AUSTRALIAN
M&A INFRASTRUCTURE INSIGHTS
FEBRUARY 2014
Developments, insights and trends for professionals with
an interest in the Australian infrastructure sector
Welcome to the January-February
2014 edition of Corrs’ M&A
Infrastructure Insights, a bimonthly publication prepared by
Corrs Chambers Westgarth with
a focus on issues, developments
and trends relevant to investors
in Australian brown-field
infrastructure assets.
IN THIS ISSUE:
ALTERNTIVE FUNDING
FOR INFRASTRUCTURE
We share our thoughts on Queensland’s
recent announcement that it will
investigate private sector funding
for state-owned transmission and
distribution businesses through the
issue of non-share equity interests.
THIN CAPITALISATION
The thin capitalisation rules are in a
state of flux with changes proposed to
the safe harbour test and consideration
being given to reform of the arm’s length
debt test. What does this mean for
infrastructure investments?
LEASEHOLD INTERESTS
AND SECURITY OF TENURE
We discuss a recent case that for the
first time allows a liquidator of an
insolvent lessor to disclaim the burden
of a lease it has granted, placing the
question of security of tenure for long
term investors who rely on leases or
licenses squarely in the frame.
AN INTERESTING READ
EDITOR:
ROBERT
CLARKE
Partner, Melbourne
Tel +61 3 9672 3215
robert.clarke@corrs.com.au
Infrastructure Australia’s recent (relatively short) paper Australia’s Public Infrastructure, Update Paper, Balance Sheet impacts
of Sell to Build rounds out its October 2012 paper Australia’s Public Infrastructure – Part of the Answer to Removing the
Infrastructure Deficit. The update looks at the balance sheet impacts from asset transfers, and quite interestingly uses several
well known listed infrastructure entities as its private sector comparator for dividend yield and interest cover ratios that are
found in the 30 selected state owned enterprises covered by the report. It also addresses squarely some of the anti-divestment
propositions that stem from the economic benefits of continued ownership, including the loss of tax equivalent payments and
margins accruing to governments on the spread between its borrowing rate (historically low) and the rate at which it lends to state
owned enterprises. It presents a succinct case for supporters of asset recycling, and is an interesting read in light of the issues
canvassed in our discussion on Queensland’s private sector funding model. It can be found here.
How can we improve?
We are always striving to improve our newsletters to make them more relevant. We welcome your
feedback on suggested themes/topics and any questions or general comments. Every person whose
suggestion is implemented will receive a small gift from us. Contact the editor for feedback.
AUSTRALIAN
M&A INFRASTRUCTURE INSIGHTS
FEBRUARY 2014
OUR THINKING
PRIVATE SECTOR FUNDING OF INFRASTRUCTURE:
The Queensland Non Share Equity Interest Proposal
The Newman Government in
Queensland will investigate
private sector infrastructure
funding for state-owned
transmission and distribution
businesses, through the issue
of non-share equity interests
(NSEIs) by the State’s whollyowned utility companies to fund
capital expenditure.
While the detail that is necessary to
consider the issues and opportunities is
yet to be released, it will be interesting
to analyse the feedback that is provided
once the detail is released and market
sounding commences. (Rothschild and
Bank of America Merrill Lynch have been
appointed as the scoping study advisers).
There are many issues that will need to
be carefully navigated. Apart from the
structuring considerations that will need
to be considered in order to obtain the
sought after accounting, taxation and
credit rating agency treatment of these
hybrid instruments, some initial thoughts
are set out below.
1. The commercial context of the
potential transaction is challenging for
legal, economic and political reasons.
For example:
a. The regulated returns available to
utility owners are under pressure.
As part of its Better Regulation
reform program1, the Australian
Energy Regulator (AER) outlined
three key revisions to their Rate of
Return calculation, which involve:
i. considering a broader range
of material in estimating the
expected return on equity,
which may result in a modified
Sharpe–Lintner CAPM utilising
such materials as the theory of
the Black CAPM, dividend growth
model outputs to inform the
input parameters for the Sharpe–
Lintner CAPM, the estimated
return on equity from the Wright
approach, valuation and broker
reports, and other regulators;
ii. changing from the current ‘on
the day’ approach to a trailing
average portfolio approach for
estimating the return on debt
using a simple 10 year average
updated annually, phased in
over 10 years; and
iii.considering a broader range of
material to inform the estimation
of the value of imputation credits.
