL and
BEL in relation to a BEL Related Claim:
(A) if the BEL Related Claim relates primarily to the business of the BEL Group, the reasonable requirements and directions of BEL are to prevail;
(B) if the BEL Related Claim relates primarily to the business of the TANZL Group, the reasonable requirements and directions of TANZL are to prevail.
5.7 Principles applying to management of certain Claims:
(a) The party having responsibility for the management of a Claim under paragraphs 5.4, 5.5 and 5.6 (in this paragraph 5.7 the "first party") agrees not to do, and must not permit any of its Representatives to do, any of the following things in respect of the Claim without the prior written consent of the party who is to bear the greater proportion of the Costs in respect of the Claim under paragraph 5.4, 5.5 or 5.6 (respectively) (in this paragraph 5.7 the "second party") (which consent must not be unreasonably withheld):
(i) admit, compromise, settle or pay the Claim; or
(ii) take any other steps which may materially prejudice the prosecution, defence or challenge of the Claim including the discontinuation of any proceeding or appeal instituted or defended by the second party in the name of the first party.
(b) The first party must consult with the second party in relation to: (i) the terms of the Claim; and
(ii) any action in the name of the first party to resist, defend, dispute, avoid, counterclaim, set off, settle, compromise or appeal the Claim.
(c) The first party must keep, at all times, the second party fully informed of and facilitate the second party's involvement in all matters relating to the Claim including:
(i) retainer of solicitors and counsel;
(ii) preparation and calling of evidence and the making of submissions;
(iii) provision of all documents relating to the Claim; and
if an appeal is to be made, all matters relating to the appeal (including the matters specified in sub-paragraphs 5.7(c)(i) to (iii)).
(d) If the party having responsibility for the management of a Claim under paragraphs 5.4, 5.5 or 5.6 is also the party which is to bear the greater proportion of the Costs in respect of the Claim, then that party must keep the other party fully informed of and facilitate the other party's involvement in such matters relating to the Claim as are appropriate having regard to the other party's interest in the Claim.
5.8 Access and cooperation: Save for when the relevant Claim has been validly assigned pursuant to paragraphs 5.5 or 5.6, in connection with any TANZL Vested Litigation Matter, Joint Litigation Matter, TANZL Related Claim, BEL Related Claim, or BEL Vested Litigation Matter:
(a) BEL and TANZL must ensure that the other party and its respective subsidiaries (and their Representatives) are given:
(i) full and timely access to, and are permitted to take copies of, all relevant records in the possession, custody or control of the party and each of its subsidiaries for the purposes of assessing and prosecuting or defending the Claim;
(ii) reasonable and timely access to appropriate Representatives of the party and each of its subsidiaries for the purposes of assessing the Claim or preparing evidence, analysis, factual research and extracting data for use in or in connection with the Claim; and
(iii) all other reasonable and timely assistance in relation to the
Claim,
and each of BEL and TANZL agrees to take, and must procure that its
relevant subsidiaries take, reasonable steps to minimise disruption caused to the business of the other.
(b) For the avoidance of doubt, BEL and TANZL must ensure that their Representatives and the Representatives of each of their subsidiaries who are potential witnesses relevant to a Claim are made available to prepare evidence for the Claim (including, for example, meeting with counsel as necessary) and to appear and give evidence at any hearing in the Claim.
(c) In the event of a disagreement between the parties as to what comprises reasonable and timely access or assistance under this paragraph 5.8, the reasonable directions of the party managing the Claim shall prevail.
(d) BEL and TANZL must, and must ensure their respective subsidiaries (and their Representatives) take all necessary steps and actions to enable the management of Claims as envisaged in this paragraph 5.
5.9 Excluded Litigation Matters:
(a) Despite the provisions of clause 10 of the Separation Deed, this paragraph 5 and Schedule 3 of the Separation Deed, BEL and TANZL agree that the indemnities in clause 10 of the Separation Deed, in this paragraph 5 and in Schedule 3 of the Separation Deed do not apply to:
(i) any Claim to the extent, and only to the extent, that the
Claim contains any allegation of fraud made against either: (aa) a member of the BEL Group;
(bb) a member of the TANZL Group;
(ii) any criminal prosecution against a member of the BEL Group (and not against a member of the TANZL Group);
(iii) any criminal prosecution against a member of the TANZL Group (and not against a member of the BEL Group); or
(iv) any dispute with any governmental agency concerning Taxation (including a Claim made by a party against a governmental agency concerning Taxation).
(b) In the case of any dispute with any governmental agency concerning Taxation (including a Claim made by a party against a governmental agency concerning Taxation), the Claim will be managed as set out in clause 11 of the Separation Deed.
