In the matter of HMA International Ltd

1. [1]

   By an originating process dated 25 March 2026, HMA International Ltd (HMA) seeks orders to convene scheme meetings in respect of two proposed members’ schemes pursuant to s 411 of the Corporations Act 2001 (Cth). It is proposed that ACP Argyle Street BidCo Pty Limited (ACP) will acquire the shares in HMA under the schemes. ACP Argyle Street Group Pty Ltd (ACP HoldCo) is a holding company of ACP.

2. [2]

   At a hearing on 17 April 2026, I made orders for the convening of scheme meetings and ancillary orders. These are my reasons for making those orders. I was assisted by the helpful oral and written submissions from Mr Ahmed SC and these reasons draw on those submissions.

Evidence

1. [3]

   HMA relied on:

The proposed schemes

1. [4]

   There are two proposed members schemes, which are referred to as the Management Scheme and the Ordinary Scheme. The schemes are inter-conditional and together provide for ACP to acquire all of the shares in HMA.

2. [5]

   HMA is an unlisted public company with headquarters in Australia. It is an industrial products and services company which supplies engineered wear solutions, flow and industrial products, materials handling systems and instrumentation to resources, energy and industrial customers in Australia and various international markets. As at 16 April 2026, HMA had on issue 73,170 ordinary shares. The cash consideration available under the schemes suggests that the value of HMA is approximately $171 million.

3. [6]

   ACP and ACP HoldCo are ultimately controlled by Anchorage Capital Partners, which is an Australian mid-market private equity firm. Anchorage has managed commitments of over $1 billion across multiple funds and co-investments.

4. [7]

   On 27 January 2026, HMA, ACP and ACP HoldCo entered into a scheme implementation deed in relation to the proposed schemes. The Management Scheme is a proposed scheme between HMA and persons known as the “Management Shareholders”. The Management Shareholders are persons who are shareholders of HMA, and who ACP and ACP HoldCo determine are Management Shareholders. That determination has occurred and the identity of the Management Shareholders is fixed and has been identified. There are 55 persons (including corporate vehicles) who constitute Management Shareholders.

5. [8]

   Under the Management Scheme, the shares of HMA held by the Management Shareholders will be acquired by ACP. As consideration, the Management Shareholders will have the ability to elect between:

6. [9]

   The Ordinary Scheme is a proposed scheme between HMA and all HMA shareholders other than the Management Shareholders (Ordinary Shareholders). Under the Ordinary Scheme, the Ordinary Shareholders will receive the Cash Consideration.

7. [10]

   In the case of both the Cash Consideration and the Scrip Consideration, the consideration payable may be reduced if HMA elects to pay a dividend to its shareholders. The payment of such a dividend is identified as a “Permitted Dividend” and must not exceed $140 per share.

8. [11]

   ACP and ACP HoldCo have executed deeds poll under which they have agreed that they will observe and perform steps under the schemes as if they were a participant and will provide the scheme consideration in accordance with the schemes.

9. [12]

   HMA formed an independent board committee in relation to the schemes (IBC). The IBC excludes directors who have been identified as Management Shareholders. The IBC has unanimously recommended that all shareholders vote in favour of the scheme that is relevant to them, in the absence of a superior proposal and subject to the Independent Expert continuing to conclude that each relevant scheme is in favour of those shareholders who will be bound by it. In respect of the Management Scheme, that view has been formed on the basis of the Cash Consideration only.

10. [13]

    Clause 3 of the schemes sets out conditions precedent to the implementation of the schemes. They include the scheme implementation deed remaining on foot as at 8am on the second Court hearing date, and the satisfaction or waiver of certain conditions identified in clause 3.1 of the scheme implementation deed.

11. [14]

    The scheme implementation deed contains certain exclusivity and break-fee provisions. Clause 12.2 of the scheme implementation deed provides that a break fee of $1.8 million may be payable by HMA to ACP in certain circumstances, which do not include a failure by HMA shareholders to vote in favour of the schemes at the scheme meeting. The break fee will be payable in circumstances including if a majority of the IBC withdraws its recommendation in respect of the schemes. There are various exceptions to the circumstances where a break fee is payable. Those exceptions are identified in clause 12.2(b) of the scheme implementation deed and include where a competing proposal is announced for HMA, and a third party completes such a proposal within 12 months of the announcement.

