The transaction highlights the firm's expertise in scheme of arrangement transactions
Russell McVeagh has advised Australasian renewable energy generator Tilt Renewables Limited (TLT) on the return of AU$260m capital to the company’s shareholders.
The deal was completed via court-approved scheme of arrangement under Part 15 of the Companies Act 1993. The scheme was approved by shareholders in a virtual meeting and by the High Court in June.
TLT said in a July statement to the ASX and NZX that on the evening of 3 July, the record date for the return of capital, one share was cancelled for every five shares held by shareholders, along with all the rights connected with the shares. Each cancelled share was paid for on 10 July, with shareholders receiving $2.91 per cancelled share.
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“By utilising a scheme, TLT was able to return surplus capital to shareholders in a timely manner that provided certainty, was tax efficient, and treated all shareholders equally,” Russell McVeagh said.
The result of the deal is expected to aid in guiding code companies who are looking to achieve pro rata returns of capital through scheme of arrangement, as well as their legal advisors.
“While TLT is a ‘code company’ for the purposes of the Takeovers Code, the court's judgment confirms that the provisions of the Companies Act that impose specific additional obligations in relation to arrangements or amalgamations involving code companies did not apply,” Russell McVeagh said. “Because the scheme involved a pro rata return of capital, it did not affect the relative voting and distribution rights of shareholders (even with the effects of rounding).”
The firm’s team relied strongly on technology in working on the transaction due to COVID-19 related restrictions. The firm also capitalised on temporary legislative changes to facilitate the swearing of affidavits virtually.
“Both the court and shareholder approval processes were undertaken almost entirely virtually and with the TLT and Russell McVeagh teams predominantly working remotely,” Russell McVeagh said.
Corporate partner Joe Windmeyer and litigation partner Marika Eastwick-Field led the firm’s team.