The cost of capital changes will be
tested in the second half of 2014 on
three New South Wales distribution
businesses – Ausgrid, Endeavour
Energy and Essential Energy as well
as transmission business Transgrid
and Australian Capital Territory
utilities Transend and ActewAGL.
b.Amendments to the National
Electricity and Gas Laws, endorsed
by the Council of Australian
Governments (COAG) and developed
by the Standing Council on Energy
and Resources (SCER), have
introduced a tougher appeals
process for utility companies looking
to contest aspects of their ruling.
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1 The AER has just published “Better Regulation for Utilities” outlining their approach to resets from 1 July 2014 onwards.
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M&A INFRASTRUCTURE INSIGHTS
Before being granted leave to appeal
the AER’s decision, the Applicant
must also satisfy the Tribunal that it
has established a prima facie case
that a determination made by the
Tribunal would be likely to, result
in a materially preferable NEO
decision. In determining whether
the decision is likely to be materially
preferable, the second reading
speech explains that the intention of
Parliament is that the Tribunal is to
undertake an holistic assessment
of whether its decision is likely
to deliver a materially preferable
outcome in the long term interests
of consumers, as set out in the
national electricity objective and the
national gas objective.
c. The Grattan Institute recently
published a report Shock to the
system: Dealing with falling
electricity demand. That report
draws attention to the falling
demand for power in Australia.
Since 2006, average household
usage has fallen by more than 7%,
during which time the electricity
market has seen price rises
by more than 85%. The report
suggests that the cause of this
disparity stems from the regulated
monopoly structure of electricity
distribution and transmission
companies. So while demand
drops the method of calculating
returns to the utility companies
does not respond to market forces
(ie demand) and the per unit prices
payable increase. If one projects
forward, we may continue to see
falling demand as more households
move to solar panels and battery
storage because of the increasing
costs, which creates the ‘death
spiral’ the report refers to.
Therefore, an investment proposition
for the NSEI will be tested with the
infrastructure investor market in an
environment where economic (and
political) pressures are likely to increase
to test and challenge the accepted
regulated return model.
2. Indirect investments versus the control
rights and influence that long term
infrastructure investors typically want.
a. The governance rights available to
NSEI holders (as set out in the terms
of the instruments) will, to state the
obvious, be critically important. In
large measure the rights should
reflect the economic terms of the
instruments: on first principles an
FEBRUARY 2014
instrument conferring equity type
risks and returns should in principle
reflect equity type protections,
while a fixed return instrument will
raise different issues and therefore
warrant different protections.
Regardless, it seems clear that
control or ownership rights (as
opposed to basic protections)
are unlikely to be available. The
absence of control for the typical
investor audience will raise issues.
b.Preparing for the regulatory reset
process and supporting a position in
relation to efficient capex and opex
is a significant part of the business
strategy, a process that starts years
out from the submission deadline.
(As indicated above, that process
– and the ability to challenge
AER findings – is about to get
tougher.) We wonder whether NSEI
investors will accept having little
or no control into the regulatory
reset process, when revenue and
hence dividends, directly reflects
the reset outcome. Again, the
answer might be that it does not
matter if there are fixed or certain
returns available to investors. In the
absence of that, will investors be
comfortable with little say into how
the operation and revenue reset
process are conducted, or indeed,
how management are appointed,
remunerated or assessed.
c. These utility companies are
state-owned corporations,
subject to, first and foremost,
Queensland’s Government Owned
Corporations Act 1993 (Qld) (GOC
Act) (and it would seem that the
characterisation of the NSEIs as
legally debt instruments is intended
to squarely not change that
position). So although utilities are,
as a technical matter, companies
incorporated under Australia’s
Corporations Law, key governance
and control arrangements
(including in relation to funding) are,
by virtue of being a state-owned
entity, set out in the GOC Act. Will
that setting appeal to long term
infrastructure investors?
d.Again, the overall context is
interesting: on the one hand the
State will control the board of the
utility company as a commercial
enterprise; on the other hand the
State will be subject to the usual
pressures that Governments face
when, for example, electricity costs
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increase. How will that inherent
conflict be addressed, and what
change in law and ‘government
action’ protections will be available
to NSEI holders?
