Almida Group Unlimted & Ors, Re
[2023] EWHC 3561 (Ch)
Lightsource BP Renewable Energy Investments Holdings Ltd (Re The Companies Act 2006)
21 October 2024
[2024] EWHC 2648 (Ch)
High Court
A big company (Lightsource BP) is splitting up its US part and selling the rest to another big company (BP). A judge checked everything was done properly according to company law rules and made sure everyone got a fair deal, then approved the plan.
Key Facts
- •Scheme of arrangement under Part 26 of the Companies Act 2006.
- •Demerger of US assets (US Assets) held by Lightsource Renewable Energy US, LLC (LSBP US).
- •Acquisition of remaining shares in Lightsource BP Renewable Energy Investments Holdings Limited (the Company) by BP Alternative Energy Investments Limited (BP).
- •Creation of a new joint venture company to hold the demerged US Assets.
- •Reduction of capital necessary to effectuate the scheme.
- •Unanimous shareholder approval at the court meeting (excluding BP, who consented).
- •No objections from shareholders who didn't attend the meeting.
- •Minor concerns addressed regarding drafting and timing, but no material impact on the scheme.
Legal Principles
Four conditions for approving a scheme of arrangement: (A) statutory compliance; (B) fair representation of shareholders; (C) reasonable approval by an intelligent and honest shareholder; (D) no 'blot' on the scheme.
Re TDG plc [2009] 1 BCLC 445
Court cannot confirm reduction of capital before Part I of the scheme is complete.
Re TIP-Europe Limited [1988] BCLC 231
Section 641(2A) Companies Act 2006 prohibition on capital reduction in schemes where a person acquires all shares does not apply in this case.
Edwin Johnson J's judgment (referenced)
Court will not, as a matter of discretion, sanction a scheme confirming a capital reduction if the transaction could be effected without court intervention (Re Rylands-Whitecross Limited principle). This principle did not apply here.
Re Rylands-Whitecross Limited (21 December 2023 - unreported)
Five conditions for approving a capital reduction: (1) valid special resolution; (2) equitable treatment of shareholders; (3) proper explanation to shareholders; (4) discernible purpose; (5) no prejudice to creditors.
Sections 641 onwards of the Companies Act 2006; Re Ratners Group Plc [1988] BCLC 685; Re Thorn EMI Plc [1989] BCLC 613
Outcomes
Scheme of arrangement approved.
All statutory requirements met; no evidence of coercion or bad faith; commercially rational transaction; minor concerns addressed.
Associated reduction of capital approved.
All requirements for capital reduction met; valid special resolution; equitable treatment of shareholders; proper explanation; discernible purpose; no prejudice to creditors.