metlifecare takes court action to enforce sia · 2020-05-17 · media release 18 may 2020...
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MEDIA RELEASE 18 MAY 2020
METLIFECARE TAKES COURT ACTION TO ENFORCE SIA
Metlifecare Limited (NZX: MET, ASX: MEQ) confirms it has filed a Statement of Claim in the High Court
of New Zealand seeking orders that Asia Pacific Village Group Limited (APVG) fulfil its contractual
obligations under the Scheme Implementation Agreement (SIA) entered on 29 December 2019.
APVG is an entity owned by EQT Infrastructure IV fund and managed by EQT Fund Management
S.à.r.l..
As signalled in its market update on 7 May 2020, Metlifecare filed the Statement of Claim on Friday
15 May 2020, challenging the validity of APVG’s notice to terminate the SIA, received on 28 April 2020.
Metlifecare has also sought orders against the EQT Infrastructure Fund IV investors who have agreed
to fund the transaction under an Equity Commitment Letter. A copy of the Statement of Claim is
attached to this release.
The proceeding reiterates the reasons why Metlifecare considers there is no lawful basis to terminate
the SIA, namely that no Material Adverse Change (MAC) has occurred and that there have been no
prescribed occurrences that would permit APVG to terminate the SIA.
Metlifecare Chairman Kim Ellis said: “In refusing to fulfil their contractual obligations under the Scheme
Implementation Agreement, APVG has left us with no choice but to take this legal action to protect
the rights of Metlifecare and its shareholders. The Board of Metlifecare remains strongly committed
to the successful completion of the Scheme.”
The Statement of Claim reiterates that regardless of whether the MAC metrics are triggered, the MAC
clause does not apply because this would have been the result of changes in general economic
conditions and/or changes in law, which are exclusions under the MAC clause.
Further, the Statement of Claim says APVG has no reasonable basis to conclude that a prescribed
occurrence has occurred that would represent a breach of the SIA. Specially, Metlifecare gave APVG
reasonable access to information about, kept APVG reasonably informed of, and consulted with APVG
in relation to the steps Metlifecare took in response to the Level 4 lockdown restrictions in New
Zealand. This extensive communication is detailed in the Statement of Claim.
The matter is expected to initially be heard in the High Court on 28 May 2020, at which time
Metlifecare will make a request for an expedited court timetable. The 28 May hearing will also consider
Metlifecare’s separate proceeding applying for initial orders to call a meeting of its shareholders to
vote on the scheme plan contemplated by the SIA. Subject to the approval of the court, Metlifecare
anticipates holding the shareholder meeting to consider the scheme plan in late June or early July.
Metlifecare has retained the services of Stephen Hunter QC to assist it, alongside top tier New Zealand
law firm Chapman Tripp.
Metlifecare shareholders do not need to take any action at this time.
This announcement is authorised for release to the market by the Board of Metlifecare Limited.
Ends
For more information please contact:
Clive Mathieson
clive@catoandclive.com
Mobile: +61 411 888 425
About Metlifecare
Metlifecare is a leading New Zealand owner and operator of retirement villages, providing rewarding lifestyles
and outstanding care to more than 5,600 New Zealanders. Established in 1984, it currently owns and operates
a portfolio of 25 villages in areas with strong local economies, supportive demographics and high median house
prices, located predominantly in New Zealand’s upper North Island.
Statement of claim
Dated: 15 May 2020
REFERENCE: M D Arthur (michael.arthur@chapmantripp.com)
L C Bercovitch (liora.bercovitch@chapmantripp.com)
COUNSEL: S M Hunter QC (smhunter@shortlandchambers.co.nz)
In the High Court of New Zealand
Auckland Registry
I Te Kōti Matua O Aotearoa
Tāmaki Makaurau Rohe
CIV-2020-404-
between: Metlifecare Limited, a company incorporated in
New Zealand whose registered office is Level 4, 20
Kent Street, Newmarket, New Zealand
Plaintiff
And: Asia Pacific Village Group Limited, a company
incorporated in New Zealand whose registered office is
Bell Gully, Level 22, Vero Centre, 48 Shortland Street,
Auckland 1010, New Zealand
First Defendant
and: EQT Infrastructure IV EUR SCSp, a Luxembourg
special limited partnership (société en commandite
spéciale) with its registered office at 26A, Boulevard
Royal, L-2449 Luxembourg, registered with the
Luxembourg Trade and Companies Register (Registre
de Commerce et des Sociétés, Luxembourg) under
number B 225967
Second Defendant
and: EQT Infrastructure IV USD SCSp, a Luxembourg
special limited partnership (société en commandite
spéciale) with its registered office at 26A, Boulevard
Royal, L-2449 Luxembourg, registered with the
Luxembourg Trade and Companies Register (Registre
de Commerce et des Sociétés, Luxembourg) under
number B 225964.
Third Defendant
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STATEMENT OF CLAIM
The plaintiff by its solicitor says:
Parties
1 The plaintiff, Metlifecare Limited (Metlifecare) is a company
incorporated in New Zealand whose registered office is Level 4,
20 Kent Street, Newmarket, New Zealand. Metlifecare is listed on
the NZX Main Board and ASX official list and carries on business as
an owner and operator of retirement villages and aged care homes.
2 The first defendant, Asia Pacific Village Group Limited (APVG) is a
company incorporated in New Zealand whose registered office is
c/- Bell Gully, Level 22, Vero Centre, 48 Shortland Street, Auckland
1010, New Zealand. APVG is directly owned by Asia Pacific Village
Holdings Limited (APVH), another New Zealand limited liability
company with the same registered office as APVG. APVH is
currently owned by EQT Infrastructure IV Investments S.à r.l., a
Luxembourg limited liability company.
3 The second defendant is EQT Infrastructure IV EUR SCSp, a
Luxembourg special limited partnership (société en commandite
spéciale) with its registered office at 26A, Boulevard Royal, L-2449
Luxembourg, registered with the Luxembourg Trade and Companies
Register (Registre de Commerce et des Sociétés, Luxembourg)
under number B 225967.
4 The third defendent is EQT Infrastructure IV USD SCSp, a
Luxembourg special limited partnership (société en commandite
spéciale) with its registered office at 26A, Boulevard Royal, L-2449
Luxembourg, registered with the Luxembourg Trade and Companies
Register (Registre de Commerce et des Sociétés, Luxembourg)
under number B 225964.
5 EQT Fund Management S.à r.l. is a Luxembourg limited liability
company whose registered office is at 26A, Boulevard Royal, L-2449
Luxembourg and acts as manager of the various investment vehicles
comprising the fund known as EQT Infrastructure IV Fund, which
includes the second and third defendants.
6 EQT Infrastructure IV Fund is managed as part of the EQT AB group,
which is based in Sweden and includes entities advising EQT funds,
as well as general partners and fund managers of EQT funds. EQT
Infrastructure IV Fund is the indirect owner of APVH.
