Alstom Limited v Alstom Transport Australia Pty Limited

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 2214 of 2013

AND: ALSTOM TRANSPORT AUSTRALIA PTY LIMITED ACN 165 157 451

JUDGE: JAGOT J DATE: 1 NOVEMBER 2013 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 These applications relate to companies forming part of the Alstom Group, of which the ultimate holding company is ALSTOM, which is listed on the various stock exchanges. ALSTOM operates in the thermal power, renewable power, transport and grid sectors and wishes to reorganise all of its subsidiaries, the apparent intent being that the subsidiaries operating in one of the four sectors should, in the corporate tree, be subsidiaries of companies operating in that sector. In the written submissions which have been provided in respect of the applications, the first plaintiff, Alstom Limited, is identified as AL. The second plaintiff, Alstom MSC Proprietary Limited, is referred to as AMSCPL. The third plaintiff, Alstom Power Site Services Proprietary Limited, is referred to as APSSPL, and the defendant, Alstom Transport Australia Proprietary Limited, is referred to as ATAPL, and I will adopt those abbreviations. 2 As explained in the evidence adduced before me and in the written submissions, what is proposed are three schemes as explained in the affidavit of Michael Vladimiroff, a director of AL. In short, pursuant to the first scheme, the transport business, and all assets, liabilities and employees of AL are to be transferred to ATAPL. In the second scheme, all assets, liabilities and employees of AMSCPL are to be transferred to AL. And in the third scheme, all assets, liabilities and employees of APSSPL are to be transferred to AL. In consequence, AMSCPL and APSSPL are to be deregistered, but without being wound up. 3 As explained in the written submissions, ATAPL is joined to the proceedings as a defendant because it is proposed that the transport business and all associated assets, liabilities, and employees of AL are to be transferred to ATAPL. Again, as explained in the submissions, while AL is the transferee under the proposed second and third schemes, it, of course, is already a party the proceedings and therefore it is unnecessary to join AL as a defendant. 4 As set out in the evidence before me, and as otherwise referred to in the written submissions, I am satisfied that the proposed reorganisation is capable of being carried out pursuant to the provisions of s 413 of the Corporations Act 2001 (Cth). 5 In addition, the position of creditors has been addressed, in particular in paras 72 and 73 of Mr Vladimiroff's affidavit. As indicated in para 73(f), ALSTOM Holdings has provided AL with a letter of support dated 22 April 2013 confirming that Alstom's group policy is to financially support its subsidiaries in order to enable them to fulfil their financial and legal obligations and stating that ALSTOM Holdings commits to maintaining this policy in relation to AL for a 12 month period commencing 22 April 2013. In addition, a letter on substantially the same terms has been provided to the holding company of AL. Otherwise, as set out in para 73(h) of Mr Vladimiroff's affidavit, the usual practice for payment of suppliers to AL, AMSCPL and APSSPL is for creditors to be paid in accordance with the invoice, and it is said that as at the date Mr Vladimiroff swore his affidavit, there are no creditors which are unpaid in accordance with their trade terms and no disputed debts as far as he is aware. 6 Accordingly, despite the fact that the Explanatory Statement which incorporates the relevant financial information shows that AL has a negative net worth both before and after implementation of the schemes, I accept the evidence put before me, including the submission as well, that I should have no concerns about current creditors. The defendant, the proposed transferee of the assets, liabilities and employees of the transport business of AL, has been capitalised with $10 million. 7 The evidence also addresses in some detail the position of employees, because each transferor company has employees who will be transferred. I accept the submission that the evidence discloses an extensive program of consultation with employees, and in addition it appears that no issue of concern has been raised by or on behalf of the employees about what is proposed to take place. 8 I accept also the submission which is put that the reorganisation involved with the first scheme, that is, the transfer of the transport business from AL to ATAPL is a reconstruction within the scope of s 413. I also accept that the reorganisations involved with the second and third schemes constitute an amalgamation, in the sense that all corporators of the scheme company are parties to the amalgamation because they will have gone through the s 411 process. There is a reduction, for practical purposes, of two or more organisations of capital to one, and two or more incorporated companies to one, and the ultimate common shareholder of both the transferrer and transferee companies remain. 9 Other than this, the only matters I note at this stage are that ASIC waived the requirement for an independent expert opinion. ASIC otherwise provided the usual letter that it had had adequate opportunity to consider the matter and did not propose to appear at this first court hearing, and indeed, ASIC has not appeared. 10 For these reasons, I can see no reason not to make the orders which have been put before me, and accordingly, I make orders 1 through to 17. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.