- Unreported Judgment
SUPREME COURT OF QUEENSLAND
No BS 11108 of 2007
IN THE MATTER OF VIKING INDUSTRIES LIMITED ABN 41 010 559 903
VIKING INDUSTRIES LIMITED
ABN 41 010 559 903
HIS HONOUR: This is an application under section 411 of the Corporations Act for the approval of a scheme of arrangement. The scheme is between the applicant, Viking Industries Limited, and its shareholders other than the holders of certain shares described as the "excluded shares". The scheme involves the acquisition by Provik, which effectively holds just under 30 per cent of Viking shares, of the remainder of Viking shares, at a price of $1.09 per share. The shares presently held by Provik or its associates are the excluded shares. No party other than the applicant Viking appears on this application.
The Australian Securities & Investments Commission, ASIC, has advised by letter dated 4 February 2008, expressly written under section 411(17)(b), that it has no objection to the scheme, being satisfied that the scheme has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6 of the Act. The letter further advised that ASIC was not intending to appear at the hearing.
At the first Court hearing for this scheme on 12 December 2007, I ordered that there be a meeting of members on 31 January 2008. I approved the terms of the explanatory booklet then proposed to be sent to members. I am satisfied that a booklet, effectively in those terms, was posted to each member. That is proved by an affidavit of Mr P N Nicholls, to which is exhibited a statement in Form 530 signed by him.
There are some differences between the booklet posted to members and that before me on the first Court hearing, but they are insignificant, involving differences in pagination, formatting and the addition of a reference to the Contents page. I am also satisfied that the booklet was lodged with ASIC after the first Court hearing later that day.
I am satisfied that the meeting was duly held and that the necessary majorities were obtained. A total of 390 members holding 98,569,258 shares in Viking were present at the meeting in person or by proxy and voted. This represents 36.38 per cent of the members of Viking, holding 59.18 percent of the total number of shares. Three hundred and sixty-nine members holding 98,081,346 shares voted in favour of the scheme resolution. This represents 99.51 per cent of the votes cast. The number of members voting in favour of the scheme resolution represented 94.62 per cent of members present and voting either in person or by proxy. Against the scheme there were the votes of 21 members holding 487,912 shares.
A copy of the minutes of the meeting is exhibited to an affidavit of Mr Babon, Chairman of the Board of Viking and who acted as Chairman of the Court ordered meeting. According to the minutes there were two questions in response to his invitation for questions and comments from the floor. One member asked whether if the scheme was approved the Court could disallow that approval. Another member asked whether Viking's board was satisfied that the necessary funding was secure.
It appears that there was no expressed opposition by any member, consistently with there being no appearance by or on behalf of any member at yesterday's hearing. An affidavit from a solicitor for Viking proves that no person communicated anything to the effect that he or she intended to appear, as shareholders were asked to do if intending to appear. The hearing was duly advertised in the Courier-Mail on 30 January 2008.
The shares in Viking are valued by an independent report of Price Waterhouse Coopers Securities Limited. Mr Wellington from PWC is a co-author of its report and he has verified the report by affidavit. The report was contained in the explanatory booklet. The factual content of that booklet beyond the PWC report is also proved. According to the PWC report the scheme is fair and reasonable and in the best interests of Viking shareholders in the absence of a superior offer emerging. PWC valued the various business units of Viking, concluding that Viking had a range of equity value from 128.1 million to 133.2 million dollars, equating to a value per share of seventy-six to eighty cents. The proposed price of $1.09 represents a premium of 36.3 to 43.3 per cent over that value.
The independent directors of Viking unanimously recommended that upon the basis of PWC's advice, and in the absence of a superior offer emerging, members should vote in favour of the scheme. In my conclusion the price offered is fair and reasonable.
The scheme provides for a trust fund into which Provik will pay and from which shareholders will be paid for their shares. Funds will be held upon an express trust for the shareholders until payment out, avoiding what has been described as a performance risk in such cases. Further, Provik has executed a Deed Poll in favour of all shareholders by which it undertakes to pay the price.
I have evidence from the director of Provik as to the finance facility in place for the implementation of this scheme, and according to that the funding is available and there is no substantial doubt raised by any other material as to that matter. The scheme is the subject of an agreement between Viking and Provik entitled "The Transaction Implementation Agreement." According to certificates executed on behalf of each of Viking and Provik, all conditions precedent in that agreement, and in the scheme of arrangement, other than that relating to Court approval, have been satisfied or waived.
In summary, the applicant has complied with the requirements of section 411, shareholders have been fairly appraised of the proposal and have approved it by well more than the required majorities, and the scheme is fair and reasonable. The scheme will be approved. It is appropriate to exempt Viking from the requirements of section 411(11).
It is ordered that pursuant to section 411(4)(b) of the Corporations Act, the scheme of arrangement between the applicant, Viking Industries Limited, and its shareholders, other than the holders of an excluded share as defined therein, in the form annexed to a document which I have marked "A", be approved and that Viking be exempted from compliance with section 411(11) of the Act in relation to that order.
There will be no order as to costs.
I have initialled the draft order in those terms and placed it with the papers.
- Published Case Name:
Viking Industries Ltd, Re
- Shortened Case Name:
Re Viking Industries Ltd
 QSC 31
06 Feb 2008
No Litigation History