7 A simplified overview of the EQT group structure for its investment
in Metlifecare as it relates to this proceeding is set out in
Appendix One.
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Proposed acquisition of Metlifecare’s shares by APVG
8 On 7 November 2019 the chair of Metlifecare was first confidentially
approached by representatives of, and late on 9 November 2019
Metlifecare received a draft non-binding preliminary expression of
interest from, EQT Fund Management S.à r.l. acting as manager of
EQT Infrastructure IV Fund in connection with a proposal to acquire
the company. The proposed offer price was $6.05 per share.
9 Metlifecare advised EQT Infrastructure IV Fund that it would not
provide access to due diligence unless EQT Infrastructure IV Fund
raised its offer price to $6.50, although even then indicated that the
price was below the Metlifecare Board’s expectations on value for
the company.
10 On 14 November 2019 Metlifecare received a revised non-binding
expression of interest from EQT Fund Management S.à r.l. acting as
manager of EQT Infrastructure IV Fund to acquire the company at a
price of $6.50.
11 On 24 November 2019 Metlifecare, EQT Partners Singapore Pte. Ltd.
and others entered into a confidentiality agreement. Subsequently,
Metlifecare and EQT Infrastructure IV Fund agreed to a period of
exclusivity to allow EQT Infrastructure IV Fund to conduct due
diligence in relation to Metlifecare.
12 On 3 and 4 December 2019 Metlifecare gave EQT Infrastructure IV
Fund representatives and advisers a detailed management
presentation and EQT Infrastructure IV Fund provided Metlifecare
with a presentation about its business.
13 From early December 2019 representatives and advisers of EQT
Infrastructure IV Fund conducted due diligence on the Metlifecare
group and the parties commenced negotiations on the terms of a
scheme implementation agreement.
14 During the due diligence process Metlifecare disclosed and
representatives and advisers of EQT Infrastructure IV Fund reviewed
Metlifecare’s capital expenditure budget for FY20.
15 On 17 December 2019 Metlifecare received from EQT Fund
Management S.à r.l. acting as manager of EQT Infrastructure IV
Fund a non-binding indicative offer of $6.50 per share.
16 On 18 December 2019 APVG was incorporated for the purpose of
acquiring the Metlifecare shares under the proposed purchase.
17 On 19 December 2019 Metlifecare announced to the NZX that its
Board would not be in a position to proceed with or recommend a
scheme of arrangement at an offer price of $6.50 per share.
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18 On 21 December 2019 EQT Fund Management S.à r.l. acting as
manager of EQT Infrastructure IV Fund submitted a revised price to
Metlifecare of $7.00 per share, being a price that:
18.1 represented a 67 per cent premium to Metlifecare’s 52-week
trading low, and a 46 per cent premium to Metlifecare’s 12-
month Volume Weighted Average Price, and a 38% premium
to the closing price prior to the announcement of EQT
Infrastructure IV Fund’s earlier offer; and
18.2 was within the company’s own valuation range.
19 The Metlifecare Board formed the view that a sale at $7.00 per
share would be advantageous to its shareholders.
Scheme Implementation Agreement
20 On 29 December 2019 Metlifecare (as Target) and APVG (as Bidder)
executed a Scheme Implementation Agreement (the SIA). The SIA
requires Metlifecare to put a scheme of arrangement to its
shareholders whereby, if approved, and all conditions satisfied, the
shareholders would agree to sell their shares to APVG for $7.00 per
share (the Scheme Consideration).
21 The SIA:
21.1 provides for Metlifecare to put the Scheme to its shareholders
(clause 2.1);
21.2 prescribes the terms of the proposed Scheme (Annexure A);
21.3 requires Metlifecare to announce the Scheme and, subject to
there being no superior proposal and the Independent
Adviser’s report concluding that the Scheme Consideration is
within or above the Independent Adviser’s valuation range for
the shares, ensure that each member of the Metlifecare Board
recommends it to the Shareholders (clause 8.1);
21.4 requires Metlifecare to seek approval of the Scheme through
Court approval of initial and final orders in accordance with
section 236 of the Companies Act 1993, the meeting of
shareholders and related steps (clauses 2.4, 4.1, 5.1 and 6);
21.5 requires APVG to assist Metlifecare to implement the Scheme,
and to take all steps to assist Metlifecare with the Scheme
(clauses 2.4, 4.2 and 5.2);
21.6 requires APVG to procure payment of the Scheme
Consideration for the shares, but that obligation is conditional
on the conditions set out in clause 3 of the SIA, including New
Zealand Overseas Investment Office and other regulatory
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approval, together with approval by the shareholders and by
the Court (clauses 2.3 and 3.1);
21.7 requires APVG to execute a Deed Poll, which, along with the
SIA binds APVG to the Scheme (clause 5.2(a));
21.8 prevents Metlifecare from soliciting or encouraging competing
offers to the Scheme, or prompting any enquiries which may
lead to a competing offer (clause 12). Regardless of the
exclusivity clauses, Metlifecare’s Board of directors is able to
receive and consider alternative offers;
21.9 provides that Metlifecare is required to pay a “break fee” of
$14.91 million in the circumstances described in the SIA
(clause 13), however the break fee is not payable merely if
the relevant shareholding voting thresholds are not achieved;
and
21.10 provides that APVG is required to pay a “reverse break fee” of
$14.91 million in the circumstances described in the SIA
(clause 13).
- Conditions precedent
22 Clause 3.1 of the SIA provides that the Scheme will not become
effective and the obligations of APVG under clause 2.3 do not
become binding unless and until each of the conditions set out in the
first column of the table in clause 3.1 has been satisfied or waived.
23 The conditions precedent as set out in clause 3.1 of the SIA are as
follows:
“OIO approval: before 5.00pm on the Business Day before the End
Date, Bidder has obtained all consents required under the Overseas
Investment Act 2005 to the implementation of the Scheme on terms
or conditions acceptable to Bidder acting reasonably, provided that
Bidder may not withhold its approval to terms or conditions of any
such consent if the terms or conditions imposed:
(a) are the standard terms or conditions set out in Schedule 6; or
(b) are consistent with the Bidder’s positive undertakings, plans
or intentions specified in its application”;
“Bank Facility Consent: before 5.00pm on the Business Day before
the First Court Date, the Agent and Lenders under the Facility
Agreement, have agreed to waive any Event of Review, Event of
Default or Potential Event of Default which may arise under the
Facility Agreement or any associated security in connection with the
entry into and/or completion of the Transaction, in a form and on
terms acceptable to Bidder”;
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“Statutory Supervisor Consent: before 5.00pm on the Business
Day before the First Court Date, each Statutory Supervisor provides
consent to the change in control of the Target Group under the
relevant Deed of Supervision, in a form and on terms acceptable to
the Bidder”;
“Regulatory clearances: before 8.00am on the End Date, Bidder
and Target have received all approvals or consents from the
Takeovers Panel and NZX as are required to implement the
Transaction, including in respect of the Target’s retail bonds
remaining on issue and quoted on NZX”;
“Independent Adviser: the Independent Adviser provides an
Independent Adviser’s Report to Target shareholders which
concludes that the Consideration is within or above the Independent
Adviser’s valuation range for the Shares”;
“Shareholder approval: Shareholders approve the Scheme at the
Scheme Meeting by the requisite majorities in accordance with
sections 236A(2)(a) and 236A(4) of the Companies Act”;
“Court approval: subject to clause 3.2, the Court approves the
Scheme in accordance with section 236 of the Companies Act”;
“No restraint: no judgment, order, restraint or prohibition enforced
or issued by any Government Agency is in effect at 8.00am on the
Implementation Date, that prohibits, prevents or materially restricts
the implementation of the Scheme”;
“No Material Adverse Change: no Material Adverse Change occurs
between the date of this Agreement and 8.00am on the
Implementation Date”;
“No Prescribed Occurrence: no Prescribed Occurrence occurs
between the date of this Agreement and 8.00am on the
Implementation Date”.
