This decision confirms the utility of section 444GA of the Corporations Act 2001 (Cth) to achieve debt for equity restructures of listed companies, even where there is a sophisticated counter-attack by shareholders.  In instances where the value of the pre-existing equity is nil on a liquidation scenario, majority creditors with loan to own ambitions can put forward a restructure proposal through a deed of company arrangement with a degree of confidence.  Although the shareholders’ application was unsuccessful in this case, it may foreshadow increased shareholder opposition to section 444GA applications, which could delay the effectuation of the deed of company arrangement and increase the costs of the restructure.

For further analysis of the decision, see G+T Restructuring Alert on 23 February 2015.