12. [15]

    The amount of the break fee is approximately 1.05% of the equity value of HMA of approximately $172 million, as implied by the scheme consideration of $2,340 per share (when calculated by reference to Cash Consideration) and the total issued capital of HMA being 73,170 shares. This level of break fee is consistent with the 1% tolerance set out in the Takeovers Panel’s Guidance Note 7: Deal protection at [48].

13. [16]

    Clause 12.2 of the scheme implementation deed also provides for a “reverse break fee” of approximately $1.036 million that may be payable by ACP to HMA in certain circumstances.

14. [17]

    Clauses 11.1 to 11.4 of the scheme implementation deed impose “no current discussions”, “no-shop”, “no-talk” and “no due diligence” obligations on HMA. On 15 April 2026, HMA, ACP and ACP HoldCo executed a side letter to the scheme implementation deed, pursuant to which the parties agreed that clause 11.7(a) (providing a fiduciary exception) of the scheme implementation deed be amended as set out in the side letter.

15. [18]

    Clause 11.5 of the scheme implementation deed requires HMA to notify ACP and ACP HoldCo of matters, including if there is an approach with respect to a competing proposal. Further, clause 11.6 of the scheme implementation deed provides ACP with a “matching right” in respect of any competing proposal.

16. [19]

    It is proposed that Mr Golja, or failing him, Mr Anthony Rogers (an independent board member of HMA), will act as chairperson of the meetings.

17. [20]

    With respect to proposed shareholder communications, any shareholder with queries can call HMA's share registry on their general information line. There is no bespoke script prepared for use in communications with shareholders.

18. [21]

    An appropriate verification process has been undertaken in relation to the draft scheme booklet.

19. [22]

    The draft scheme booklet contains a report from an independent expert, RSM Corporate Australia Pty Ltd (RSM), which expresses the opinion that the schemes are fair and reasonable and in the best interests of HMA’s shareholders. RSM has provided a valuation range for HMA shares of between $1,703.48 to $2,167.73, with a preferred value of $1,928.12. That compares with the Cash Consideration of $2,340, or $2,243.96, assuming the payment of certain Permitted Dividends.

20. [23]

    RSM’s opinion in respect of the Management Scheme is based on the Cash Consideration only. That is because RSM has concluded that the realisable value of the Scrip Consideration is considerably less than the value of the Cash Consideration. This is made clear in both the Independent Expert’s Report and the draft scheme booklet.

21. [24]

    On 2 April 2026, ASIC was given notice of the first Court hearing as required by s 411(2) of the Corporations Act via the ASIC regulatory portal. ASIC was also provided with a draft of the scheme booklet, which included the draft independent expert report, draft schemes of arrangement, deed polls and notices of meetings.

22. [25]

    On 15 April 2026, ASIC provided a letter to the directors of HMA advising that while it would not provide a written statement that it does not object to the schemes under s 411(17)(b) until the second Court hearing, it was satisfied that it had been given the required notice and had been afforded a reasonable opportunity to examine the terms of the schemes and to make any submissions to the Court. ASIC also advised that it did not propose to appear, make submissions or intervene to oppose the schemes.

Legal principles in relation to convening a scheme meeting

1. [26]

   Section 411(2) of the Corporations Act sets out the circumstances in which a scheme meeting must not be ordered. Beyond those matters, the Court retains a discretion as to the whether a meeting should be ordered: Re CSR Ltd (2010) 183 FCR 358; [2010] FCA 34 at [8] (Keane CJ and Jacobson J). The role of the Court at the first court date is “emphatically not” to consider the merits or fairness of the proposed scheme, but rather to decide whether there should be a meeting and the manner in which that meeting should be summoned and conducted: Re CSR Ltd at [72] (Finkelstein J).

