Ruling addresses parties' requested exemption from US Securities Act registration requirements
The Federal Court has approved a scheme of arrangement between De Grey Mining Ltd and its shareholders under s. 411(4)(b) and exempted it from compliance with s. 411(11) of the Corporations Act 2001 (Cth) relating to the scheme.
At a court hearing on 10 March, the court issued orders regarding a planned shareholder meeting. On 16 April, De Grey’s shareholders pushed through with this meeting and voted in favour of a resolution agreeing to the scheme of arrangement.
Under the scheme, bidder Northern Star Resources Limited would acquire all De Grey’s issued share capital from De Grey’s shareholders, who would each get 0.119 new ordinary shares in Northern Star for every ordinary share in De Grey as consideration for the scheme.
Non-electing small shareholders or ineligible foreign shareholders were exceptions. For these shareholders, a sale agent would sell the scheme consideration, and those shareholders would receive the net proceeds.
De Grey and Northern Star wanted to rely on court approval of the scheme to qualify for an exemption from the registration requirements under s. 3(a)(10) of the Securities Act 1933 (US) relating to the implementation of the scheme and the provision of consideration under the scheme.
In De Grey Mining Ltd, in the matter of De Grey Mining Ltd (No 2), [2025] FCA 396, the Federal Court approved the scheme of arrangement between De Grey and holders of fully paid ordinary shares in De Grey’s capital. The court found that De Grey’s members voted in favour of a resolution approving the scheme under ss. 411(4)(b) and 411(6) of the Corporations Act.
The court then exempted De Grey from compliance with the s. 411(11) requirement to annex a copy of the s. 411(4)(b) orders to the company’s constitution under s. 411(12) of the Corporations Act since the scheme would not alter the rights of De Grey’s members, creditors, or others dealing with the company.
Lastly, the court ordered De Grey to lodge an office copy of its orders with the Australian Securities and Investments Commission (ASIC).
The court said the shareholders convened and held the meeting in compliance with aspects of its orders dated 10 March. The court noted that De Grey’s members voted in majorities meeting and exceeding what s. 411(4)(a)(ii) of the Corporations Act required. Specifically, 99.38% of votes cast and 83.10% of shareholders voting supported the resolution.
The court determined that this case also satisfied the requirements in s. 411(17) of the Corporations Act and noted that the ASIC gave a written statement complying with s 411(17)(b) of the Corporations Act.
The court said this case also met the requirements of good faith, a proper purpose, no oppression of minority shareholders, no breach of public policy, a fair and reasonable scheme, and a full and fair disclosure of all information material to the decision.
The court then addressed the parties’ requested exemption from the US Securities Act registration requirements. The court declined to express its opinion on the extent to which its procedures or processes could satisfy the requirements for that exemption.
The court noted that none of De Grey’s shareholders “gave notice of any intention to appear at the second court hearing to oppose the approval of the scheme, and none in fact opposed it.”