3. Not much is said about ‘tax equivalent
payments’ (TEPs). However, it would
seem that the economic returns
embedded into the NSEIs would at
least need to be designed to place NSEI
holders in the same economic position
they would be in if the utility were a
‘normal’ corporate tax payer (where
Commonwealth tax is paid by the utility
and franking credits are created for
the benefit of resident equity investors)
(ie that there will need to be a grossup on the returns paid by the utility).
The question will be the treatment of
the dividend and TEPs portion of the
returns on the NSEIs in the hands
of both resident and non-resident
investors. The rules are complex and
it will be interesting to see how the tax
position for resident and non-resident
investors is constructed. For example,
will offshore investors be in a better
position through the application of
applicable double tax treaties which
may lower the effective rate of tax
imposed on returns to particular
investors? It has been suggested by
some that these will be structured to
fall outside Australia’s tax net, however
the High Court decision in McNeil (in
relation to shareholder sell back rights)
suggests the characterisation and tax
treatment of these “returns” may not
be straight forward. (It will also be
interesting to view this arrangement in
light of the recent initiative promoted
by the Federal government which
suggests that the TEPs that would
normally be lost by a State government
upon divestment of a public asset will
be retained, at least for a period – how
does that affect the economics for the
State when one compares divestment
versus the NSEI scenario?)
4. How will the instruments deal with
potential privatisation in the future
(which is just one element of change in
law protection)? Will investors expect
redemption or conversion terms upon
a change in Government policy that
allows for privatisation? If redemption,
what premium will attach to that: given
that the instrument is in the nature
of a long-term investment (rather
than a short term liquid facility) one
would expect a significant redemption
premium. Conversion (into ordinary
equity) would, on the other hand, seem
problematic from the perspective of
potential buyers of the business upon
privatisation: we might reasonably
think that the recent (December
2013) experience with the potential
divestment of Queensland Motorways
suggests that long term investors only
want the ability to acquire 100% of
infrastructure businesses.
5. Whether the NSEI will be freely
tradeable such that a secondary
market can develop will influence
whether the instruments are attractive
to infrastructure debt funds. How
easily will investors be able to exit?
Could the instruments be listed?
6. If NSEIs are issued to finance capital
expenditure, what happens when
further capex is required in the future?
Would new NSEIs be issued? That
would raise a multitude of complex
issues – for example, what drives the
decision (and how is it made) to fund
future capex from retained earning
versus further NSEI proceeds? Would
an NSEI holder have any say in further
issues of NSEIs? What happens if the
RAB is optimised (ie lowered) during a
regulatory period – will the new NSEI
investor get full benefit for their capital
expenditure injection?
7. That private sector debt will replace
Treasury funding will add another
complexity to the position of NSEI
holders, given that it is likely to be
FEBRUARY 2014
more expensive than T-Corp debt, and
will also likely include operational and
capital management covenants that
may confer a level of control on debt
holders which may not be available to
NSEI holders (or if they are, then intercreditor issues between debt and NSEI
holders will arise).
Many of the issues canvassed above can
be addressed if the economic terms of the
instruments are sufficiently attractive and
certain, in particular to address potential
concerns over control and influence. As
they say, the devil will be in the detail.
For further information, please contact:
ROBERT CLARKE
Partner, Melbourne
Tel +61 3 9672 3215
robert.clarke@corrs.com.au
THOMAS JONES
Partner, Sydney
Tel +61 2 9210 6750
thomas.jones@corrs.com.au
SARAH GODDEN
Senior Associate, Sydney
Tel +61 2 9210 6067
sarah.godden@corrs.com.au
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FEBRUARY 2014
THE THIN CAPITALISATION LANDSCAPE:
Reading the tea leaves
One of the key metrics underlying
the financial modelling of
infrastructure projects and
investment in them is the
extent to which interest paid to
financiers is tax deductible. The
after tax cost of finance will in
turn impact the return to equity
investors. The landscape for this
is about to change.
