Re Trustpower Ltd - [2016] NZHC 2499

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…

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 Trustpower Ltd

Details

AGLC: Re Trustpower Ltd [2016] NZHC 2499
Case: [2016] NZHC 2499
Decision Date: 19 October 2016

CaseChat Overview and Summary

Trustpower Limited, a company engaged in electricity generation and retail supply of electricity, gas and telecommunications, applied to the High Court of New Zealand for orders approving a scheme of arrangement to demerge its business into two separate companies, Bay Energy Limited and Tilt Renewables Limited. The scheme involved transferring Trustpower's assets, liabilities, and contracts to the two new companies. The application was brought under Part 15 of the Companies Act 1993, which requires the Court's approval of the scheme. The Court had previously granted interlocutory orders to ensure that shareholders would receive adequate information to vote on the demerger. The application for final orders included directions to facilitate the demerger and the liquidation of Trustpower. The shareholders approved the demerger, with a majority of 99.06% voting in favour, and no opposition to the demerger was filed. The Court considered the statutory requirements for approving the scheme, including compliance with the Companies Act, fairness to shareholders, and the views of the Takeovers Panel. The Court also examined the technical aspects of the demerger, particularly in light of a severe storm in South Australia that affected some of Trustpower's wind farms. The Court concluded that the storm did not undermine the merits of the demerger and approved the scheme. The Court made orders to sanction the arrangement, transfer assets and liabilities to the new companies, and direct the liquidation and distribution of shares to shareholders.

Orders