- Access, information and conduct of business
24 Clause 9 of the SIA provides APVG with certain rights to access
information about Metlifecare, and certain confirmations about the
conduct of the Metlifecare business, from the date of the SIA until
and including the Implementation Date.
25 Relevant to this proceeding, clause 9.2 provides:
“From the date of this Agreement until and including the
Implementation Date, Target must ensure that it and each member
of the Target Group:
(a) carries on its business as a going concern in the ordinary
course and in substantially the same manner as conducted in
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the 12 months prior to the date of this Agreement and does
not make any significant change to the nature or scale of its
business or enter any business or undertake any activities in
which it was not engaged as at the date of this Agreement;
…
(c) uses all reasonable endeavours to:
…
(ii) preserve its relationships with all Government
Agencies and all residents, suppliers, licensors, joint
venturers and others with whom it has business
dealings;
(d) does not:
…
(iii) incur any capital expenditure which would result in the
aggregate capital expenditure incurred by the Target
Group:
(A) during FY20 varying from the Target Group’s
capital expenditure budget for FY20 as fairly
disclosed in the Due Diligence Materials (the
FY20 Capex Budget); or
(B) during FY21 varying from the Target Group’s
capital expenditure budget for FY21 approved
by Bidder in accordance with clause 9.2(e)
(FY21 Capex Budget),
where such variance (whether a positive or negative
variance) is:
(C) in respect of construction capital expenditure,
more than the lesser of:
(a) $5 million; or
(b) 5% of the amount budgeted for
construction capital expenditure in the
FY20 Capex Budget or the FY21 Capex
Budget;
(D) in respect of remediation programme capital
expenditure, more than the lesser of:
(a) $1.9 million; or
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(b) 10%
(E) in respect of refurbishment and maintenance
capital expenditure, more than the lesser of:
(a) $1.5 million; or
(b) 5% of the aggregate amount budgeted
for refurbishment and maintenance
capital expenditure in the FY20 Capex
Budget or the FY21 Capex Budget;
…
(x) enter into, waive any material rights under, vary or
terminate any contract, commitment or arrangement
(other than a procurement contract) which:
…
(C) is otherwise of material importance to the
business of the Target Group;
…
(xi) not enter into any contract, commitment or
arrangement, or make any payment to any Related
Entity or a Representative of the Target Group or a
Related Entity other than in the ordinary course of
business.”
- Material Adverse Change
26 The SIA defines Material Adverse Change as follows:
“Material Adverse Change means any matter, event, condition or
change in circumstances or thing which occurs or is announced, and
which is not an Excluded Event, (each a Specified Event) and which
individually, or when aggregated with all other Specified Events,
reduces or is reasonably likely to reduce:
(a) the consolidated net tangible assets of the Target Group
taken as a whole by at least NZ$100 million; or
(b) the consolidated underlying net profit (including non-recurring
items and calculated using the same accounting policies and
methodologies of the Target Group in place as at the date of
this agreement) of the Target Group in any financial year (in
the FY20F year, being as set out on page 49 of the
management presentation dated 4 December 2019) by 10%
or more against what it would reasonable have been expected
to be but for the Specified Event(s);
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provided that such event, condition, matter or change in
circumstance is not the result of:
(c) a matter, event, condition or change in circumstance, to the
extent that it was fairly disclosed to the Bidder in the Due
Diligence Materials or by Target through the NZX market
announcements platform two Business Days before the date
of this Agreement;
(d) done or not done at the written request or with the written
approval of Bidder;
(e) resulting from the actual or anticipated change of control of
Target contemplated by the Transaction;
(f) resulting from changes in general economic conditions, the
publicly traded securities market in general or law; and
(g) resulting from changes in generally accepted accounting
policies or the judicial interpretation of them.
provided however, that with respect to clause (f), such matter does
not have a materially disproportionate effect on the Target Group.”
- Prescribed Occurrence
27 The SIA defines Prescribed Occurrence as follows:
“Prescribed Occurrence means the occurrence of any of the events
listed in Schedule 1 other than an event agreed to by Bidder in
writing.”
28 Relevant to this proceeding, the events listed in Schedule 1 of the
SIA include:
“11. Target breaches any of the provisions in clauses 9.2 and 9.3,
the effect of which is material to the Target Group taken as a
whole.”
- Termination provisions
29 Relevant to this proceeding, clause 14.1 of the SIA provides:
“Subject to clause 14.3, Bidder may terminate this Agreement by
giving notice in writing to Target before 8.00am on the
Implementation Date if:
…
(c) a Material Adverse Change occurs on or after the date of this
Agreement; or
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(d) a Prescribed Occurrence occurs on or after the date of this
Agreement;”
30 Pursuant to clause 14.3, APVG may only exercise a right of
termination under clause 14.1 if:
“(a) the party wishing to terminate has given notice to the other
party or parties (as applicable) setting out the circumstances
that it considers permit it to do so and starting its intention to
do so;
(b) the relevant circumstances have not been remedied within 10
Business Days after the time that the notice is given or any
shorter period ending at 5.00pm on the day before the
Implementation Date; and
(c) the party wishing to terminate does so before the earlier to
occur of 15 Business Days after the time that the notice is
given and 8.00am on the Implementation Date.”
