In the matter of Blue Ocean Monitoring Limited

1. [1]

   By Originating Process filed on 29 January 2026, the Plaintiff, Blue Ocean Monitoring Limited (“BLM”) applies for orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) relating to a proposed scheme of arrangement and associated orders.

2. [2]

   By way of background, BLM is an unlisted Australian public company limited by shares. BLM designs, develops, and operates autonomous underwater vehicles and software solutions to enhance defence maritime surveillance, environmental monitoring, and subsea operations. The proposed scheme involves the acquisition of all the issued ordinary shares in BLM by Helsing Australia Pty Ltd (“Helsing”), a subsidiary of Helsing GmbH which is in turn wholly owned by Helsing SE, a German registered company. If the proposed scheme is implemented, BLM shareholders will receive $3.00 for each ordinary share in BLM they hold on the scheme record date (“Initial Cash Scheme Consideration”). If certain contracts are entered into, BLM shareholders may be entitled to receive “Earn-Out Consideration”, namely Earn-Out 1 Consideration of up to $0.80 per BLM share if, before 30 June 2027, any member of the Helsing Group received formal notification of the award of and enters into a specified Scoping Contract; and Earn-Out 2 Consideration of up to $3.20 per BLM share if, before 30 September 2028, any member of the Helsing Group received formal notification of the award of and enters into a specified Delivery Contract. The Scoping Contract and Delivery Contract are government led defence contracts that are being pursued by both BLM and the Helsing Group. If a member of the Helsing Group is not awarded the Scoping Contract or the Delivery Contract, then no Earn-Out 1 or Earn-Out 2 Consideration (as applicable) will be paid to BLM shareholders.

3. [3]

   I made the orders sought by BLM at the conclusion of the hearing on 3 March 2026. These are my reasons for doing so. I have drawn on the helpful submissions of Ms Scott who appeared for BLM in this judgment.

Affidavit evidence

1. [4]

   BLM reads the affidavit dated 29 January 2026 of its solicitor, Mr Kardos, which addressed formal matters in respect of the scheme. By his affidavit dated 28 February 2026, Mr Deeks, the Group Managing Director of BLM, provided an overview of the proposed scheme and the scheme consideration, addressed the position in respect of BLM’s employee share scheme (which I note below) and referred to the conditions precedent to the scheme, exclusivity provisions and a break fee and reverse break fee. He also outlined the consideration of the scheme by BLM’s board, addressed the consent of the proposed chair and alternate chair of the scheme meeting and set out the verification process for the scheme booklet which was in common form. He also outlined proposed shareholder communications in relation to the scheme.

2. [5]

   By her affidavit dated 27 February 2026, Ms Vogel, who is a director of Helsing and lead UK and international counsel to the Hesling group of companies addressed the corporate structure of the group, the entry into the Scheme Implementation Agreement (“SIA”) and deed poll, Helsing’s funding for the scheme consideration, the negotiation of the break fee and reverse break fee and the verification process adopted in respect of information concerning Helsing in the scheme booklet, which was also in common form.

3. [6]

   BLM also tendered two letters dated 3 March 2026 from the Australian Securities & Investments Commission (“ASIC”). The first, in common form, reserved ASIC’s position as to s 411(17)(b) of the Act to the second Court hearing and indicated that it did not currently propose to appear to make submissions or intervene to oppose the scheme at the second Court hearing. The second provided relief in respect of the timing of financial reports included in the explanatory statement for the proposed scheme.

Applicable principles

1. [7]

   The Court’s role at the first Court hearing in respect of a scheme is to determine, in the exercise of its discretion, whether to approve the convening of a scheme meeting and the explanatory statement if it is satisfied of several matters, namely that the plaintiff is a Pt 5.1 body; the proposed scheme is an “arrangement” within the meaning of s 411 of the Act; the scheme is bona fide and properly proposed; ASIC has had a reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days’ notice of the proposed hearing date of the first Court hearing; the procedural requirements under the Supreme Court (Corporations) Rules 1999 (NSW) (“Rules”) have been met; and there is no apparent reason why the scheme should not, in due course, receive the Court’s approval if the necessary majority of votes is achieved: Re Orion Telecommunications Limited [2007] FCA 1389 at [5]; Re Staging Connections Group Ltd [2015] FCA 1012 at [19]; Re Wridgways Australia Ltd [2010] FCA 1187 at [30]; Re Ellerston Global Investments Ltd [2020] NSWSC 879 (“Ellerston”) at [25]; Re Vocus Group Ltd [2021] NSWSC 630 at [12].

