Tilt Renewables Limited - [2021] NZHC 1861

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2021-404-941

[2021] NZHC 1861

UNDER Part 15 of the Companies Act 1993

IN THE MATTER OF

An application for orders approving a scheme of arrangement under Part 15 of the Companies Act 1993

BETWEEN

TILT RENEWABLES LIMITED

Applicant

Hearing: On the papers

Appearances:

M Eastwick-Field and J W Upson for the Applicant

R F Wallis and L C Bercovitch for Mercury NZ Ltd and Mercury Wind Ltd
D J Cooper and N W Starrenburg for Pisa Obligor Co 1 Pty Limited

Judgment:

22 July 2021

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 22 July 2021 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

TILT RENEWABLES LIMITED [2021] NZHC 1861 [22 July 2021]

Introduction

[1] Tilt Renewables Ltd (Tilt) applies for orders under s 236 of the Companies Act 1993 (the Act) approving a scheme of arrangement.

[2] The scheme would implement a transaction under which Mercury Wind Ltd (Mercury Wind), a subsidiary of Mercury NZ Ltd (Mercury), would acquire Tilt’s New Zealand subsidiaries, and Pisa Obligor Co 1 Pty Ltd (PowAR) would then acquire 100 per cent of the shares in Tilt.

[3] Section 236 contemplates a two-stage process. The first stage is for the Court to make initial orders for the procedure to be followed to obtain approval for the scheme. Once that procedure has been followed, the second stage is for the Court to make substantive (final) orders that approve and give effect to the proposed scheme.

[4] I made initial orders on 3 June 2021. Tilt now seeks final orders to approve and give effect to the scheme. It has filed further affidavits in support.

[5] In accordance with the initial orders, a special meeting of Tilt’s shareholders was held on 14 July 2021. At that meeting, the resolution to approve the proposed scheme was put separately to two interest classes of Tilt shareholders. The first interest class consisted solely of Mercury. Mercury cast all its votes in favour of the resolution. The second interest class consisted of the remaining Tilt shareholders. 99.93 per cent of the votes of the remaining shareholders entitled to vote and who voted were cast in favour of the resolution. The total votes cast in favour of the resolution represented
91.79 per cent of the total number of votes of those shareholders entitled to vote.

[6] The Takeovers Panel has indicated it has no objection to the Court approving the scheme.

[7] The initial orders required that any person who wished to oppose or be heard on the application file and serve a notice of opposition, or notice of appearance, by 5 pm on 19 July 2021. No notices have been filed.

[8] Counsel for Mercury Wind, Mercury and PowAR have filed memoranda in support of Tilt’s application for final orders.

[9] Given the overwhelming shareholder support, the Takeovers Panel having no objection,…

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.

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Details

AGLC: Tilt Renewables Limited [2021] NZHC 1861
Case: [2021] NZHC 1861
Decision Date: 22 July 2021

CaseChat Overview and Summary

Tilt Renewables Limited applied to the High Court of New Zealand for orders approving a scheme of arrangement under the Companies Act 1993. The scheme proposed a transaction where Mercury Wind Limited, a subsidiary of Mercury New Zealand Limited, would acquire Tilt’s New Zealand subsidiaries, followed by Pisa Obligor Co 1 Pty Limited acquiring 100 per cent of Tilt's shares. The court was required to determine whether the scheme met the statutory requirements for approval, including ensuring compliance with procedural provisions, fairness to shareholders, and consideration of creditors' interests. Additionally, given Tilt's status as a code company, the court had to verify that the scheme met specific thresholds for shareholder approval and that the Takeovers Panel had no objections.

The court found that Tilt had complied with the statutory requirements and the initial court orders. Shareholders were adequately informed and represented, with the scheme receiving overwhelming approval from both Mercury New Zealand Limited and the remaining Tilt shareholders. The scheme was deemed fair and reasonable, with the consideration offered significantly exceeding recent share prices and independent valuations. Furthermore, Tilt's solvency would be maintained post-scheme, ensuring creditors were not adversely affected. The court also confirmed that Tilt had satisfied the additional requirements for a code company, including obtaining the necessary shareholder approvals and a statement from the Takeovers Panel indicating no objections.

The court approved the scheme of arrangement, making it binding on Tilt Renewables Limited, Pisa Obligor Co 1 Pty Limited, Mercury New Zealand Limited, Mercury Wind Limited, and all shareholders as of the record date. The court granted Tilt leave to apply for any necessary amendments to the scheme.

Orders