2. [27]

   A court will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the court would be likely to approve it: FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69, per Street CJ at 72 as cited in ASIC v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15 at 504-505 (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ). However, the High Court has stressed that the decision to convene a scheme meeting is an interlocutory decision, such that the grant of leave to summon a meeting under s 411(1) does not amount to a determination that the proposed arrangement is one that falls within the scope of the section. Rather, the determination to convene the meeting is preliminary to the final determination which is to be made when the matter comes back to the court for approval after the holding of the meetings that have been directed: Marlborough Gold Mines at 504-505.

3. [28]

   In Re Foundation Healthcare Ltd [2002] FCA 742; 42 ACSR 252, French J emphasised the nature of the inquiry by the Court at the first hearing date and noted:

4. [29]

   The Court will not convene a scheme meeting where the proposed scheme is clearly futile. To do so would result in the unnecessary wastage of resources. But any such assessment must also be viewed in a context where there will be other occasions after the first Court hearing to consider any asserted deficiencies in the scheme: Re CSR Ltd at [64] (Keane CJ and Jacobson J).

5. [30]

   Of paramount importance in determining whether a scheme meeting should be convened is that the Court should be satisfied that there has been sufficient disclosure to those who will be affected by the scheme of its details and effect: Re Central Pacific Minerals NL [2002] FCA 239 at [8] (Emmett J) as cited in Re CSR Ltd at [12] (Keane CJ and Jacobson J). It is also important for the Court to be satisfied that there has been a reasonable opportunity for ASIC to examine the terms of the arrangement.

It is appropriate to convene the scheme meetings

1. [31]

   The proposed transaction is to be effected by way of two separate schemes, rather than seeking to have one scheme in which there are two classes of shareholders. The plaintiff has not identified any previous scheme in which this precise approach has been expressly considered in the past (in the sense of separate schemes for persons who have the same underlying legal rights, but whose rights are treated differently under the proposed control transaction).

2. [32]

   I accept this approach is permissible under the Corporations Act. The approach recognises differences between the two cohorts of shareholders who are treated differently under the proposed transaction, ensures that each cohort is able to appreciate the implications of the schemes and vote in light of that understanding, and provides a simplified way to treat these cohorts. It does so consistently with existing authority that would otherwise deal with class issues. It does so without the need to engage in a detailed analysis of class composition. I accept that the approach helps to facilitate focus on whether each scheme is appropriate by reference to a clear and defined cohort of shareholders, rather than seeking to interrogate the boundary between two classes of shareholders within the one scheme.

3. [33]

   The scheme of arrangement provisions are intended to have a flexible operation. It is that flexibility that gives the provisions their efficacy: Re Opes Prime Stockbroking Ltd (No 2) (2009) 179 FCR 20; [2009] FCA 813 at [48] (Finkelstein J). As such, any approach to the construction of s 411 should ensure that the section has that flexible operation.

4. [34]

   Section 411(1) provides that a company may enter into a compromise or arrangement with its members, or any class of them. The statute is directed to a “class of [members]”, rather than a “class of shares”. This language is sufficient to contemplate a scheme between a company and any subset of its members.

5. [35]

   The phenomena of a scheme directed to only a subset of members of a corporation is not unusual. For example, where schemes have been used to effect a change of control transaction, the scheme participants will exclude the acquirer and its related parties who already hold shares in the target company: see, for example, Re iSelect Ltd [2022] FCA 1329; 164 ACSR 310 at [2]-[3] (Anderson J); Re Tassal Group Ltd (No 2) [2022] NSWSC 1619 at [2] (Black J). In these circumstances, the scheme excludes from its operation a portion of shareholders.

6. [36]

   Moreover, the Management Shareholders and the Ordinary Shareholders constitute, or could be thought of as constituting, different classes for the purposes of the proposed control transaction. The Ordinary Shareholders have the right to receive the Cash Consideration. By contrast, the Management Shareholders have the right to receive the Cash Consideration, the Scrip Consideration, or a mixture of the two. The authorities recognise that a right to elect between cash and scrip consideration will ordinarily be sufficient to place a shareholder in a different class to a shareholder who has only the right to receive cash consideration: see, for example, Re Thinksmart Ltd [2022] FCA 1314 at [22]-[23] (Jackson J).