2. [8]

   The Court will not ordinarily summon a scheme 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. The Court will consider whether the proposed scheme is fit for consideration at the proposed scheme meeting, in the sense that it 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 on the hearing of a petition which is unopposed; and members are to be properly informed as to the nature of the scheme before the scheme meeting: F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72, approved in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 504; [1993] HCA 15; Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742 at [36] and [44], cited with apparent approval in Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34 at [58]; Re InvoCare Ltd [2023] NSWSC 1180 (“InvoCare”) at [16]–[17].

3. [9]

   These principles were summarised by Halley J in Re Absolute Equity Performance Fund Ltd [2022] FCA 933 at [18]–[22] as follows:

Matters relevant to whether to convene the scheme meeting

1. [10]

   I am satisfied that each of the preconditions to the exercise of the Court’s discretion in s 411 of the Act is satisfied in this case. BLM is a company registered under the Act and a Pt 5.1 body. The proposed scheme is an “arrangement” within the scope of s 411 of the Act where it involves the acquisition of the shares in BLM in return for consideration being paid to its shareholders. There is no reason to suggest that scheme is not bona fide or properly proposed. ASIC has here had a reasonable opportunity to examine the proposed scheme and scheme booklet, to make submissions and has had the necessary notice of this hearing and, as I noted above, has indicated that it does not currently propose to appear to make submissions or intervene to oppose the scheme at this hearing. The procedural requirements under the Rules have been met, where I will dispense with the requirement for compliance with r 3.4 of the Rules to publish a notice of the second Court hearing in a national newspaper, where BLM will publish that notice on ASX in accordance with current scheme practice.

2. [11]

   Ms Scott also addresses several further matters. First, Ms Scott addresses the funding of the scheme consideration, the entry into a Deed Poll and the question of performance risk. She points out that the expected scheme consideration would be approximately $24.5 million based on a cash payment of $3.00 for each scheme share held by a BLM shareholder (scheme booklet, section 6.2(a)). Ms Scott rightly recognises that the Court will give particular attention to the availability of funding where, as here, the bidder in a scheme is a special purpose vehicle which does not have capacity to perform its obligations under that Deed Poll without financial support from a holding company, and where funding from a third party is presently conditional: Re Spark Infrastructure RE Ltd [2021] NSWSC 1385 at [31]–[32]. Helsing is a special purpose vehicle which, without financial support from Helsing SE, would not have the capacity to perform its obligations under the scheme. There is evidence that Helsing SE has sufficient cash reserves to fund the scheme, and it has assumed the obligation to do so.

3. [12]

   Clause 5.2 of the scheme provides that the transfer of BLM shares to Helsing is subject to the provision of the Initial Cash Scheme Consideration so that no transfer of BLM shares occurs unless and until the Initial Cash Scheme Consideration to which BLM shareholders are entitled has been paid into a trust account for the benefit of those shareholders. Clause 15.1 of the SIA in turn provides that Helsing SE irrevocably and unconditionally guarantees the payment to BLM of the money that Helsing is required to pay under the SIA and the scheme, being the Initial Scheme Cash Consideration and the Earn-Out Consideration. By a Deed Poll dated 26 September 2025, Helsing and Helsing SE undertook in favour of the scheme shareholders that, subject to the scheme becoming effective, they will perform their respective obligations under the scheme. By an Amended and Restated Deed Poll also dated 26 February 2026, Helsing SE also undertook in favour of each scheme participant to guarantee the performance by Helsing of all its obligations under the scheme and Deed Poll to pay or procure the payment of the scheme consideration, in accordance with the scheme and SIA. Ms Scott submits and I accept, that the Deed Poll, together with the payment of the Initial Cash Scheme Consideration to a trust account maintained by BLM, are well-established means of managing performance risk: Ellerston at [29]; Re ELMO Software Pty Ltd [2023] NSWSC 12 at [27]–[28]. These matters do not provide reason not to convene the scheme meeting.

