Solarzero Limited - [2022] NZHC 3259

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001739

[2022] NZHC 3259

UNDER Part 15 of the Companies Act 1993

IN THE MATTER OF

an application for orders approving an arrangement under Part 15 of the Companies Act 1993

BETWEEN

SOLARZERO LIMITED

Plaintiff

Hearing: 28 November 2022

Appearances:

R Hollyman KC for the Plaintiff

Judgment:

6 December 2022

JUDGMENT OF HARVEY J

This judgment is delivered by me on 6 December 2022 at 2 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Counsel:
R J Hollyman KC, Shortland Chambers, Auckland

RE. SOLARZERO LTD [2022] NZHC 3259 [6 December 2022]

Introduction

[1] solarZero Limited (the Company) seeks orders under the Companies Act 1993 approving a scheme of arrangement which would result in GRP III NZ Bidco Limited (the Purchaser) acquiring all of the shares in the Company (the Scheme).

[2] Without notice orders dispensing with service and representation and directions for a meeting of shareholders and other related procedural directions were granted by Tahana J on 20 September 2022. The Company now seeks final unopposed orders approving the Scheme.

[3] The order granting the application was issued at my direction yesterday afternoon. This minute now sets out the reasons for that decision.

Background

[4] The Purchaser and the Company, including the latter’s shareholders and holders of convertible notes, seek approval for a scheme of arrangement under s 236 of the Companies Act 1993. As foreshadowed, initial orders were granted on 20 September last and the scheme has now been approved by the interested parties consistent with the Court’s earlier requirements. Mr Hollyman KC for the Company confirmed that there have been no objections.

[5] Counsel submitted that evidence has now been filed by Philippa Weston in a second affidavit affirmed 13 October 2022 which details compliance with the Court’s initial orders. Counsel pointed out that meetings of shareholders and noteholders were held on 12 October 2022. Resolutions approving the arrangement were passed, being approved by 100 per cent of the votes of the noteholders entitled to vote and 100 per cent of the votes of the shareholders entitled to do so. Mr Hollyman pointed out that since then, there have been no objections or appearances lodged by anyone.

[6] Counsel then referred to a summary of the Scheme set out in paragraphs 27 to 31 of his first memorandum and at paragraph 19of Ms Weston’s first affidavit. In short, the Scheme provides for the conversion of all convertible notes held by noteholders, pursuant to convertible notes agreements with the Company, to new

ordinary shares to be issued to the noteholders. Further, the Purchaser will pay $100 million for the Scheme shares in the Company, including those resulting from the conversion described previously and subject to commercially agreed deductions set out in paragraph 3.4 of the Scheme booklet provided. Finally, Mr Hollyman submitted that the evidence confirms that the Scheme provides for a payment to…

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 Solarzero Limited

Details

AGLC: Solarzero Limited [2022] NZHC 3259
Case: [2022] NZHC 3259
Decision Date: 6 December 2022

CaseChat Overview and Summary

SolarZero Limited applied to the High Court of New Zealand for orders approving a scheme of arrangement under Part 15 of the Companies Act 1993, which would allow GRP III NZ Bidco Limited to acquire all of the shares in the Company. The application was brought by SolarZero Limited, and the Purchaser was GRP III NZ Bidco Limited. The court was required to determine whether the scheme of arrangement satisfied the requirements of section 236 of the Companies Act 1993.

The court considered the four-part test established by the Court of Appeal in Weatherstone v Waltus Property Investments Limited for approving a scheme of arrangement. The court found that the scheme satisfied the statutory provisions, was fairly put to the shareholders and noteholders, was fairly represented by those who attended the meetings, and was such that it might reasonably be approved by an intelligent and honest person of business and was generally fair and equitable. The court was satisfied that the Purchaser would pay a fair price for the shares in the Company and that the scheme would not prejudice any third party.

The court approved the scheme of arrangement and ordered that it be binding on the Company, its shareholders, its noteholders, and the Purchaser. The court's approval was based on the evidence and submissions filed by the applicant, which demonstrated that the scheme met the requirements of section 236 of the Companies Act 1993. The court found that the scheme was fair and equitable and that it was in the best interests of the Company and its shareholders and noteholders. The court's order approving the scheme of arrangement is final and binding on all parties involved.

Orders