- Scheme Plan
31 The key terms of the Scheme, as set out in the Scheme Plan in
Annexure A of the SIA, are:
31.1 the “Scheme Record Date” will be 5.00pm on the fifth
business day after the day of the final Court orders;
31.2 the parties are Metlifecare, APVG, and the “Scheme
Shareholders” of Metlifecare, being those who are registered
on Metlifecare’s share register on the Scheme Record Date;
31.3 Metlifecare will apply to suspend trading in its shares on both
the NZX and ASX with effect from two Business Days after
the making of the Final Orders, or such other date as is
agreed by Metlifecare and APVG in writing (clause 5.1(f) of
the SIA);
31.4 transfers of any Metlifecare share after the Scheme Record
Date will not be recognised (clause 5.1);
31.5 APVG will pay NZ$7.00 cash for each Metlifecare share
registered as at the Scheme Record Date into a trust account
operated by Computershare, Metlifecare’s share register, as
trustee for the Scheme Shareholders (clauses 2.1 and 2.2);
31.6 that payment in NZD made by APVG is to occur no later than
5.00pm on the Business Day prior to the “Implementation
Date” (the Implementation Date being two Business Days
after the Scheme Record Date, or such as other date as
agreed in writing by Metlifecare and APVG) (clause 2.1);
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31.7 provided that the Scheme Consideration has been paid by
APVG as set out above, on the Implementation Date all the
Scheme Shares will be transferred to APVG without any
further act or formality. Metlifecare will enter APVG into the
share register (clause 3(a));
31.8 Metlifecare will arrange for payment from the trust account to
each Scheme Shareholder (clause 3(b));
31.9 the transfers are to be free of any encumbrance (clause 6.2).
Equity Commitment Letter
32 Also on 29 December 2019, EQT Infrastructure IV EUR SCSp and
EQT Infrastructure IV USD SCSp, each represented by EQT Fund
Management S.à r.l., executed an Equity Commitment Letter (the
Equity Commitment Letter).
33 By the Equity Commitment Letter, inter alia, EQT Infrastructure IV
EUR SCSp and EQT Infrastructure IV USD SCSp (the Investors):
33.1 severally committed in accordance with and subject to the
terms of the Equity Commitment Letter, to provide to APVG
either (clause 1.1):
(a) the amount equal to the purchase price of the
Metlifecare shares in time for APVG to satisfy its
payment obligations under clause 2.3 of the SIA and
the Deed Poll; or
(b) the amount equal to the Reverse Break Fee if the SIA
is terminated pursuant to clause 14.2 of the SIA;
to the amount of (Schedule):
(c) (in respect of EQT Infrastructure IV EUR SCSp), the
sum of NZ $991,763,500 or, in relation to the Reverse
Break Fee, 64.61 per cent; and
(d) (in respect of EQT Infrastructure IV USD SCSp), the
sum of NZ $543,236,500 or, in relation to the Reverse
Break Fee, 35.69 per cent; and
33.2 acknowledged that, Metlifecare has the right to cause APVG
to seek an injunction, or other appropriate form of specific
performance or equitable relief, and to cause APVG to cause
the Investors to fund their commitments in respect of the
purchase price or the Reverse Break Fee, where (clause 6.2):
(a) Metlifecare is entitled to specific performance in
accordance with the SIA to cause the Scheme to be
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implemented or consummated or the Reverse Break
Fee to be paid; and
(b) Metlifecare has given written notice to APVG and the
Investors stating Metlifecare’s unqualified acceptance
of, and agreement to comply with, the provisions of the
Equity Commitment Letter.; and
33.3 confirmed that:
(a) the parties acknowledge and agree that damages may
not be an adequate remedy for any breach of the
provisions of the Equity Commitment Letter, and that
in addition to any other available remedies (which may
include money damages), the remedies of specific
performance and/or injunctive relief may be available
as a remedy for any threatened or actual such breach
(clause 10.3); and
(b) the Equity Commitment Letter shall be governed by
and construed in accordance with the laws of New
Zealand. The courts having jurisdiction in New Zealand
have non-exclusive jurisdiction to settle any dispute
arising out of or in connection with this letter and each
party irrevocably submits to the non-exclusive
jurisdiction of the courts having jurisdiction in New
Zealand (clause 10.8).
34 The obligations in the Equity Commitment Letter are subject to the
SIA having been executed and legally binding on all parties, the
satisfaction and waiver of the Conditions in the SIA, no party having
terminated the SIA in accordance with its terms, and the Scheme
becoming effective.
Deed Poll
35 On 11 March 2020 APVG executed the Deed Poll required by the SIA
and delivered it to Metlifecare.
36 The Deed Poll obliges APVG to pay the Scheme Consideration in
accordance with the terms of the Scheme and provides that:
36.1 subject to the SIA not being terminated and the Scheme
having become unconditional, APVG undertakes to pay the
Scheme Consideration of NZ $7.00 per share in cleared funds
into a trust account Metlifecare nominates (clause 4.1); and
36.2 the funds in the trust account must be paid in satisfaction of
the Scheme Shareholders’ entitlements to receive the Share
Consideration under the Scheme in accordance with the
Scheme Plan (clause 4.2).
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37 The Deed Poll:
(a) confers benefits on the Scheme Shareholders as
defined in the Scheme Plan (clause 2(a)); and
(b) records that under the Scheme Plan each Scheme
Shareholder appoints Metlifecare as each Scheme
Shareholder’s attorney and agent to enforce the Deed
Poll against APVG with effect on and from the date
prescribed for such appointment in the Scheme Plan
(clause 2.1(b)).
Steps taken by Metlifecare and APVG in accordance with the
SIA
38 From 29 December 2019 Metlifecare and APVG took various steps to
meet their respective obligations under the SIA, as set out below.
- Overseas Investment Office approval
39 On 16 January 2020 Metlifecare provided the Overseas Investment
Office with a “vendor information form” in connection with the
application for Overseas Investment Office approval.
40 On 20 January 2020 APVG submitted its application for Overseas
Investment Office Approval which explained, inter alia, that:
40.1 APVG and EQT Infrastructure IV Fund were the Applicants;
40.2 APVG intends to finance the proposed transaction by way of
equity from the EQT Infrastructure IV Fund, which has total
committed capital of approximately EUR 9 billion, and
potential co-investors;
40.3 EQT Infrastructure IV Fund is the indirect owner of Asia
Pacific Village Holdings Limited, the sole shareholder of APVG;
40.4 EQT Infrastructure IV Fund and EQT Fund Management have
the business experience and acumen as required under the
Overseas Investment Act 2005 in respect of the proposed
transaction;
40.5 EQT Infrastructure IV Fund will provide the financial
commitment necessary;
40.6 irrespective of the outcome of negotiations with any co-
investors, EQT Infrastructure IV Fund will control the majority
of the proposed investment and will, therefore, maintain
control of Metlifecare.
- Independent Adviser’s Report
41 Metlifecare appointed KordaMentha to provide an Independent
Adviser’s Report on the merits of the Scheme, and on 30 December
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2019 KordaMentha applied to the Takeovers Panel for approval of
that appointment.
42 On 7 January 2020 the Takeovers Panel approved KordaMentha’s
appointment as the Independent Adviser.
43 In its final draft report in May 2020 the Independent Adviser
concluded that the Scheme Consideration is within the Independent
Adviser’s valuation range for the Metlifecare shares, and assessed
the value of Metlifecare shares to be within the range of NZ $6.50 to
$7.65 per Metlifecare share. The valuation of Metlifecare as set out
in the report was determined on 5 March 2020, based on forecasts
provided by Metlifecare in February 2020.
