Cavotec MSL Holdings Limited HC Auckland CIV 2011-404-3891 [2011] NZHC 1148 (26 September 2011)

Last Updated: 20 October 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV 2011-404-3891}

BETWEEN CAVOTEC MSL HOLDINGS LIMITED First Applicant

AND CAVOTEC MOORMASTER LIMITED Second Applicant

AND CAVOTEC SA Third Applicant

AND CAVOTEC GROUP HOLDINGS NV Fourth Applicant

Hearing: 26 September 2011

Appearances: G Carter for applicants

Judgment: 26 September 2011

_{JUDGMENT OF ALLAN J}

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 4 pm on Monday 26 September 2011

Solicitors:

Chapman Tripp Ltd Christchurch [e-mail]

CAVOTEC MSL HOLDINGS LIMITED HC AK CIV 2011-404-3891 26 September 2011

[1] This is an application for orders approving a Scheme of Arrangement, pursuant to Part 15 of the Companies Act 1993 (the Act).

[2] The Cavotec Group has worldwide business interests, with revenues earned in the ports and marine sector, the airports industry sector, the mining and tunnelling sector, and general industry.

[3] The Arrangement effects a restructuring of the Cavotec Group, whereby shareholders in Cavotec MSL Holdings Ltd (Cavotec MSL), a company incorporated in New Zealand, will exchange their shares for shares in Cavotec SA, which will be listed on the NASDAQ OMX, Stockholm. The commercial purpose underpinning the proposed Arrangement is to improve the liquidity of Cavotec MSL’s shares. The board of directors of Cavotec MSL believes that those shares will become more attractive to international purchasers if they are exchanged for shares in a European registered company.

[4] On 12 July 2011, I made a number of initial orders pursuant to s 236(2) of the Act. The directions were concerned with the giving of notice to members of Cavotec MSL and with the conduct of a meeting at which the proposals could be considered.

[5] Mr Carter appears this morning to seek a final order pursuant to s 236(1) of the Act, the applicants having complied with my earlier directions. The applicants have filed a further affidavit by Mr Pope, a director of Cavotec MSL. He deposes to the steps taken by the applicants in compliance with the court’s directions.

[6] I am satisfied that:

(a) the proposed Scheme Plan, in respect of which the court’s approval is now sought, remains in the form annexed to the application for initial directions.;

(b) the necessary shareholder documents were sent to Cavotec MSL shareholders more than ten working days prior to the special meeting to vote on the Arrangements, in accordance with the earlier directions;

(c) the required vote of Cavotec MSL shareholders was undertaken at the special meeting of shareholders directed to be held on 1 September

2011, and at the meeting, a special resolution was passed by a majority of 92.61% of the votes.

[7] Neither the applicants nor counsel are aware of any formal or informal opposition to the application for final orders.

[8] The implementation of the Arrangement required the approval in writing of the listing committee of NASDAQ OMX Stockholm, of Cavotec SA’s application to list shares. Accordingly, the present application for approval of the Arrangement by the court seeks an order to take effect subject to the approval in writing of the listing committee.

[9] This morning, however, Mr Carter has handed up both English and Swedish versions of an approval by the listing committee of NASDAQ OMX given last week to the listing of Cavotec SA’s shares, in accordance with which those shares may be traded with effect from 19 October 2011. There is accordingly now no need for any order of the court to be made subject to the approval of the listing committee of NASDAQ OMX.

[10] The generally accepted test for the exercise of the court’s discretion to approve an Arrangement, is the well-established “intelligent person of business” test, as outlined by Smith J in Re CM Banks Ltd.[1] In short, it is appropriate for approval to be given if it has been established that:

(a) There has been compliance with the statutory provisions as to meetings, resolutions, the application to the court and the like;

(b) The scheme has been fairly put to the class or classes concerned, and that the material supplied to shareholders provides all the information reasonably necessary to enable the recipients to judge and vote upon the arrangement;

(c) The class was fairly represented by those who attended the meeting, and that the statutory majority were acting bona fide;

(d) The scheme was such that an intelligent and honest business person, a member of the class concerned and acting in respect of his or her interest, might reasonably approve.

[11] Earlier I had ordered that voting was to be undertaken by all of the shareholders in Cavotec MSL as a single class. Shareholders were advised that the directors of Cavotec MSL and the other applicants unanimously recommended the proposed Arrangement. Those directors are experienced business persons who are well placed to assess the fairness of the Arrangement to Cavotec MSL shareholders.

[12] Moreover, the proposed restructuring which has given rise to the current application was announced on the NZX market announcement platform on

22 February 2011. So there has been a significant period of prior notice to shareholders, who unanimously passed the resolution to progress the proposed Arrangement at Cavotec MSL’s general meeting on 28 April 2011. It received overwhelming support at the special meeting of 1 September 2011 called to approve the Arrangement.

[13] The commercial purpose underpinning the Arrangement has been clearly explained both to the court and to the shareholders. I am satisfied that the Arrangement is such that an intelligent and honest business person might reasonably approve it, and that there is no reason for the court to withhold its approval.

[14] In reaching that conclusion, I note that the Arrangement has no implications for creditors, because Cavotec MoorMaster Ltd is to acquire all the assets and becomes liable for all of the debts of Cavotec MSL pursuant to the amalgamation

under the Arrangement. Cavotec MoorMaster Ltd will become the owner of all the shares in the Cavotec Group of Companies accordingly.

[15] For the foregoing reasons there will be orders that:

(1) The proposed scheme of arrangement as described in the Scheme Plan annexed to the originating application dated 21 September 2011 (the Arrangement) is approved and is binding upon the applicants, their shareholders and all such other persons as necessary to ensure that the Arrangement is effective in accordance with its terms, with effect from the Effective Date as defined in the Scheme Plan, being

3 October 2011 or such later date as the First Applicant may determine and not earlier than two working days after the date of this order.

(2) The applicants are granted leave to apply to the court at short notice for any necessary approval of any amendment, modification or supplement to the Arrangement.

C J Allan J

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[1] Re CM Banks Ltd [1944] NZLR 248. See also Re Milne & Choyce Ltd [1953] NZLR 742, and

Weatherston v Waltus Property Investments Ltd [2001] 2 NZLR 103.