NEXUS ENERGY LIMITED
3 November 2014
Nexus Energy Limited (Subject to Deed of Company Arrangement) ASX:NXS
Dear Shareholder
We, Matthew Caddy, Jason Preston and Anthony McGrath, the Deed Administrators of Nexus Energy Limited
(Subject to Deed of Company Arrangement) (Nexus), write to you as a shareholder of Nexus. The purpose of this letter is to provide you with information about:
an application which was filed on 17 October 2014 with the Supreme Court of New South Wales for approval to transfer all shares in Nexus to SGH Energy No 2 Pty Limited (SGH No 2), pursuant to the terms of the Nexus deed of company arrangement; and
how that application affects you, how you may participate in the Court hearing listed on 27 and 28 November 2014, and the information available to you.
On 12 June 2014, we were appointed as joint and several voluntary administrators of Nexus.
On 11 August 2014, the creditors of Nexus voted in favour of Nexus entering into a deed of company arrangement (DOCA) and that we be appointed as the Deed Administrators. On 22 August 2014 the DOCA was executed and we were appointed as the Deed Administrators.
A term of the DOCA is that all of the issued shares in Nexus be transferred to SGH No 2. A condition precedent to that transfer of shares is obtaining the Court's approval to do so.
Under the DOCA, by a series of steps and subject to certain conditions precedent, SGH No 2 will provide monies which will be paid to Nexus' secured creditor, Network Investment Holdings Pty Ltd (NIH), and other unsecured creditors of Nexus. NIH will be paid in full for the amounts owed to it. The unsecured creditors are expected to be paid in full with two exceptions. The exceptions are persons who are holders
of certain Notes issued by Nexus (Noteholders), who will be paid 74.5c in the dollar for the amounts owing to them, and Sedco Forex International Inc, who will be paid an agreed amount. In return for SGH No 2 providing those monies, all of the issued shares in Nexus will be transferred to SGH No 2. Once the steps under the DOCA are completed, the claims of creditors of Nexus will be extinguished and Nexus will return to operating as a going concern.
As noted above, in order for us to transfer all of the Nexus shares to SGH No 2, we need the Court to permit us to do so under section 444GA of the Corporations Act 2001 (Cth) (Act).
In order to obtain the Court's permission to transfer the shares, an application to do so was filed with the Supreme Court of New South Wales on 17 October 2014. A copy of the application can be found on our website in the Shareholder information folder at http://www.mcgrathnicol.com/assignments/nexus-energy-limited/www.mcgrathnicol.com/assignments/nexus-energy-limited/.
On 31 October 2014, the Court set down the dates of 27 and 28 November 2014 to hear that application, and otherwise made the orders set out below:
1. Orders the application for relief pursuant to s 444GA of the Corporations Act 2001 ("the Act") be
listed for hearing commencing at 9.30am on each of 27 and 28 November 2014.
2. Notes that the Australian Securities and Investments Commission ("ASIC") anticipates that it will
advise the Plaintiffs by 10 November 2014 on whether:
(a) it is prepared to grant, in principle, the relief sought in the application pursuant to s 606
of the Act ("ASIC Application") submitted to it on 15 August 2014; or
(b) if ASIC has not yet determined whether it is prepared to grant, in principle, the relief sought in the ASIC Application, the date on which it expects such a determination will be made.
3. Any interested person wishing to appear at the hearing of the section 444GA application is to file and serve on the parties and ASIC a Notice of Appearance in the prescribed form and indicating the grounds of any opposition by 4pm on 12 November 2014.
4. Any interested person wishing to appear at the hearing of the section 444GA application is to file and serve on the parties, including any other party that has filed a Notice of Appearance in the proceedings, and ASIC its evidence by 4pm on 19 November 2014.
5. The proceedings be listed for directions at 2pm on 20 November 2014.
6. Liberty to apply on 48 hours' notice specifying the relief sought.
7. The Court notes that the Plaintiffs intend to make available the independent expert report ("Report") to the market today, and to notify the registered shareholders in Nexus Energy Ltd of the hearing date for the s444GA application and the availability of the report and the Explanatory Statement.
8. Any application by any party for leave to issue subpoenas and any evidence in support, whether by reference to Supreme Court Equity Practice Note 11 or otherwise, be made returnable in the Corporations Motions List at 9.45am on 10 November 2014, any such draft subpoenas and affidavit in support to be served on the parties and ASIC and sent to the Associate to Black J by noon on 6
November 2014.
If the Court gives us permission to transfer all of the shares in Nexus to SGH No 2, and all other conditions precedent under the DOCA are satisfied, it will mean that all of the shares you currently hold in Nexus will be transferred from you to SGH No 2 for nil consideration, and any claim you have against Nexus in your capacity as a shareholder will be extinguished. It will not affect any claims you may have against third parties.
How you can participate in the Court hearing
You should seek independent legal advice before making a decision on whether to take any action in relation to the Court application.
If you wish to appear in court on 27 and 28 November 2014 to oppose our application, you will need to:
file and serve on the parties and ASIC a notice of appearance in the prescribed Court form and indicate the grounds of any opposition to our application by 4 pm on 12 November 2014; and
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file and serve on the parties, including any other party that has filed a Notice of Appearance in the proceedings, and ASIC the evidence on which you intend to rely at the hearing by 4 pm on 19
November 2014.
We will accept service of any appearance and affidavit at Clayton Utz, Level 18, 333 Collins Street, Melbourne, Victoria 3000 (Attention: Paul James or Alissa Crittenden) or mailto:pjames@claytonutz.compjames@claytonutz.comor acrittenden@claytonutz.com, or at the Clayton Utz Sydney office at Level 15, 1 Bligh Street, Sydney 2000.
The application is also listed for a directions hearing at 2 pm on 20 November 2014.
To assist you in deciding whether or not to appear at the Court hearing:
the Court application is available on our website in the Shareholder information folder at www.mcgrathnicol.com/assignments/nexus-energy-limited/;
our report to creditors under section 439A of the Act is available on our website at www.mcgrathnicol.com/app/uploads/D14-140804-NEXUENE01-s439A-Report-final.pdf, and was also attached to an ASX announcement made on 6 August 2014 available at
http://www.nexusenergy.com.au/assets/97/Files/1351248.pdf; and
an explanatory statement attaching an independent expert's report is available at http://www.asx.com.au/asxpdf/20141031/pdf/42tcz2y92c0k02.pdf. The Deed Administrators will rely on the independent expert's report in support of our application.
Alternatively, you may request copies of these documents from McGrathNicol and they can be emailed or posted to you. Please contact Penny Bundell on (03) 9278 1056 if you would like copies of these documents.
Further, the documents on which the Deed Administrators will rely in support of the Court application are available in a secured online data room for shareholders to access. If you wish to have access to those documents, please contact Ms Bundell on (03) 9278 1056.
Lastly, we will continue to update shareholders in relation to the Court application, as updates are available, by way of ASX announcements which will also be published on our website. We suggest that you monitor our website regularly in order to be kept informed of matters concerning the Court application which may affect you.
Yours faithfully
Nexus Energy Limited (Subject to Deed of Company Arrangement
Jason Preston
Deed Administrator
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