4. [13]

   Second, Ms Scott also addresses the position as to future scheme consideration which, as I noted above, would be payable if a member of the Helsing Group enters into the relevant Scoping Contract or Delivery Contract within the specified time frames. Clause 4.4(c) of the SIA provides that, within 30 days of a member of the Helsing Group receiving formal notification of the award and entering into the Scoping Contract, Helsing must pay an amount equal to the aggregate amount of the Earn-Out 1 Consideration payable to each scheme participant in respect of the scheme shares that were held by that participant into an $AUD trust account with an authorised deposit-taking institution operated by BLM as trustee for scheme participants, and BLM must then pay that consideration to scheme participants. Clause 4.4(g) of the SIA similarly provides that, within 30 days of a member of the Helsing Group receiving formal notification of the award and entering into the Delivery Contract, Helsing must pay an amount equal to the aggregate amount of the Earn-Out 2 Consideration payable to each scheme participant in respect of the scheme shares that were held by that participant into an $AUD trust account with an authorised deposit-taking institution operated by BLM as trustee for scheme participants, and BLM must then pay that consideration to scheme participants. Clause 6.4 of the scheme is to similar effect. Ms Scott also points out that the obligations of Helsing and Helsing SE in relation to the payment of the scheme consideration (including the Earn-Out Consideration) are underpinned by the Deed Poll.

5. [14]

   Ms Scott rightly notes that the Earn-Out Consideration is in the nature of deferred consideration contingent on the outcome of future events. There is plainly a risk that the events giving rise to the Earn-Out Consideration will not occur. As Ms Scott points out, BLM has also disclosed in the letter from the chairman of BLM and in section 7.5(c) of the scheme booklet that there is a further risk that the Earn-Out Consideration will not be paid to scheme participants, who would have an unsecured claim under the scheme or the Deed Poll. I accept that this disclosure is sufficient to warn BLM shareholders of the risk of non-performance. Ms Scott also submits and I accept that, where the nature of that consideration is sufficiently disclosed, the fact that some of the consideration is deferred or uncertain is not a reason to decline approval of the scheme: Re Signature Gold Ltd [2017] FCA 766 at [14], [47]–[53]; Re Spicers Ltd [2019] FCA 731 at [26]; Re Patersons Securities Ltd [2019] FCA 1438 at [8]; Re BINGO Industries Ltd [2021] NSWSC 798; Re Crestone Holdings Ltd [2022] NSWSC 433 at [19]–[32]. I also addressed issues of this kind in Re Link Administration Holdings Ltd [2022] NSWSC 650 at [24]ff, where I noted that the case for approval of a scheme involving an element of contingent consideration is stronger where, as here, the independent expert has expressed the view that the scheme consideration (disregarding the contingent consideration) is fair and reasonable and therefore in the best interests of shareholders.

6. [15]

   For completeness, I note that Ms Scott addresses the question whether the Earn-Out Consideration is a debenture within the meaning of s 9 of the Act, as it is an undertaking by Helsing to pay money as a debt as consideration for the acquisition of BLM shares under the scheme. She recognises that, if that were case, the requirements in Chapter 2L of the Act would apply to the Earn-Out Consideration. Ms Scott submits, with considerable force, that a debt that does not presently exist (but which may exist in the future) does not give rise to a debenture: Handevel Proprietary Limited v Comptroller of Stamps (Victoria) (1985) 157 CLR 177 at 196; [1985] HCA 73. She points out that no member of the Helsing Group has presently entered into the Scoping Contract or the Delivery Contract and that there is no presently existing debt owing to BLM shareholders. I do not consider it necessary or appropriate to express a concluded view as to that matter in the absence of a contradictor. It is sufficient that I note that this and the other matters noted above also do not give rise to reason not to convene the scheme meeting.