(c) Where the predominant aspect of a Claim is an allegation of fraud, or the Claim is a criminal prosecution, the Claim will be managed by the party against which the Claim is brought, at its own cost.
5.10 Assignment of litigation proceeds: BEL must, and must procure that each other member of the BEL Group, acting reasonably and to the extent permitted by law, assigns to TANZL the proceeds of any TANZL Vested Litigation Matter.
5.11 Assignment of litigation proceeds: TANZL must, and must procure that each other member of the TANZL Group, acting reasonably and to the extent permitted by law, assigns to BEL the proceeds of any BEL Vested Litigation Matter.
5.12 Disclosure of information: To the extent any of the information to be provided between the parties pursuant to this paragraph 5 is privileged, privilege is not waived by such provision of information.
6. HEADINGS AND REFERENCES
6.1 In this Separation Plan, unless the context otherwise requires:
(a) references to persons or entities include natural persons, bodies corporate, partnerships, trusts and unincorporated associations of persons;
(b) references to an individual or a natural person include his estate and personal representatives;
(c) a reference to a clause, schedule or annex is a reference to a clause, schedule or annex of or to the Separation Deed;
(d) references to a party include the successors or assigns (immediate or otherwise) of that party;
(e) a reference to any instrument or document includes any variation or replacement of it;
(f) unless otherwise indicated, a reference to any time is a reference to that time in New Zealand;
(g) a reference to $, NZ$ or dollars is to New Zealand currency; (h) singular words include the plural and vice versa;
(i) a word of any gender includes the corresponding words of any other gender;
(j) if a word or phrase is defined, other grammatical forms of that word have a corresponding meaning;
(k) general words must not be given a restrictive meaning just because they are followed by particular examples intended to be embraced by the general words; and
(l) the headings do not affect interpretation.
6.2 The following terms have the following defined meanings:
"Asset" means any real property, personal property, rights (whether present or future, actual or contingent), powers, interests (whether present or future, actual or contingent), revenues, chose in action, , or engagements. A reference to an Asset also includes any legal or equitable interest in that Asset.
"Authority" means any minister, department of state, government authority, regional council, territorial authority or other statutory authority having
jurisdiction or authority to perform or exercise functions or powers under or pursuant to any statute.
"BEL" means Bay Energy Limited (Company number 565426).
"BEL Constitution" means the constitution to apply in respect of BEL which has been adopted by BEL subject to the Demerger being implemented.
"BEL Group" means BEL and its subsidiaries, including those subsidiaries of TPW that are, pursuant to the Implementation Plan, to become subsidiaries of BEL, but excluding any subsidiaries of BEL which, pursuant to the Implementation Plan, are to cease to be subsidiaries of BEL pursuant to the Demerger.
"BEL Shares" means shares in the capital of BEL after the subdivision referred to in paragraph 2.3(c)(i).
"BEL Transferring Assets" means:
(a) all of TPW's right, title and interest in all of its Assets (including TPW's rights (whether present or future, actual or contingent) against third parties in respect of such Assets, including any Claim) which are not TANZL Transferring Assets, Tararua Transferring Assets, shares issued by TANZL or shares issued by BEL;
(b) all of TANZL's right, title and interest in the shares in GSP;
(c) certain income arising to TPW from the operation of wind farms pursuant to a lease with Tararua Wind Power (as provided in clause
6.4 of the Separation Deed); and
(c) any debt owing from each of Tararua Wind Power and the Trustpower
Australia Financing Partnership to TPW.
"BEL Transferring Contracts" means all TPW Contracts which are neither
TANZL Transferring Contracts nor Tararua Transferring Contracts.
"BEL Transferring Employees" means those employees of TPW transferring their employment from TPW to a member of the BEL Group.
"BEL Transferring Liabilities" means all Liabilities (including those which may arise after the Implementation Time) which are not TANZL Transferring Liabilities or Tararua Transferring Liabilities, and includes certain costs and expenses which TPW is obligated to pay pursuant to a lease with Tararua Wind Power (as provided in clause 6.4 of the Separation Deed).
"BEL Vested Litigation Matters" means all litigation matters involving TPW as at the Implementation Date other than Joint Litigation Matters or TANZL Vested Litigation Matters and as referred to in clause 6.3(e) of the Separation Deed.
"Business Day" means a day (other than a Saturday, Sunday or a public holiday) on which banks are generally open in Auckland.