- Statutory Supervisor Consent
44 On 23 January 2020 the condition of obtaining the consent of the
statutory supervisors of the Metlifecare group villages to the change
of control of Metlifecare arising from the Scheme was satisfied.
- Bank approval
45 On 17 February 2020 the condition of obtaining the consent of
Metlifecare’s lenders under bank facility agreements to the change
of control of Metlifecare arising from the Scheme was satisfied.
- Takeovers Panel engagement
46 From January 2020 Metlifecare engaged with the Takeovers Panel in
relation to the Scheme and in accordance with the Takeovers Panel
process for approval of schemes of arrangement.
47 On 18 March 2020 Metlifecare formally applied to the Takeovers
Panel for a letter confirming it was minded to issue a “no objection”
letter under section 236A(2)(b)(ii) of the Companies Act 1993
(Letter of Intention).
48 Metlifecare has continued to engage with the Takeovers Panel in
relation to the Scheme and the materials Metlifecare proposed to
put to its shareholders detailing and seeking shareholder approval of
the Scheme.
- Shareholder approval and Court orders
49 On 4 May 2020 Metlifecare filed an originating application and an
interlocutory application seeking initial orders under Part 15 of the
Companies Act 1993 to put the Scheme to its shareholders for
approval.
- Deed Poll
50 On 11 March 2020 APVG executed the Deed Poll as pleaded above.
Emergence of COVID-19 and New Zealand’s response
51 On 20 March 2020 Metlifecare announced to NZX and ASX that it
had not observed any material impact on its retirement village unit
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sales or admissions to residential aged care homes as a result of the
COVID-19 pandemic.
52 On 23 March 2020 the New Zealand Government announced that
New Zealand would be put into a “Level 4 lockdown” to respond to
and manage the COVID-19 pandemic.
53 On Wednesday 25 March 2020 at 11.59pm the New Zealand
Government’s Level 4 lockdown restrictions came into effect,
imposing strict restrictions on the conduct of many New Zealand
businesses and people.
Particulars
53.1 Epidemic Preparedness (COVID-19) Notice 2020 made on
24 March 2020 under section 5 Epidemic Preparedness Act
2006;
53.2 declaration of a state of national emergency under the Civil
Defence Emergency Management Act 2002 on 25 March
2020;
53.3 COVID-19 Response (Urgent Management Measures)
Legislation Act 2020 which commenced on Royal Assent on
25 March 2020 which, inter alia enabled the Chief Executive
of the Ministry for Education to direct all schools to close;
53.4 section 70(1)(m) Health Act Order made on 25 March 2020
(amended on 21 April 2020); and
53.5 section 70(1)(f) Health Act Order made on 3 April 2020
(amended on 21 April 2020).
54 In accordance with the Level 4 lockdown restrictions, Metlifecare’s
retirement villages and aged care homes were permitted to, and did
continue to, operate as an “essential” service for residents, however
while the Level 4 lockdown restrictions were in place:
54.1 sales and resales of Occupation Right Agreements were
restricted and the majority of planned settlements of
Occupation Right Agreements were temporarily delayed;
54.2 development activity paused, as required by law; and
54.3 Metlifecare’s remediation programme paused, as required by
law.
55 The Level 4 restrictions were lifted and the New Zealand
Government’s Level 3 restrictions came into effect at 11.59pm on
Monday 27 April 2020, under which:
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55.1 Metlifecare was able to allow some residents to move into
their units, and settlements of the Occupation Right
Agreements that were delayed as a result of the Level 4
lockdown restrictions could occur;
55.2 sales activity increased as prospective residents could make
appointments to view villages; and
55.3 construction activity and other aspects of the development
and remediation programmes resumed under enhanced
worker safety and workplace distancing requirements.
56 During several discussions and email communications from
13 March 2020 APVG and EQT Infrastructure IV Fund
representatives encouraged Metlifecare to consider and manage its
capital and liquidity needs, and strongly encouraged Metlifecare
management to conserve cash, consistent with the advice it gave
EQT-owned companies on its website on 19 March 2020.
57 Metlifecare and its 24 subsidiary companies applied for and received
the wage subsidy from the Ministry of Social Development amount
to a total of $7.1 million. Those applicant subsidiary companies
were, and remain, eligible to seek and receive that wage subsidy.
58 Metlifecare gave APVG reasonable access to information about, kept
APVG reasonably informed of, and consulted with APVG in relation
to the steps Metlifecare took in response to the Level 4 lockdown
restrictions.
APVG’s purported termination
59 On 7 April 2020 Metlifecare received a notice from APVG that
advised of its intention to terminate the SIA.
60 In the notice APVG asserted that:
60.1 the emergence and spread of “COVID-19” in New Zealand
had triggered the Material Adverse Change clause (MAC
clause) because it had reduced, or is reasonably likely to
reduce, the consolidated net tangible assets of Metlifecare by
at least $100 million and/or that it is reasonably likely to
reduce the consolidated underlying net profit (as described in
the MAC clause) of Metlifecare by at least 10% in FY20,
and/or FY21, and/or FY22 against what it would reasonably
have been expected to be but for the COVID-19 event; and
60.2 Metlifecare had not provided enough information to APVG to
enable APVG to adequately review the extent to which the
business was being run in the ordinary course and
notwithstanding the lack of information and consultation,
APVG considered that Metlifecare had breached clauses 9.2(a)
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and 9.2(d)(xi) and such breaches were Prescribed
Occurrences, giving rise to a termination right by APVG.
61 On 28 April 2020 APVG by notice purported to terminate the SIA in
accordance with clause 14.3(c) of the SIA (Notice of Termination).
62 APVG’s Notice of Termination alleged that:
(a) “Material Adverse Change: The emergence and spread of
COVID-19 is a Specified Event that has caused, or is
reasonably likely to cause, reductions in the value of
Metlifecare’s net tangible assets and consolidated underlying
net profits in excess of the thresholds identified in the
Material Adverse Change clause. Each of these reductions
entitles APVG to terminate the SIA;
(b) Prescribed Occurrences: Metlifecare has breached the interim
period restrictions by deferring development, remediation,
maintenance, and refurbishment projects outside of the
parameters of the SIA without APVG’s consent. APVG is also
concerned that Metlifecare has, without approval and in
breach of the SIA, applied for and taken a wage subsidy in
respect of entities that are not reasonably likely to be entitled
to the wage subsidy, which is a material arrangement that
creates reputational and repayment risks for Metlifecare.
Those unauthorised actions are material to Metlifecare and
entitle APVG to terminate the SIA.”
63 On 3 May 2020 APVG advised Metlifecare that it had withdrawn its
application for consent under the Overseas Investment Act 2005.