7. [37]

   There is nothing in the Corporations Act that prohibits shareholders in different classes from being the subject of separate schemes. It is commonplace for transactions to be effected where shareholders holding shares with different rights attaching to them (and different treatment under proposed control transactions) are the subject of separate, but inter-conditional schemes: see, for example, Re Professional Investment Holdings Ltd [2010] FCA 1193 and Re Airtrain Holdings Ltd [2013] FCA 209.

8. [38]

   I do not consider that there is anything unfair or otherwise objectionable about the use of multiple schemes in this case. It produces the same outcome as if the Management Shareholders and Ordinary Shareholders constituted two classes under the one scheme. In both cases, approval of the transaction requires that the Management Shareholders and Ordinary Shareholders both separately approve of the proposed transaction by the relevant statutory majorities. They each consider their positions in circumstances where there is a unitary scheme booklet. Each cohort has full visibility of the terms of the other scheme. I accept that the existence of two interconnected schemes in this case works no unfairness to either group of shareholder.

9. [39]

   As I have noted above, the independent expert has expressed the view in respect of the Management Scheme on the basis of the Cash Consideration only. I do not consider that to be an impediment to either scheme proceeding. The independent expert’s view, and the basis for it, is prominently disclosed in the draft scheme booklet.

10. [40]

    The Court has previously considered circumstances where an independent expert has considered the provision of cash consideration to be fair and reasonable, but did not consider scrip consideration to be characterised in that way. That has been held not to be an impediment to a scheme where (as here) shareholders have the option to choose between the cash and scrip consideration: Re Apiam Animal Health Ltd [2025] NSWSC 1563 at [17] (Black J).

11. [41]

    There is a shareholder’s agreement in place in respect of HMA. Clause 4(e) of that agreement provides for a quorum requirement of shareholders holding at least 60% of issued shares in the company. That requirement applies in respect of “Shareholder’s meetings”. I accept that this requirement does not apply in respect of a scheme meeting convened pursuant to an order of the Court. The concept of a “Shareholder’s meeting” is the kind of meeting referred to in clause 4(b) of the shareholder’s agreement. That clause provides for a meeting to be convened by a shareholder holding at least 5% of the shares of HMA, or by a director. A meeting convened pursuant to s 411 is not such a meeting and, therefore, the applicable quorum requirement does not apply.

12. [42]

    The Management Scheme involves the potential issue of “stub equity” in a proprietary company to Management Shareholders. I accept that in the circumstances of this case, that approach is permitted. ASIC Corporations (Stub Equity in Control Transactions) Instrument 2020/734 has the effect of prohibiting the issue of stub equity in proprietary companies in certain instances. It does so by disapplying s 708(17), which would otherwise provide an exception from disclosure requirements in the case of a scheme of arrangement. The requirement to issue a disclosure document does not apply in this case because other exemptions from the disclosure requirements under s 708 apply. In particular, as specified in the draft scheme booklet, “This Scheme Booklet is not a disclosure document required by Chapter 6D of the Corporations Act as the New ACP HoldCo Shares are being issued without such disclosure document in accordance with sections 708(1), 708(8) and 708(12) of the Corporations Act.” I accept that ASIC Instrument 2020/734 does not apply in the circumstances of this case.

13. [43]

    Performance risk is managed under the schemes in a number of ways. As noted above, ACP and ACP HoldCo have executed deeds poll by which they agree to be bound by the schemes. Additionally, ACP has in place (or is putting in place) financing arrangements by which it is expected to be able to pay the scheme consideration. Further, the terms of the schemes provide that the transfer of HMA Shares is conditional on the scheme consideration being provided by ACP.

14. [44]

    Finally, I accept that the plaintiff has established the following matters (see Re Orion Telecommunications Ltd [2007] FCA 1389 at [5] (Gyles J); Re Staging Connections Group Ltd [2015] FCA 1012 at [19] (Gleeson J); Re Wridgways Australia Ltd [2010] FCA 1187 at [30] (Jacobson J):

CONCLUSION

1. [45]

   It was for those reasons I made the following orders:

   1. (1)

      Pursuant to s 411(1) and s 1319 of the Corporations Act 2001 (Cth) (the Act), the Plaintiff is to convene and hold a meeting a meeting of those of its shareholders identified as being management shareholders (Management Shareholders), (Management Scheme Meeting), for the purpose of considering, and, if thought fit, agreeing to (with or without any modification, alterations or conditions) the Management Scheme proposed to be made between the Plaintiff and the Management Shareholders, the terms of which are set out in Annexure B of the document which appears at pages 1 to 760 of Exhibit BG-1 to the Affidavit of Bernard Golja affirmed on 16 April 2026 (Golja Affidavit), (Scheme Booklet).