"Certificate" means the directors' certificate to be executed by the TPW Directors on the Distribution Date at the time specified in Schedule 3 to the Separation Deed, which notes the grounds for the passing of the solvency component of the Resolution.
"Claim" means any allegation, investigation or inquiry, cause of action, claim, litigation, proceeding, demand, judgment, award, claim for contribution or indemnity, suit or demand of any nature which exists now or at any time in the future, whether at law, under contract, in equity, due to negligence of a party, under statute or otherwise.
"Companies Act" means the Companies Act 1993.
"Costs" means external legal costs and expenses (including, without limitation, solicitors' and counsels' fees, expert costs, court costs and fees, arbitrators' or mediators' fees, and in each case on a full indemnity basis and including GST that is not otherwise recoverable), penalties, fines and any other like costs directly associated with a matter.
"Court" means the High Court of New Zealand.
"Demerger" means the Court approved scheme of arrangement to effect the demerger of TPW into BEL and TANZL, the key elements of which are described in the Implementation Plan, subject to any amendments or variations made in accordance with the Separation Deed or as may be required by the Court.
"Distribution Date" means the Business Day occurring immediately after the
Implementation Date.
"EKF Debt" means any financial indebtedness made available under the following facilities:
(a) the NZ$50,000,000 export credit facility agreement dated 24
November 2010 between Trustpower Limited as borrower and ANZ Bank New Zealand Limited as Lender; and
(b) the NZ$110,908,857 term loan facility agreement dated 2 March 2006 between Trustpower Limited as borrower and ANZ Bank New Zealand Limited as Lender.
"Final Court Orders" means orders of the Court that the Demerger shall be given effect, which shall be binding on TPW, BEL, TANZL, Shareholders and such other persons or class of persons as the Court may specify, in accordance with section 236(1) of the Companies Act.
"Financing Arrangements" means bank borrowings and the EKF Debt. "GSP" means GSP Energy Pty Limited.
"GSP Wind Assets" means the wind assets transferred by GSP to a subsidiary of TANZL pursuant to an agreement for sale and purchase between GSP and Blayney and Crookwell Windfarm Pty Ltd (ACN 612 416 029) with settlement to occur on or prior to the Implementation Date.
"GST" means tax charged in New Zealand under the Goods and Services Tax Act 1985 and any similar value added tax charged or levied in any other jurisdiction.
"Implementation Date" means the Business Day occurring immediately after the Record Date, or such other date as the parties may agree in writing. "Implementation Plan" means the plan annexed as Schedule 2.
"Implementation Time" means the first moment in time on the Implementation
Date.
"Joint Litigation Matters" means any and all Claims brought before the Implementation Date by or against any member of the TPW Group that relates both to BEL (whether in respect of the BEL Transferring Assets or otherwise) and TANZL (whether in respect of the TANZL Transferring Assets or otherwise) (excluding, for the avoidance of doubt, BEL Vested Litigation Matters and TANZL Vested Litigation Matters).
"Liability" includes any liability, duty and obligation (whether present or future, actual or contingent, secured or unsecured, joint or several, as principal, surety by way of guarantee or otherwise) whether for the payment of money or otherwise, whether ascertained or a liability for damages, and whether payable or to be performed in New Zealand or elsewhere, owed to any person at the Implementation Time.
"Liquidators" means the liquidators of TPW proposed to be appointed pursuant to clause 2.3 of the Implementation Plan.
"Main Board" means the main board equity security market operated by NZX. "NoA" means the notice of appointment to be executed by the TPW Directors
on the Distribution Date at the time specified in Schedule 3 of the Separation
Deed, appointing Liquidator(s) to TPW. "NZX" means NZX Limited.
"Record Date" means 5.00pm on the date which is five Trading Days after the
Sealed Date.
"Register" means the register of Shares maintained by Computershare
Investor Services Limited on behalf of TPW.
"Representative" means, in relation to an entity, a director, officer, employee, agent, partner, contractor or adviser of that entity.
"Resolution" means the director's resolution to be passed by the TPW Directors on the Distribution Date at the time specified in Schedule 3 of the Separation Deed, under which the board will resolve (a) to approve the execution of the NoA, and (b) that TPW can pay its debts when due.
"Sealed Date" means the date the Final Court Orders are sealed.
"Separation Deed" means the deed between TPW, BEL, TANZL and Tararua Wind Power, to which this Implementation Pan is annexed as Schedule 2 thereto.
"Share" means a fully paid ordinary share in the capital of TPW.
"Shareholder" means a person who is recorded in the Register as the holder of one or more Shares from time to time.