FIRST CAUSE OF ACTION: BREACH OF CONTRACT –
WRONGFUL REPUDIATION OF THE SCHEME
IMPLEMENTATION AGREEMENT BY ASIA PACIFIC VILLAGE
GROUP LIMITED
The plaintiff repeats paragraphs 1 to 63 above and says further:
64 The Notice of Termination is invalid for the reasons set out below.
No Material Adverse Change
65 APVG had no reasonable basis to conclude that a Material Adverse
Change had occurred, and none had in fact occurred:
65.1 the emergence and spread of the COVID-19 pandemic in New
Zealand is not a Specified Event for the purposes of the MAC
clause in the SIA, and APVG’s fundamental assumption that
COVID-19 has caused and will cause serious, widespread and
lasting detriment to Metlifecare’s business is not correct;
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65.2 APVG had no reasonable basis to conclude that the thresholds
in the MAC clause had been triggered, or were reasonably
likely to be triggered, and they had not in fact been triggered:
Particulars – Net tangible assets
(a) Metlifecare’s investment property portfolio, which
constitutes a significant portion of its net tangible
assets (NTA)) is independently valued every six
months, and its care homes portfolio is independently
valued once every year;
(b) in Metlifecare’s report of its half year financial results
as at 31 December 2019, confirmed on 26 February
2020, Metlifecare’s consolidated net tangible assets
were $1.49 billion;
(c) the external valuation methodology for the half-year
valuations are based on forecast village cash flows over
a long-term, 20-year period;
(d) there is no reason to adjust Metlifecare’s investment
property portfolio at present; and
(e) on 28 April 2020 Metlifecare’s consolidated NTA had
not fallen by, and was not reasonably likely to fall by,
more than $100m;
Particulars – Consolidated underlying net profits
(f) as set out on page 49 of the management presentation
dated 4 December 2019, Metlifecare’s forecast FY20
underlying net profit was $88.5 million;
(g) Metlifecare’s consolidated underlying net profit for FY20
has not fallen by, and is not reasonably likely to fall by,
more than 10%;
(h) based on scenarios the Metlifecare Board considered at
its meeting on 31 March 2020, as announced to the
NZX on 20 April 2020 and included in the draft Scheme
materials as at 26 April 2020, Metlifecare’s then
consolidated underlying profit expectations for FY20
were from $83 million to $90 million;
(i) Metlifecare’s most recent internal management forecast
of consolidated underlying profit for FY20, considered
by the Metlifecare Board on 29 April 2020 and
communicated to APVG, was $88.7 million;
(j) Metlifecare’s consolidated underlying net profit for any
other financial year is not reasonably likely to fall by,
more than 10%, against what it would reasonably have
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been expected to be, but for the emergence and
spread of the COVID-19 pandemic in New Zealand as
referred to in the Notice of Termination;
65.3 if, contrary to the above pleading, it is shown that there has
been or is reasonably likely to be a reduction in Metlifecare’s
consolidated net tangible assets or its consolidated underlying
net profit, this is the result of changes in general economic
conditions and/or changes in law:
(a) the change in circumstances currently experienced
across the economy in New Zealand and globally is a
general economic condition; and
(b) the restrictions impacting the operation of the
Metlifecare business and most other businesses in New
Zealand result from changes in law, being changes
which have been implemented through a number of
new legislative instruments.
Particulars
(i) Epidemic Preparedness (COVID-19) Notice 2020
made on 24 March 2020 under section 5
Epidemic Preparedness Act 2006;
(ii) declaration of a state of national emergency
under the Civil Defence Emergency Management
Act 2002 on 25 March 2020, as extended on
2 April 2020, 8 April 2020, 15 April 2020, 22
April 2020, 29 April 2020 and 6 May 2020;
(iii) COVID-19 Response (Urgent Management
Measures) Legislation Act 2020 which
commenced on Royal Assent on 25 March 2020;
(iv) section 70(1)(m) Health Act Order made on
25 March 2020 (as amended on 21 April 2020);
(v) section 70(1)(f) Health Act Order made on
3 April 2020 (as amended on 21 April 2020);
(vi) Health Act (COVID-19 Alert Level 3) Order 2020
made on 24 April 2020 (as amended through
Orders made on 29 April 2020, 8 May 2020 and
11 May 2020; and
(vii) COVID-19 Public Health Response Act 2020 (in
force from 13 May 2020).
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No Prescribed Occurrence
66 APVG had no reasonable basis to conclude that a Prescribed
Occurrence had occurred, and none had in fact occurred. In
particular, no breach of clauses 9.2 and 9.3 of the SIA occurred:
Particulars – Capex adjustments
66.1 Metlifecare gave APVG reasonable access to information
about, kept APVG reasonably informed of, and consulted with
APVG in relation to the steps Metlifecare took in response to
the Level 4 lockdown restrictions as set out in Appendix
Two;
66.2 Metlifecare’s responses to the Level 4 lockdown restrictions
did not result in a significant change to the nature and scale
of its business, and did not involve any business or
undertaking in which Metlifecare was not previously engaged;
66.3 deferrals in construction, remediation and refurbishment &
maintenance capital expenditure projects were necessary in
response to the Level 4 lockdown restrictions and Metlifecare
planned for remobilisation of the planned capital expenditure
spending to occur as quickly as practicable once the Level 4
lockdown restrictions were lifted;
66.4 deferrals in construction, remediation and refurbishment &
maintenance capital expenditure projects that were not in
response to the Level 4 lockdown restrictions were consented
to by APVG, as set out in Appendix Two, and to the extent
that APVG did not consent to any deferrals then APVG’s
consent has been unreasonably withheld in relation to the
works at the following villages:
(a) Pohutakawa Landing;
(b) Gulf Rise;
(c) Palmerston North;
(d) Dannemora Gardens; and
(e) Hibiscus Coast;
Particulars – Wage subsidy
66.5 applying for and receiving wage subsidies from the
Government for 25 Metlifecare group of companies:
(a) was lawful, in that the applicant companies were, and
remain, eligible to seek and receive the subsidy;
(b) was a reasonable and appropriate step to take in all of
the circumstances;
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(c) was consistent with EQT Infrastructure IV Fund’s (and
APVG’s) advice and recommendation, to consider and
manage its liquidity needs;
(d) was not a breach of clause 9.2(c)(ii) of the SIA, as it
was not a failure to use all reasonable endeavours to
preserve Metlifecare’s relationships with Government
Agencies and the other persons referred to in that
clause;
(e) was not a breach of clause 9.2(d)(x)(C) of the SIA as it
was not the entry into a contract, commitment or
arrangement that was of material importance to the
business of the Target Group as a whole;
(f) cannot constitute a breach of clause 9.2(d)(xi) of the
SIA, as that clause relates to contracts, commitments,
arrangements and payments to Related Entities and
similar persons; and
66.6 in any event, none of the above matters has an effect which
is material to the group taken as a whole, such that they
justify termination of the SIA.
67 For the reasons set out in paragraphs 64 to 66 above, APVG
repudiated the SIA.
68 Metlifecare affirmed the SIA and advised APVG that it remains
committed to the agreement and will continue to perform its
obligations in good faith, including to use all reasonable endeavours
to satisfy the remaining conditions.
69 Damages will not be an adequate remedy. The second and third
defendants have by the Equity Commitment Letter committed to
fund payment of the Scheme Consideration and the plaintiff is
entitled to specific performance.