The Australian thin capitalisation rules
contained in Division 820 of the Income
Tax Assessment Act 1997 (Cth) (ITAA
1997) operate to deny debt deductions to
certain taxpayers to the extent that their
“adjusted average debt” exceeds their
“maximum allowable debt”.
A taxpayer’s maximum allowable debt is
determined by reference to the greater
of the “safe harbour debt amount” and
the “arm’s length debt amount” and, for
certain taxpayers, the “worldwide
gearing amount”.
of average Australian assets). The
proposed amendments are expected to
apply to income years commencing on
or after 1 July 2014.
Infrastructure projects can be highly
leveraged (particularly PPP projects with
a government backed revenue stream)
and some are geared in excess of the
safe harbour debt amount. However, for
those that are currently within the safe
harbour, it will be necessary to consider:
The “safe harbour” test
• Will the project’s current finance
structure result in excessive debt under
the new safe harbour debt amount?
On 6 November 2013, the current Coalition
government confirmed that it would
proceed with a number of announced, but
unlegislated, tax measures. One such
measure was the proposal announced by
the former Labor government as part of
the 2013/14 Federal Budget to amend the
thin capitalisation rules to reduce
the “safe harbour debt amount” from
the current 3:1 debt to equity ratio to
1.5:1 (ie a reduction from 75% to 60%
• If so, what hurdles are there to
restructuring the project’s financing
to come within the new safe harbour?
The proposed amendments as
announced do not contain any
grandfathering rules that would
allow the current debt to equity
ratios to continue to apply to existing
projects. It will be important to
consider whether debt facilities
already in place and spanning the
commencement of the new rules have
any in-built flexibility to accommodate
the changes (eg do they allow debt to
be prepaid without penalty from the
proceeds of an equity raising?).
• Is there scope to revalue a project’s
underlying Australian assets which may
result in an increased safe harbour
amount when using the new ratios?
• What is the risk of the income tax
general anti-avoidance provision
(GAAP) applying to any debt
restructure? In a National Tax Liaison
Group consultative workshop on
the recently amended GAAP, the
Australian Taxation Office (ATO) flagged
its view that the GAAP may apply in
such circumstances. However, the
fact that the reforms are yet to be
made may be a hurdle for the ATO.
For projects that already exceed the safe
harbour amount, or would be likely to do
so under the new ratio, it will be necessary
to consider whether recourse may be had
to the “arm’s length debt” test (ALDT).
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The “arm’s length debt” test
(ALDT)
Due to the high leverage of some
infrastructure projects, the ALDT is of
particular importance to the sector.
The ALDT is an alternative test and is
directed towards determining whether
the level of debt is commercially
justifiable having regard to the amount
that the entity would be reasonably
expected to have borrowed – and an
independent lender would have lent –
in the relevant circumstances, subject
to some modifications.
The previous government commissioned
a review of the ALDT by the Board of
Taxation and, on 16 December 2013, the
Board released a Discussion Paper in
this regard.
The Board’s review is focused on:
• How to reduce the compliance burden
for taxpayers when determining their
arm’s length debt amount.
• How to reduce the burden on the
ATO in administering the ALDT.
• Whether there should be restrictions
on eligibility to use the ALDT.
Measures to reduce the cost to
taxpayers in assessing their ability to
rely on the ALDT will be welcomed by
the infrastructure sector. Of particular
interest is the floating of a system of
advance thin capitalisation agreements
between a taxpayer and the ATO. There
is already a precedent in Australia for
such arrangements, namely advance
pricing arrangements for transfer
pricing purposes.
The Discussion Paper cites such
arrangements in the United Kingdom as
an example, but also notes that any such
proposal in Australia would need to be
weighed against the objective to reduce
the burden on the ATO in administering
the ALDT. In this regard, we note that
the UK thin capitalisation rules are a
subset of the transfer pricing regime
which may yield some efficiencies. Those
same efficiencies may not be available
in Australia as a consequence of there
being separate thin capitalisation and
transfer pricing regimes. The Discussion
Paper canvasses options to harmonise
the Australian transfer pricing and
thin capitalisation rules, but notes that
although the regimes are conceptually
similar in some respects, the policy and
functional differences are significant.
