McCallum, in the matter of Basslink Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2021] FCA 1556

DAVIES J: 1 The first plaintiffs (the administrators) are the joint and several administrators of the second to seventh plaintiffs (the Basslink Companies). On 12 November 2021, the Basslink Companies went into voluntary administration and the administrators were appointed pursuant to s 436A of the Corporations Act 2001 (Cth) (Corporations Act). Also on this date, Peter Gothard, Peter McCluskey and Brendan Richards were appointed as joint and several receivers and managers of the Basslink Companies (the receivers). The receivers are in control of the Basslink Companies. 2 By an originating process dated 3 December 2021, the administrators made an urgent application for an extension of time seeking orders under ss 439A(6) and 447A(1) of the Corporations Act extending the convening period for the second meeting of creditors prescribed by s 439A(5) of the Corporations Act and providing for the meeting to be held at any time during, or within five business days after the end of, the convening period as extended. Unless extended, the convening period ends on 10 December 2021. The administrators believe that an extension is necessary in order to stabilise operations and maximise the sale price of the business. 3 The application is supported by an affidavit of Steward Alexander McCallum (an administrator) and Peter Gothard (a receiver).

background 4 Each of the Basslink Companies is a company incorporated in Australia. The sixth plaintiff is the parent company of the second plaintiff (BPL), third plaintiff and fourth plaintiff. The sixth plaintiff is wholly owned by the fifth plaintiff (Coral Holdings). Coral Holdings and the seventh plaintiff is owned by the ultimate parent company, CityLink Investments Pty Ltd, a Singapore domiciled company. 5 BPL owns and maintains a 370 kilometre high voltage, direct current monopole electricity interconnector between the State of Tasmania and the State of Victoria. This is the sole interconnector connecting Tasmania to the Australian mainland and is a valuable infrastructure asset. 6 BPL also operates land-based and underwater assets including two converter stations, transition stations and a land-based cable system, in addition to an underwater buried cable system which runs for 290 kilometres at a maximum water depth of 80 metres. 7 The administrators have identified that the Basslink Companies have approximately 59 creditors. There are three major creditors who are owed approximately $785 million.

extension of the convening period 8 The Court is given the power to extend the convening period by s 439A(6) of the Corporations Act. The exercise of power is discretionary, but the circumstances in which the Court will extend a convening period are well established: Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717; (2020) 144 ACSR 347 (Strawbridge), 370 [64]. The categories of case in which it is generally appropriate to grant an extension include where the size and scope of the business is substantial and where the extension will enable the sale of the business as a going concern: Strawbridge, 370 [65]. 9 The administrators and receivers were appointed to the Basslink Companies on 12 November 2021 and the first concurrent meeting of the creditors was on 24 November 2021. At this meeting, the creditors were informed that the administrators may make an application to the Court to extend the convening period of the second meeting of creditors for a period of up to six months. The creditors did not raise any objections to the proposed extension of the convening period. 10 The convening period for the second meeting of creditors, if no extension was granted, would end on 10 December 2021. The extension sought is for a period of six months, to 23 May 2022, with provision to convene sooner if required. 11 The administrators are of the view, and I agree with their view, that it is in the best interests of the creditors to extend the convening period for the following reasons: (a) First, the administrators have stated that it will not be possible for them to provide meaningful advice to creditors in the report they are required to prepare pursuant to s 75-225(3) of the Insolvency Practice Rules (Corporations) 2016 (Cth) until the investigations and other tasks as outlined at paragraphs [48] to [58] of the McCallum Affidavit have been undertaken and completed; (b) Secondly, both Mr McCallum and Mr Gothard have deposed that an extension of the convening period will maximise the chances of the sale of the business of the Basslink Companies as a going concern, in particular by retaining the benefit of the statutory moratorium and the flexibility to complete a restructure or sale by way of a Deed of Company Arrangement (DOCA). An extension of the administration period to facilitate either (or both) of: (a) the sale of the business of the company as a going concern, so as to maximise the value of the company's assets; or (b) the progression and assessment of a DOCA proposal that may provide a better return to creditors than a winding up, are well-recognised examples of situations where the Court has extended the convening period; (c) Thirdly, an extension of the convening period is in the public interest. Having additional time to stabilise the operation of the Basslink Companies will ensure the ongoing stability of the National Electricity Market and the reliable and continuous import and export of generated electricity to and from the Tasmanian and Victorian electricity markets, which has benefits for electricity consumers in relation to reliable supply and pricing. Further, the continuation of 'business as usual' operations will mean that the Basslink Companies are able to continue providing vital telecommunications services to the Tasmanian and Victorian public; (d) Fourthly, an extension of the convening period will avoid the costs associated with holding the second creditors' meetings prematurely, only to adjourn the meetings to a later date; (e) Fifthly, it is only by extending the convening period and allowing the sale process to run its course that the option of restructuring, recapitalising or selling the Basslink Companies by way of a DOCA can be kept open; and (f) Sixthly, the administrators have had discussions with the key stakeholders impacted by the administrations of the Basslink Companies and have been told by each of them that they do not object to the extension application. 12 I also propose to make an order under s 447A(1) of the Corporations Act, providing the receivers with the flexibility to convene the meeting at any time within the extended convening period, if the circumstances dictate that it is appropriate to do so. Should any creditor be aggrieved, there is provision in the orders to make application for a modification of time. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Davies.

Associate: Dated: 10 December 2021 SCHEDULE OF PARTIES VID 724 of 2021 Plaintiffs Third Plaintiff: BASSLINK AUSTRALIA GP PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 090 996 240 Fourth Plaintiff BASSLINK TELECOMS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 129 550 563 Fifth Plaintiff CORAL HOLDINGS AUSTRALIA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 126 887 750 Sixth Plaintiff NEXUS INVESTMENTS AUSTRALIA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 126 887 778 Seventh Plaintiff NEXUS AUSTRALIA MANAGEMENT PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) ACN 127 087 487