AND the plaintiff claims:
(a) a declaration that:
(i) APVG’s Notice of Termination dated 27 April 2020 and
received 28 April 2020 did not terminate the Scheme
Implementation Agreement between Metlifecare and APVG,
dated 29 December 2019; and
(ii) the Scheme Implementation Agreement, Deed Poll and Equity
Commitment Letter remain in force and binding on the
parties;
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(b) an order for specific performance compelling Asia Pacific Village
Group Limited to comply with its obligations under the Scheme
Implementation Agreement and Deed Poll in full, including to:
(i) pay consideration for each Scheme share (clause 2.3);
(ii) do everything reasonably necessary to implement the
Scheme in accordance with the SIA (clause 2.4);
(iii) seek all consents required under the Overseas Investment Act
2005 to the implementation of the Scheme (clause 3.1(a));
(iv) make all applications necessary to satisfy the Regulatory
Conditions, provide copies of such applications, and consult
with Metlifecare in relation to all material communications
(clause 3.4);
(v) if the Scheme becomes effective, accept a transfer of Scheme
Shares and provide Consideration in accordance with
clause 2.3 and the Deed Poll (clause 5.2(b));
(vi) comply with the terms of the Scheme Plan in Annexure A;
(c) such consequential orders as may be necessary to give effect to the
above orders; and
(d) costs.
SECOND CAUSE OF ACTION AGAINST FIRST, SECOND, AND
THIRD DEFENDANTS: ENFORCEMENT OF METLIFECARE’S
THIRD PARTY BENEFICIARY RIGHTS UNDER THE EQUITY
COMMITMENT LETTER
The plaintiff repeats paragraphs 1 to 69 above and says further:
70 Pursuant to clause 6.2 of the Equity Commitment Letter executed by
EQT Infrastructre IV EUR SCSp and EQT Infrastructure IV USD
SCSp, each represented by EQT Fund Management S.à r.l., on 29
December 2019:
70.1 the Investors acknowledge that Metlifecare has the right to
cause APVG to seek an injunction, or other appropriate form
of specific performance or equitable relief, and to cause APVG
to cause an Investor to fund, directly or indirectly, their
commitments in respect of the purchase price or the Reverse
Break Fee under the SIA, as applicable where;
(a) Metlifecare is entitled to specific performance in
accordance with the SIA to cause the Scheme to be
implemented or consummated or the Reverse Break
Fee to be paid; and
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(b) Metlifecare has given written notice to APVG and the
Investors stating Metlifecare’s unqualified acceptance
of, and agreement to comply with, the provisions of the
Equity Commitment Letter.
70.2 Metlifecare‘s right to cause APVG to cause the Investors to
fund their commitments is acknowledged as third party
beneficiary rights of Metlifecare; and
70.3 APVG’s obligations are given for the benefit of Metlifecare and
are intended to be enforecable against APVG by Metlifecare.
71 As a result of APVG’s wrongful repudiation of the SIA, Metlifecare is
entitled to specific performance against APVG to cause the Scheme
to be implemented.
72 Metlifecare has by written notice accepted and agreed to comply
with the provisions of the Equity Commitment Letter.
73 In accordance with the Equity Commitment Letter Metlifecare
therefore has the right to cause APVG to cause the second and third
defendants to fund the Equity Commitments, being the amount
equal to the purchase price of the Metlifecare shares for APVG to
satisfy its payment obligations under clause 2.3 of the SIA and the
Deed Poll.
AND the plaintiff claims:
(a) an order for specific performance compelling Asia Pacific Village
Group Limited to:
(i) enforce its rights against EQT Infrastructre IV EUR SCSp and
EQT Infrastructure IV USD SCSp pursuant to clause 6.2 of the
Equity Commitment Letter; and
(ii) cause the Investors to fund, directly or indirectly, their Equity
Commitments as set out in the Equity Commitment Letter;
(b) as a consequence of APVG causing the Investors to fund the Equity
Commitments in accordance with the Equity Commitment Letter, an
order for specific performance compelling EQT Infrastructure IV EUR
SCSp and EQT Infrastructure IV USD SCSp to fund the Equity
Commitments as set out in the Equity Commitment Letter;
(c) such consequential orders as may be necessary to give effect to the
above orders; and
(d) costs.
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This document is filed by Michael David Arthur, solicitor for the plaintiff, of
the firm Chapman Tripp. The address for service of the plaintiff is at the
offices of Chapman Tripp, Level 38, 23 Albert St, Auckland.
Documents for service on the plaintiff may be delivered to that address or
may be:
(a) posted to the solicitor at PO Box 2206, Auckland; or
(b) emailed to the solicitor by the email addresses on the front page of
this document provided the document is emailed to both Chapman
Tripp addressees listed there.
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APPENDIX ONE: EQT STRUCTURE FOR METLIFECARE INVESTMENT
(SIMPLIFIED)
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APPENDIX TWO: CORRESPONDENCE
A1 During the due diligence process in Metlifecare provided to EQT
Infrastructure Fund IV,1 inter alia:
A1.1 a FY20 and FY21 Capex Budget;
A1.2 remediation figures and forecasting including projections
through to FY23;
A1.3 development expenditure information from FY17 to FY20;
A1.4 development forecasts;
A1.5 relicensing forecasts (Sensitivity to HPI); and
A1.6 a Bank Model for FY20.
A2 On 29 January 2020 a meeting was held between EQT Infrastructure
IV Fund representatives and Metlifecare representatives to discuss
the Metlifecare business, with particular emphasis on financials and
specific updates on progress and financial metrics of development
projects.
A3 On 13 February 2020 Metlifecare provided to EQT Infrastructure IV
Fund via email a pack for the Development Committee meeting
scheduled for 17 February 2020.
A4 On 18 February 2020 a meeting was held between EQT
Infrastructure IV Fund representatives and Metlifecare executives.
A5 On 26 February 2020 a two-hour teleconference was held between
EQT Infrastructure IV Fund representatives and Metlifecare
executives and a director, in which the attendees primarily
discussed Metlifecare’s recently released half year results, the
business generally and progress of Metlifecare’s development
projects. A specific action recorded from that teleconference was
the request from Metlifecare to EQT Infrastructure IV Fund to email
any questions on the Gulf Rise project (detailed information having
already been provided to EQT Infrastructure IV Fund) prior to the
upcoming meeting on 3 March 2020. No such questions were
emailed.
A6 On 27 February 2020 Metlifecare provided to EQT Infrastructure IV
Fund via email the draft Development Committee meeting minutes
from its 17 February 2020 meeting.
1 Including, in every reference to EQT Infrastructure IV Fund in this Appendix, on
behalf of APVG.