"TANZL" means Tilt Renewables Limited (Company number 1212113) (previously known as Trustpower Australia (New Zealand) Limited and then Australasian Renewables Limited).
"TANZL Assets and Liabilities Allocation Plan" means the asset and liabilities allocation plan attached as Appendix 2 to the Separation Deed listing assets or liabilities of TPW or any member of the BEL Group which are to be transferred to TANZL.
"TANZL Constitution" means the constitution to apply in respect of TANZL which has been adopted by TANZL subject to the Demerger being implemented.
"TANZL Group" means TANZL and its subsidiaries (including for the avoidance of doubt the Trustpower Australia Financing Partnership), including those subsidiaries of TPW that are, pursuant to the Implementation Plan, to become subsidiaries of TANZL (including Tararua Wind Power), but excluding any subsidiaries of TANZL which pursuant to the Implementation Plan are to cease to be subsidiaries of TANZL, pursuant to the Demerger.
"TANZL Shares" means shares in the capital of TANZL after the subdivision referred to in paragraph 2.3(c)(ii).
"TANZL Transferring Assets" means the Assets that are identified or designated as such on the TANZL Assets and Liabilities Allocation Plan, including TPW's rights (whether present or future, actual or contingent) against third parties in respect of such Assets including any Claim.
"TANZL Transferring Employees" means those employees of TPW
transferring their employment from TPW to a member of the TANZL Group.
"TANZL Transferring Contracts" means:
(a) those TPW Contracts which are listed in Part B of Appendix 1 of the
Separation Deed; and
(b) any TPW Contracts entered into after the date set out in Appendix 1 of the Separation Deed as to when Appendix 1 of the Separation Deed was prepared, and where TPW and TANZL agree that the Contract should be listed in Part B of Appendix 1 of the Separation Deed.
"TANZL Transferring Liabilities" means:
(a) all Liabilities and Claims against TPW arising out of or in connection with the TANZL Transferring Assets excluding any Financing Arrangements; and
(b) any existing debt owed by TPW to any member of the TANZL Group;
and
(c) all Liabilities that are identified or designated as such in the TANZL Assets and Liabilities Allocation Plan.
"TANZL Vested Litigation Matters" means the litigation matters identified in the TANZL Assets and Liabilities Allocation Plan and as referred to in clause
6.3 of the Separation Deed.
"Tararua Transferring Assets" means the Assets identified or designated as such in Appendix 3 of the Separation Deed, including TPW's rights (whether present or future, actual or contingent) against third parties in respect of such
Assets including any Claim.
"Tararua Transferring Contracts" means
(a) those TPW Contracts which are listed in Part A of Appendix 1 of the
Separation Deed; and
(b) any TPW Contracts entered into after the date set out in Appendix 1 of the Separation Deed as to when Appendix 1 of the Separation Deed was prepared, and where TPW and Tararua Wind Power agree that the Contract should be listed in Part A of Appendix 1 of the Separation Deed.
"Tararua Transferring Liabilities" means all Liabilities and Claims arising out of or in connection with a Tararua Transferring Asset, except for those Liabilities to the extent that they relate to the operation or maintenance of the Tararua Transferring Assets, arising in the ordinary course and relating to any period prior to the Implementation Time.
"Tararua Wind Power" means Tararua Wind Power Limited (Company number
475852).
"Taxation" or "Tax" means all forms of taxation including all statutory or governmental taxes, levies, duties and rates, whether imposed in New Zealand, Australia or elsewhere, and includes:
(a) any reassessments of any such taxation; and
(b) all penalties, interest, fines, or the like imposed in respect of any such taxation.
"TPW" means Trustpower Limited (Company number 604040).
"TPW Contract" means any contract that TPW is a party to, or undertaking given to or given by TPW (whether or not in writing) that is subsisting at the Implementation Time.
"TPW Directors" means the board of directors of TPW. "TPW Group" means TPW and its subsidiaries.
"Trading Day" has the meaning ascribed to that term in the NZX Participant
Rules 2004, as amended from time to time.
"Transferring Contract" means any TPW Contract that has not been varied, novated or transferred (either by agreement or in accordance with its terms) such that, from the Implementation Time, each of BEL or TANZL (or any member of their respective group) will have their own arrangements with the counterparty in respect of the matters dealt with by that TPW Contract.
"Transitional Services Agreement" means the agreement of that name between BEL and TANZL whereby the parties are to provide transitional services to the other and its respective group members.
"Trustpower Australia Financing Partnership" means the Trustpower Australia Financing Partnership (ABN 68 709 436 924), a limited partnership constituted pursuant to the Partnership Act 1958 (Victoria, Australia).
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