On 25 September 2023, Technology Metals Australia Limited (TMT) announced a proposed merger with Australian Vanadium Limited (AVL) via a Scheme of Arrangement (Scheme), under which AVL will acquire 100% of the TMT Share on issue.
In general terms, a Scheme of Arrangement is a shareholder and court-approved statutory arrangement between a company and its shareholders that becomes binding on all shareholders by operation of Part 5.1 of the Corporations Act. The scheme structure can be used to reconstruct a company’s share capital, assets or liabilities. It is typically used by listed companies in Australia to merge with or acquire other businesses.
There are a number of conditions precedent to a Scheme that must be satisfied. Shareholders will be provided with a Scheme Booklet in connection with a Scheme. A Scheme Booklet generally contains all information known to the target and the bidder that is material to a target shareholder’s decision as to how to vote on the proposed scheme. The Scheme Booklet is reviewed by both ASIC and the Court before it is provided to shareholders. The process includes:
If a Scheme is approved by the requisite majorities and by the Court, and all other conditions to the Scheme are satisfied or waived (where applicable), all of the target shares will be transferred to the bidder for the proposed scheme consideration. This will include the target shares held by shareholders who if you voted against the Scheme.
If a Scheme is not approved by the requisite majorities or the Court, the target will remain an independent company and its shareholders will continue to hold their shares in the target.
You can read the TMT Scheme Booklet here.
The Supplementary Scheme Booklet released on 20 December contains information regarding the increased consideration and related matters. TMT Shareholders should read the Supplementary Scheme Booklet together with the Scheme Booklet released to the ASX on 5 December 2023 before deciding on how to vote at the Scheme Meeting.