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A7 On 3 March 2020:
A1.1 a “Town Hall” meeting was held between Metlifecare staff and
representatives of EQT Infrastructure IV Fund;
A1.2 a meeting was held between EQT Infrastructure IV Fund
representatives and Metlifecare executives; and
A1.3 a Development meeting was held between EQT Infrastructure
IV Fund representatives and Metlifecare. Metlifecare
executives explained that the second phase of the Gulf Rise
project (P2) was expected to start later than had been earlier
planned, as a result of the shift in construction procurement
approach, from a partial tender and negotiation, to a fixed
price lump sum on full documentation approach. The
advantage of that approach was cost certainty. EQT
Infrastructure Fund IV representatives agreed with that
approach, having encouraged management since February
2020 to look at ways to increase profitability on the Gulf Rise
project rather than press ahead to the original schedule.
A8 On 19 March 2020 Metlifecare provided to EQT Infrastructure IV
Fund via email packs containing all papers and appendices for the
Development Committee meeting and People and Remuneration
Committee meeting, scheduled for 23 March 2020.
A9 On 24 March 2020 Metlifecare provided to EQT Infrastructure IV
Fund via email a breakdown of the operating expenditure and
capital expenditure reductions and delays.
A10 On 26 March Metlifecare further provided to EQT Infrastructure IV
Fund via email an updated copy of the bank model updated with
data to the end of February 2020.
A11 On 27 March 2020 Metlifecare advised EQT Infrastructure IV Fund
via email that construction, remediation, and refurbishment capital
expenditure would be lower than budgeted for FY20, and sought
APVG’s approval.
A12 On 29 March 2020:
A12.1 Metlifecare provided to EQT Infrastructure IV Fund via email
the draft Development Committee minutes from the 23 March
2020 meeting, and advised the People and Remuneration
Committee meeting originally scheduled for 23 March 2020
was to be rescheduled. Metlifecare further sent a February
2020 executive report, a March 2020 CEO report, Special
Board meeting minutes, and a sales tracker report; and
A12.2 Metlifecare also advised EQT Infrastructure IV Fund via email
it would provide further information sought by EQT
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Infrastructure IV Fund and arranged, at EQT Infrastructure IV
Fund’s request, to begin weekly discussions to discuss the
business generally and monitor the COVID-19 developments.
A13 On 31 March 2020 Metlifecare provided to EQT Infrastructure IV
Fund a “Covid-19 Financial Overview” including scenarios modelled
on different assumptions which showed consolidated underlying net
profit scenarios.
A14 On 1 April 2020 a discussion was held between Metlifecare
executives and representatives from EQT Infrastructure IV Fund.
Metlifecare provided information on a range of topics including
Metlifecare’s forecast and plans for the ongoing Level 4 lockdown
restrictions, the wage subsidy application, and general information
including development sales and occupancy rates.
A15 On 3 April 2020 Metlifecare provided EQT Infrastructure IV Fund via
email with information on leads, applications and settlement data, a
further updated bank model with sensitivity analysis functionality, a
summary of the differences between the FY20 Budget provided in
due diligence and the latest position post-Level 4 lockdown, and an
updated cost savings/deferral summary.
A16 On 8 April 2020 Metlifecare provided EQT Infrastructure IV Fund via
email with information regarding its wage subsidy application,
including an internal management paper.
A17 On 9 April 2020:
A17.1 Metlifecare provided EQT Infrastructure IV Fund via email a
table of the information it had disclosed to date in response to
various requests, and advised what further information was to
be provided; and
A17.2 a discussion was held between Metlifecare executives and
representatives from EQT Infrastructure IV Fund. Metlifecare
provided information and answered questions about
Metlifecare’s response to Level 4 and preparations for Level 3,
the wage subsidy and other matters.
A18 On 14 April 2020 a discussion was held between Metlifecare
executives and representatives from EQT Infrastructure IV Fund.
Metlifecare provided information and answered several questions
about sales application process, sales projections, and how
settlement of sales were progressing.
A19 On 16 April 2020:
A19.1 Metlifecare provided EQT Infrastructure IV Fund via email
with information regarding Metlifecare’s expected settlements
for March, documentation concerning the wage subsidy
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applications, and spreadsheets outlining Metlifecare’s cost
reductions and Capex variations. Metlifecare sought written
confirmation of APVG’s consent to various matters;
A19.2 at around 3pm, a discussion was held between Metlifecare
executives and representatives from EQT Infrastructure IV
Fund. Information was provided to EQT Infrastructure IV
Fund on a variety of topics including lockdown response, sales
projections and changes to capital expenditure; and
A19.3 further information regarding site shut-downs as a result of
the Level 4 lockdown restrictions was emailed to EQT
Infrastructure IV Fund.
A20 On 17 April 2020:
A20.1 Metlifecare advised EQT Infrastructure IV Fund via email that
some information sought by EQT Infrastructure IV Fund
regarding scenario planning for FY21 was not available, but
what was available had been provided; and
A20.2 Metlifecare provided EQT Infrastructure IV Fund information
about sales incentives provided, and Metlifecare’s Short Term
Incentive scheme.
A21 On 19 April 2020 Metlifecare emailed EQT Infrastructure IV Fund to
provide further information, to record that EQT Infrastructure IV
Fund had previously been provided with substantial information
regarding capital expenditure and to seek written confirmation of
APVG’s consent to certain matters.
A22 On 21 April 2020 Metlifecare emailed EQT Infrastructure IV Fund to
provide further information requested by EQT Infrastructure IV
Fund, including in relation to various development and other
projects. Metlifecare repeated its request for written confirmation of
APVG’s consent to certain matters.
A23 On 22 April 2020 a discussion was held between Metlifecare
executives and representatives from EQT Infrastructure IV Fund.
Metlifecare provided information to EQT Infrastructure IV Fund on
several topics including Metlifecare’s plans for the Level 3 and Level
2 restrictions, alongside financial information for March 2020.
A24 Metlifecare provided representatives of EQT Infrastructure IV Fund,
within the prescribed period set out in the SIA (being three business
days after being sent to the Metlifecare Board/relevant Board Sub-
Committee) with:
A24.1 monthly Executive and CEO reports;
A24.2 Metlifecare Board papers and minutes;
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A24.3 Metlifecare Board Sub-Committees’ (Audit & Risk Committee,
Development Committee, People & Remuneration Committee
and Resident Experience & Care Committee) papers and
minutes from 29 December 2019 to and including 15 May
2020.
A25 Metlifecare also provided representatives of EQT Infrastructure IV
Fund with:
A25.1 regular sales trackers including on 23 March 2020, 26 March
2020, 29 March 2020, 8 April 2020, 22 April 2020, 23 April
2020, 24 April 2020, being on a more regular basis than were
sent to the Metlifecare Board;
A25.2 updates via regular scheduled and informal telephone
conversations, in-person meetings, teleconferences and video
conferences, including those set out above;
A25.3 regular exchanges of emails from 29 December 2019 until 28
April 2020;
A25.4 regular updates on the New Zealand Government’s response
to COVID-19 and related issues during April 2020; and
A25.5 other ad hoc information, both voluntarily and as requested
by EQT Infrastructure IV Fund.
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