Following the public announcement of the plan, the target company (with the assistance of the bidder) will prepare a disclosure document known as the «plan booklet» to obtain shareholder approval. It is possible for foreign companies to introduce a system of arrangements sanctioned by the English courts, but the court must be satisfied that there is a sufficient link between the foreign company and England to ensure its jurisdiction. In this situation, various laws and regulations apply that go beyond the scope of this notice and legal advice must be sought. The target company submits a draft schematic brochure to ASIC for review, which will take at least 14 days. It is possible to challenge an arrangement regime for certain reasons, for example because. B a class was malformed. Therefore, it is essential that the classification of creditors and/or shareholders is seriously considered in order to minimise the risk of this risk. To belong to the same class, group members must have similar (not necessarily identical) rights to each other so that they can discuss the terms and agreements of the scheme with each other. The correct composition of classes depends on the regime and individual circumstances, although professional consultants can help you here. The first step in the program process is usually for the bidder to get closer to the target with an indicative bid to propose a system in which the bidder would acquire 100% of the target. The plan brochure usually contains all the information known to the target company and the bidder that is essential for a target shareholder`s decision on voting on the proposed plan. For the system to be approved, a corresponding resolution must be passed by each class of target shareholders at the plan meeting: the objective will then be the shareholders` vote on whether the plan should be approved at the plan meeting. The removal of the ASX target will usually take place shortly after the implementation of the program.

A plan of arrangement is a court-approved arrangement between a corporation and its shareholders or creditors. These are not actually insolvency proceedings and can be used by both solvent and insolvent companies to resolve problems or issues with their creditors and/or members. However, insolvent companies regularly use settlement mechanisms to restructure their debt or agree on a way forward with creditors to avoid formal insolvency. Once a plan of composition has entered into force, it applies to all creditors and/or members of the class or classes concerned. This means that, unlike a voluntary business agreement (CVA), secured creditors are also bound by the system, so debts to secured creditors can be cancelled or reduced without their unanimous consent. In South Africa, the relevant provisions for the implementation of a plan of arrangement are found in the Companies Act 2008, No. 71 of 2008, sections 114 and 115. It is common for some creditors to agree with the company before the approval meeting that they will vote in favor of the plan. This gives the company a certain degree of certainty that the system will receive the necessary approval. To this end, companies are allowed to create incentives for these creditors, but it should be remembered that this could affect class differences and potentially affect the «fairness» of the system. Arrangement systems have become increasingly popular in recent years, as they are the preferred means of making «acquisitions» of listed Australian companies.

Before the plan proposal is publicly announced, the bidder and the target company typically enter into an «agreement on the implementation of the system» which: The Court can only approve the plan if ASIC has told the court that ASIC does not oppose the plan. Prior to the second hearing, the target will obtain confirmation from ASIC that the statement will be made available to the court. Following the ASIC review, the target will seek court approval at the «first court hearing» to send the plan booklet to all Target shareholders and call a meeting of Target shareholders to vote on the plan. Arrangement schemes are used to make arbitrary changes to the structure of a company and are therefore used when a reorganization cannot be achieved by other means. They can be used, among other things, for debt rescheduling, for redemptions and for the repayment of capital. .

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