   2. (2)

      Pursuant to s 411(1) and s 1319 of the Corporations Act 2001 (Cth) (the Act), the Plaintiff is to convene and hold a meeting a meeting of those of its shareholders other than the Management Shareholders (Ordinary Shareholders), (Ordinary Scheme Meeting), for the purpose of considering, and, if thought fit, agreeing to (with or without any modification, alterations or conditions) the Ordinary Scheme proposed to be made between the Plaintiff and the Ordinary Shareholders, the terms of which are set out in Annexure A of the Scheme Booklet.

   3. (3)

      The Scheme Booklet, substantially in the form of the Scheme Booklet at pages 1 to 760 of Exhibit BG-1 to the Golja Affidavit is approved for distribution to the persons who are registered in the Plaintiff’s register of members as the holders of one or more issued fully paid ordinary share(s) in the capital of the Plaintiff (HMA Shareholders and each of them being an HMA Shareholder).

   4. (4)

      The Ordinary Scheme Meeting is to be held in person at 10 Hereford Street, Berkeley Vale NSW 2261 at 10:00am (Sydney time) on 13 May 2026.

   5. (5)

      The Management Scheme Meeting is to be held in person at 10 Hereford Street, Berkeley Vale NSW 2261 at 10:30am (Sydney time) on 13 May 2026.

   6. (6)

      Pursuant to s 411(1) and s 1319 of the Act, the Ordinary Scheme Meeting and Management Scheme Meetings (together the Scheme Meetings) are to be convened by Plaintiff sending, on or before 20 April 2026, an email to each HMA Shareholder who has elected to receive electronic communications, substantially in the form of the document which appears at pages 1138 to 1141 of Exhibit BG-1 to the Golja Affidavit (Emails to Shareholders), which:

   7. (7)

      In the case of HMA Shareholders for whom the Plaintiff (through its share registry, Automic Pty Ltd) receives an electronic notification that the Email to Shareholders cannot be delivered, the Plaintiff is by 21 April 2026 to send the following documents by express pre-paid post (in the case of HMA Shareholders with an address within Australia) or express pre-paid airmail (in the case of HMA Shareholders with an address outside Australia):

   8. (8)

      Subject to these orders, the Ordinary Scheme Meeting and the Management Scheme Meeting be convened, held and conducted in accordance with the provisions of:

   9. (9)

      The HMA Shareholders who are eligible to vote at the Ordinary Scheme Meeting and Management Scheme Meeting will be those whose names are recorded in the Plaintiff’s register of members at 7:00pm (Sydney Time) on 11 May 2026.

   10. (10)

       HMA Shareholders may vote at the Scheme Meeting relevant to them by attending in person or by proxy, attorney or corporate representative (if applicable).

   11. (11)

       Pursuant to s 1319 of the Act:

   12. (12)

       A proxy form in respect of the Ordinary Scheme Meeting will be valid and effective if, and only if, it is completed and delivered in accordance with its terms by 10:00am (Sydney time) on 11 May 2026.

   13. (13)

       A proxy form in respect of the Management Scheme Meeting will be valid and effective if, and only if, it is completed and delivered in accordance with its terms by 10:30am (Sydney time) on 11 May 2026.

   14. (14)

       Pursuant to r 1.3 of the Supreme Court (Corporations) Rules 1999 (NSW) (Rules), compliance with the following requirements of the Rules is dispensed with:

   15. (15)

       The further hearing of the Originating Process in respect of the Plaintiff's application pursuant to s 411(4), and if necessary, s 411(6), of the Act for approval of the Schemes, is adjourned to 9.15am (Sydney time) on 15 May 2026.

   16. (16)

       Liberty to apply.

   17. (17)

       These orders are to be entered forthwith.