AMP Ltd [2003] FCA 1479

FEDERAL COURT OF AUSTRALIA

AMP Ltd [2003] FCA 1479 IN THE MATTER OF AMP LIMITED (ABN 49 079 354 519) N3054 OF 2003 EMMETT J 12 DECEMBER 2003 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N3054 OF 2003

IN THE MATTER OF AMP LIMITED (ABN 49 079 354 519)

PLAINTIFF

JUDGE: EMMETT J

DATE OF ORDER: 12 DECEMBER 2003

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the Scheme of Arrangement between the plaintiff and its ordinary shareholders which is annexed hereto and marked 'A' be and is hereby approved; 2. these orders be entered forthwith.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N3054 OF 2003

IN THE MATTER OF AMP LIMITED (ABN 49 079 354 519)

PLAINTIFF

JUDGE: EMMETT J

DATE: 12 DECEMBER 2003

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 On 16 October 2003, I ordered, pursuant to s 411(1) of the Corporations Act 2001 (Cth) ('the Corporations Act') that a meeting of the members of the plaintiff, AMP Limited ('AMP'), be convened for the purposes of considering and, if thought fit, agreeing to an arrangement between AMP and its members: see In the matter of AMP Ltd [2003] FCA 1465. I now have before me an application by AMP for an order, pursuant to s 411(4)(b) of the Corporations Act, approving the arrangement comprised in the scheme which has been agreed to at the meeting of members so convened. 2 By the operation of s 411(10), any order made for the purposes of s 411(4)(b) will not have any effect until an office copy of the order is lodged with the Australian Securities and Investments Commission ('the Commission'). Further, under s 411(17), the Court must not approve an arrangement pursuant to s 411 unless either the Court is satisfied that the arrangement has not been proposed for the purpose of enabling any person to avoid the operation of Ch 6 of the Corporations Act (which deals with takeovers) or there is produced to the Court a statement in writing by the Commission that the Commission has no objection to the arrangement. 3 I am satisfied from the evidence contained in the affidavits read on the hearing of this application that a meeting of the members of AMP was convened in accordance with my order of 16 October 2003. In that regard, I have considered affidavits relating to activities of the following service providers in relation to the convening of the meeting: * Text Pacific Publishing Pty Ltd, formatting, typesetting and printing the Explanatory Memorandum; * Security Mail Pty Ltd, preparing packages for distribution by Australia Post to AMP members containing one or other of a hard copy package, a CD Rom package or a proxy package, according to whether or not the member had elected to receive notification in electronic form; * The Ball Group Pty Ltd, creating an internet web link to an electronic duplicate of the Explanatory Memorandum and a CD containing an electronic copy of the Explanatory Memorandum; * Technicolor Australia, burning duplicates of the CD created by The Ball Group Pty Ltd; * Australia Post, delivering the hard copy packages, CD Rom packages and proxy packages. 4 As I indicated in my reasons of 16 October 2003 for making orders convening the meeting of members of AMP, the Demerger (as defined in those reasons) involves several inter-related steps. The scheme of arrangement agreed to by members of AMP ('the Scheme') is conditional upon several conditions precedent. Under cl 1.3 of the Scheme, AMP is required to provide to the Court, on the hearing of the application pursuant to s 411(4)(b) of the Corporations Act, a certificate confirming whether or not all of the conditions precedent in the Scheme, other than those relating to the Court's approval and lodgement of an office copy of the order with the Commission, have been satisfied. A Conditions Precedent Certificate dated 11 December 2003 is in evidence before me confirming that the relevant conditions have been fulfilled. 5 The conditions included the passing of a resolution at an extraordinary general meeting of shareholders of AMP approving a capital adjustment. That meeting was held on the same day as the meeting convened by my earlier orders and the adjustment resolution was passed by 667,190,772 votes to 4,282,825. 6 At the meeting convened pursuant to my orders, a resolution was proposed as follows: '… pursuant to, and in accordance with, the provisions of section 411 of the Corporations Act 2001 (Cwlth), the arrangement proposed between AMP Limited and the holders of its fully paid ordinary shares, designated the "Scheme", as contained in and more particularly described in the document accompanying the notice convening this meeting is agreed to (with or without modification as approved by the Federal Court of Australia).' On the taking of a poll, 139,190 members present, either in person or by proxy, voted in favour of the motion and 3,527 members present, either in person or by proxy, voted against the motion. Those voting in favour of the motion were the holders of 668,478,183 shares. The members voting against the motion were the holders of 4,384,101 shares. It follows that the requirements of s 411(4)(a) have been satisfied in that the resolution in favour of the Scheme was passed by a majority in number of the members and was passed by 75 per cent of the votes cast on the resolution, on the basis that each member had one vote for each share held. 7 There is also in evidence before me a letter dated 11 December 2003 from a delegate of the Commission to AMP's solicitors in the following terms: 'I advise that, under paragraph 411(17)(b) of the Corporations Act 2001 ('Act'), the Australian Securities and Investments Commission ('ASIC') has no objection to the Scheme of Arrangement between AMP Limited and its members on the basis that it is 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. Therefore I advise you that ASIC does not currently propose to appear to make submissions, or intervene to oppose the Scheme, at the second hearing which commences today. This letter is provided in reliance on the affidavit of Mr Paul Leaming referred to below and on the basis that AMP will draw to Justice Emmett's attention the matters referred to below which ASIC considers may be relevant to His Honour in deciding whether to exercise his discretion to approve the scheme. As disclosed in the Explanatory Memorandum for the Scheme, if implementation of the Scheme would result in an event of default under the terms of the Income Securities or other debt securities, AMP would need to repay or refinance the securities. Perpetual Trustee Company Limited, the trustee for AMP's Income Securities, has applied to the Supreme Court of New South Wales for judicial advice in relation to the effect of the Scheme on the Income Securities. The application has been adjourned until Thursday 18 December 2003. In his affidavit dated 11 December 2003, Mr Paul Leaming states that AMP has adequate credit facilities in place to enable it to repay the relevant debt securities if required and that he does not consider that any additional interest expense and cost that would be incurred in repaying the securities would have a material adverse effect on AMP's financial position, performance or prospects.' 8 In the course of the hearing of the application, senior counsel for AMP drew the Court's attention to three matters that were the subject of a Supplement to the Explanatory Memorandum, which was published for the benefit of AMP shareholders. The Supplement provides additional information to AMP members concerning recent developments in three areas as follows: * the publication of the United Kingdom listing particulars of HHG (as defined in my earlier reasons) and its likely listing date; * an application brought by Perpetual Trustee Company Limited ('Perpetual') seeking judicial advice in relation to the Income Securities issued by AMP in 1999; * AMP's decision to defer the application of approximately $600 million towards a restructuring of some of its outstanding senior and subordinated debt until the first quarter of 2004.