On 12 August 2011, Damien Templeton and Damian Hodgkinson of KPMG were appointed joint and several administrators (the "First Administrators") of the Company pursuant to a resolution of the directors of the Company under section 436A of the Corporations Act 2001 (“the Act”).
On 24 August 2011, the first meeting of creditors of the Company was held pursuant to section 436E of the Act and the First Administrators were replaced by Nicholas Martin, Daniel Bryant and Ian Carson of PPB Advisory (Melbourne) (the "Second Administrators") by resolution of the creditors.
After extensions of the period to convene the second meeting of creditors of the Company ("Second Meeting"), it was held on 7 September 2012 to consider a report and statement by the Second Administrators pursuant to section 439A(4)(a), (b) and (c) of the Act. Creditors resolved to adjourn the Second Meeting for a period of up to 45 business days.
At the reconvened Second Meeting of Creditors held on 8 November 2012, creditors resolved to accept a Deed of Company Arrangement ("DCA") in the form proposed. The DCA was executed on 29 November 2012 and Andrew Hewitt and Matthew Donnelly of Grant Thornton were appointed Deed Administrators.
As creditors are aware, the DOCA was varied on 4 March 2013 pursuant to Section 445(F) of the Corporations Act 2001 such that the DOCA would terminate and the Company be placed into liquidation if the DOCA had not been terminated in accordance with clause 15.1(a)(i) by 30 June 2013 and the Deed Administrators’ determined (acting objectively and reasonably) that it is in the best interests of the creditors that the DOCA terminate and the Company be placed into liquidation.
Notwithstanding that ARF had paid the Initial Fund, the forbearance period contained in the Sinopec Forbearance Deed had expired and was not extended. Accordingly, ARF exercised the option not to contribute the Further Fund on 29 June 2013 and at the same time indicated that they would provide a proposal to vary the DOCA.
As a consequence the Deed Administrators were not able to declare a dividend to creditors on 18 July 2013. ARF put a further proposal to the Deed Administrations and we formed the opinion that the proposal had the potential to provide a better return to creditors than they would receive in a liquidation scenario. Accordingly, we considered it to be in the best interests of all creditors that they be given an opportunity to consider this option. At a meeting of creditors held on 11 December 2013, creditors resolved that the Company further vary the DOCA. The varied DOCA was executed on 21 February 2014.
As detailed in our report of 29 November 2013 with respect to the 2nd Variation, the DOCA at the time was a 'holding DOCA' and required a further variation to ensure that the Company is returned to solvency upon the DOCA being wholly effectuated. Accordingly, ARF provided a further proposal to vary the DOCA to allow effectuation and to deal with claims as at the appointment of the First Administrators. At a meeting of creditors of the Company held on 23 January 2017, it was resolved that the DOCA be varied in accordance with section 445A of the Corporations Act 2001 to reflect the proposal annexed to the Deed Administrators’ report to creditors dated 12 January 2017. The varied DOCA also provides that the Section 444GA Application is to be commenced in satisfaction of part of the claim of ARF against the Company. Section 444GA allows the administrator of a deed of company arrangement to transfer shares in the company if the administrator has obtained either the written consent of the owner of the shares or the leave of the Court. On 2 March 2017, the Deed Administrators filed the Section 444GA Application in accordance with the Varied DOCA with the Federal Court.
Please forward all questions regarding the above or the Company’s financial position to Mr Hamish Molnar of this office on +61 3 8320 2222 or hamish.molnar@au.gt.com