7. [16]

   Third, Ms Scott notes that several BLM shareholders have provided signed statements to BLM which confirm that, subject to no Superior Proposal (as defined) emerging and the independent expert continuing to conclude that the scheme is in the best interests of BLM shareholders, they intend to vote shares held or controlled by them in favour of the scheme. This matter also provides no reason not to convene the scheme meeting.

8. [17]

   Fourth, Ms Scott notes that cl 9 of the SIA is an exclusivity provision which includes “no shop”, “no talk” and “no due diligence” restrictions, and a “notification” and “matching right” obligation. I accept that exclusivity provisions in this form are now commonplace in schemes of arrangement and are not inconsistent with the Takeovers Panel’s guidance as to “deal protection”: Re Villa World Ltd (2019) 139 ACSR 550; [2019] NSWSC 1207 at [23]. Ms Scott points out that the “no talk” and “no due diligence” restrictions in cll 9.3 and 9.4 are subject to an overriding obligation recognising the directors’ fiduciary or statutory duties, under cl 9.5 of the SIA. She also submits and I accept that, although the “no shop” restriction is not subject to a fiduciary carve-out, that has been accepted in the case law: Re DUET Management Company 1 Ltd (2013) 95 ACSR 34; [2013] NSWSC 817 at [24]; Re Bigair Group Ltd [2016] FCA 1296 at [21]; Re Aveo Group Limited and Aveo Funds Management Limited [2019] NSWSC 1348 at [44]. The exclusivity provisions are clearly disclosed in section 4.2(g) of the proposed scheme booklet.

9. [18]

   The Court is concerned to ensure that any exclusivity period should be for no more than a reasonable period, capable of precise ascertainment; an exclusivity clause directed at dealing with an unsolicited alternative proposal should be subject to a fiduciary carve-out; and the provisions should be clearly disclosed in the explanatory statement sent to shareholders: Re Arthur Yates & Co Ltd (2001) 36 ACSR 758; [2001] NSWSC 40 at [9]; Re TPG Telecom Ltd [2020] NSWSC 772 at [22]; Re Isentia Group Ltd [2021] NSWSC 910 at [23] (“Isentia”); Re Asaleo Care Ltd [2021] FCA 406 at [55]. The exclusivity clause here lasts from the date of the SIA (26 September 2025) until the earlier of its termination and the “End Date”, which is 25 June 2026 or such other date and time agreed between Helsing and BLM. I accept that this is a reasonable period, particularly where that period now only has a relatively short period remaining. This matter also gives rise to no reason not to convene the scheme meeting.

10. [19]

    Fifth, Ms Scott notes that cll 10.2 and 10.3 of the SIA provide for the payment of a break fee and reverse break fee of $620,000 in specified circumstances. The break fee and reverse break fee are disclosed in the frequently asked questions in section 2 and in sections 1.5(f) and 9.12(b) of the proposed scheme booklet. The break fee is not triggered solely by BLM shareholders failing to approve the scheme booklet and is not a disincentive to shareholders declining to approve the scheme: Re Adelaide Bank Ltd [2007] FCA 1582 at [31]; Re Bolnisi Gold NL (No 2) (2007) 65 ACSR 510 at 513; [2007] FCA 2078. Ms Scott rightly points out that the break fee and reverse break fee each represent approximately 2.5% of the equity value of BLM as implied by the Initial Cash Scheme Consideration and are more than the 1% figure which the Takeovers Panel's guidance suggests is reasonable. However, that guidance is not determinative; and I accept that the Court may order a meeting to consider a scheme although the break fee exceeds 1%, and that the likelihood of break fee exceeding 1% increases where a scheme company has a lower equity value: Re Cytopia Ltd [2009] VSC 560 at [12]–[18]; Re Dulux Group Ltd (2019) 136 ACSR 546; [2019] FCA 961 at [31]; Isentia at [20]–[22]. There is evidence as to the negotiation of the break fee and reverse break fee and that costs incurred by both parties will likely exceed the break fee and the reverse break fee. Ms Scott submits and I accept that, although the break fee and reverse break fee exceed 1% of the equity value of BLM, that does not warrant the Court refraining from making an order to convene the scheme meeting where they reflect actual costs likely to be incurred and are unlikely to deter a potential bidder from making a competing offer.

