17 June 2024

International Cases

Re Exore Resources Ltd; Ex parte Exore Resources Ltd.




Courts ought to exercise its discretion to approve the scheme, when a proposed scheme is fair and reasonable

On 4 August 2020, orders pursuant to Section 411(1) of the Corporations Act, 2001 were made to convene a meeting of the holders of fully paid ordinary shares in Exore Resources Ltd (Exore). The meeting was convened to consider a proposed scheme of arrangement whereby Perseus Mining Ltd (Perseus) would acquire 100% of the share capital of Exore by way of a scheme of arrangement. I also made orders approving distribution of a scheme booklet. The scheme meeting was held on 10 September 2020. A resolution to approve the proposed scheme of arrangement was passed by the requisite majorities. The Exore members approved the scheme of arrangement by 99.76% of votes cast and 97.54% of members present in person or by proxy. Now the, application was made pursuant to Section 411(4)(b) of the Act for orders approving the scheme.

The proposed scheme is fair and reasonable such that an intelligent and honest shareholder properly informed might approve it. There was nothing to suggest an absence of good faith or an improper purpose on the part of the members in approving the scheme. Nothing in the scheme is oppressive. Nor is the scheme offensive to public policy. This is a relatively standard acquisition scheme.

The draft scheme booklet would provide proper disclosure to members. The additional affidavit evidence establishes that, the scheme booklet as distributed was substantially in the form approved for distribution by the 4 August 2020 orders. Nothing has arisen to suggest that there has not been full and fair disclosure. Te scheme booklet as distributed meets the requirements under the Act.

Exore proposes an order pursuant to Section 411(6) of the Act whereby approval is subject to an alteration to the terms of the scheme to address the typographical error in clause 9.2(b)(ii) of the scheme terms. The alteration is sought with the approval of Perseus. The alteration is of a minor kind which does not, affects the substance of the scheme and is to correct an obvious inadvertent error in the terms of the scheme.

Certificates of satisfaction of conditions precedent on the part of both Exore and Perseus were provided as part of the affidavit evidence. The certificates confirmed satisfaction or waiver of all conditions precedent other than court approval. Accordingly, the evidence established that, the only remaining substantive condition precedent was the court's approval under Section 411(4)(b) of the Act.

Pursuant to Section 411(4)(b) of the Corporations Act, 2001, the scheme of arrangement between the Plaintiff and its members, in the form contained in annexure C of the scheme booklet is approved, subject to replacing the word 'Exore' with the word 'Perseus' in Clause 9.2(b)(ii) of the scheme of arrangement. Pursuant to Section 411(12) of the Act, the Plaintiff is exempt from compliance with Section 411(11) of the Act, in relation to the Scheme.

Tags : Scheme Approval Discretion

Share :