11. [20]

    Sixth, the scheme contains deemed warranties by which shareholders are taken to have warranted that their fully paid shares are free from any encumbrances or security interests, and these warranties are disclosed in the scheme booklet. The case law has accepted that approach: Re APN News and Media Ltd (2007) 62 ACSR 400 at [57]–[63]; [2007] FCA 770; Re Ardent Leisure Ltd [2018] NSWSC 1665 at [26]. This matter also gives rise to no reason not to convene the scheme meeting.

12. [21]

    Seventh, Ms Scott addresses the treatment of BLM’s employee share arrangements. Ms Scott notes that, under BLM’s employee share scheme, current and former employees of BLM purchased BLM shares at $1.10, $3.60, $5.40, $6.50 and $7.00 using a loan advanced by BLM (“ESS Loan”). Under the scheme, the scheme consideration must be applied to repay these loans where applicable, such that the ESS Loan will be deducted from the amounts received in respect of ESS Loan shares. Some employee shareholders will not receive any consideration, beyond the amount applied to pay out their loans, but none will incur any personal liability arising from the scheme.

13. [22]

    Eighth, BLM proposes to establish an inbound shareholder information line. The scripts for the former were in evidence and no difficulty arises from them, although there is greater risk attached to BLM itself rather than an experienced third-party provider dealing with those calls; and it will likely need to keep a log of those calls which will need to be tendered at the second Court hearing. BLM has also engaged a third party to send emails or letters reminding BLM shareholders of the date and time of the scheme meeting and encouraging them to ensure their bank details are up to date and to consider lodging a proxy if they are not able to participate in the scheme meeting. BLM draws these proposed communications to the Court’s attention in accordance with the usual practice but no orders are sought approving them: Practice Note SC Eq 4 at [26(k)] and InvoCare at [26].

14. [23]

    These matters, separately and together, give rise to no reason not to convene the scheme meeting.

Exercise of the Court’s discretion whether to convene the scheme meeting

1. [24]

   Turning to the wider issues relevant to the exercise of the Court’s discretion whether to convene the scheme meeting, BLM’s board of directors has unanimously recommended that BLM shareholders vote in favour of the scheme at the scheme meeting in the absence of a Superior Proposal and each BLM director intends to vote for the scheme in respect of the BLM shares which they hold or control and any proxies placed at their discretion, in the absence of a Superior Proposal.

2. [25]

   BLM engaged Grant Thornton Corporate Finance Pty Limited (“Grant Thornton”) to prepare an Independent Expert’s Report in relation to whether the scheme is in the best interests of BLM shareholders. Grant Thornton first compared the fair market value per ordinary share of BLM (excluding any entitlements and expectations related to the Scoping Contract and the Delivery Contract) before the scheme on a control basis with the Initial Cash Scheme Consideration. Grant Thornton assessed the value of BLM shares on a control basis at between $3.00 and $3.32 per BLM share, being equal to or higher than the Initial Cash Scheme Consideration of $3.00 per BLM share, and assessed the Initial Cash Scheme Consideration to be fair to BLM shareholders on that basis. Grant Thornton also expressed the view that the scheme is in the best interests of BLM shareholders, in the absence of a Superior Proposal. Grant Thornton then assessed the value of the Earn-Out 1 Consideration and Earn-Out 2 Consideration at A$0.162 to A$0.324 and A$0.182 to A$0.363, respectively; however, given the uncertainty associated with whether any potential proceeds from Earn-Out 1 Consideration and Earn-Out 2 Consideration would be received and their estimated quantum, Grant Thornton concluded that they do not materially impact the overall assessment of the scheme.

3. [26]

   No apparent difficulty arises with the disclosure in the scheme booklet and the verification process adopted in respect of the scheme booklet. I am satisfied that there is nothing in the terms of the scheme, or in its effect on BLM’s shareholders, that would otherwise warrant the Court declining to approve the scheme at the second Court hearing, if it receives the statutory majorities required by s 411(4)(a)(ii) of the Act at the scheme meeting.

Orders

1. [27]

   For these reasons, I made the orders sought by BLM at the conclusion of the first Court hearing on 3 March 2026.