FEBRUARY 2014
Of much importance to the infrastructure
sector is the ongoing discussion regarding
any limitations on eligibility to apply
the ALDT. In framing the issues on
which the Board of Taxation is seeking
input, the discussion focuses on the
particular needs of significant projects
in the energy, infrastructure, transport,
resources, telecommunications and social
infrastructure sectors. The attention
given to such projects seems to suggest
that there is recognition at a policy level
that projects of social and/or economic
importance are more likely to need to rely
on the ALDT. As such, while this aspect
of the review needs to be monitored,
it may not end up having any negative
impact on the infrastructure sector.
Issue to watch – “Negative
control”
Submissions regarding the review of
the ALDT are due by 14 March 2014.
Stakeholders in the infrastructure sector
should consider making a submission to
the Board of Taxation either directly or
through participation in industry bodies.
“Negative control” is also relevant when
considering the application of other
Australian income tax rules. We will
explore the current thinking concerning
negative control in the infrastructure
sector in an upcoming edition of M&A
Infrastructure Insights.
The “worldwide gearing” test
For completeness, it should be noted that
changes are also proposed to extend the
scope of the worldwide gearing test, but
reduce the applicable ratio.
In an environment where equity investors
in infrastructure projects commonly
take minority interests, a contentious
issue that warrants consideration in the
context of the Australian thin capitalisation
rules is the concept of “negative control”,
sometimes referred to as “veto power”.
The issue may arise, for example, where
a non-resident minority investor has veto
powers in respect of decisions to be made
by the project vehicles. If those powers
are considered to give the non-resident
investor “control” over the project vehicles,
those vehicles may be subject to the
Australian thin capitalisation rules.
Where to from here?
The Australian thin capitalisation landscape
is clearly evolving rapidly. Stakeholders
in the infrastructure sector should:
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• Assess the impact, if any, of the
proposed amendments to the “safe
harbour debt” test on financial
modelling for investments in current
and future projects.
• Review current finance arrangements
to determine whether they are
flexible enough to make changes to
accommodate the new safe harbour
debt ratios.
• Consider making a submission to
the Board of Taxation emphasising
the importance of the ALDT to the
infrastructure sector.
FEBRUARY 2014
For further information, please contact:
REYNAH TANG
Partner, Melbourne
Tel + 61 3 9672 3535
reynah.tang@corrs.com.au
RHYS JEWELL
Special Counsel, Melbourne
Tel +61 3 9672 3455
rhys.jewell@corrs.com.au
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FEBRUARY 2014
PROTECTING LEASEHOLD INTERESTS FROM DISCLAIMER BY LIQUIDATORS:
Investors beware
The High Court’s recent Willmott
Forests decision potentially
has consequences for owners,
operators and acquirers of
infrastructure assets and their
financiers where land on which
the infrastructure assets are
wholly or partially located is the
subject of a lease or licence,
which is not conveyed under
statute, and the lessor company
goes into liquidation.
The decision relates to the liquidator’s
power to disclaim onerous property. While
the Corporations Act 2001 (Cth) allows a
liquidator to walk away from obligations
of the company pertaining to property
in order to ensure that the winding up
of the company’s affairs proceeds in a
prompt and orderly manner and in a way
that is beneficial to all of the company’s
creditors, prior to the Willmott Forests
decision, leases were not considered to be
“property” that could be disclaimed and
lessees on long-term leases had comfort
that their leases would be honoured even
if the lessor went into liquidation.
Now, liquidators of lessor companies may
contemplate disclaiming leases where
they believe they will realise a greater
return by selling property with vacant
possession and it is in the best interests
of creditors (as a whole) to do so. It also
makes leasehold interests in property less
attractive as security to financiers: as the
security may be worthless if the lessor
company goes into liquidation.
The impact of this decision is of
importance to owners/operators of
infrastructure assets that span a large
number of privately held properties over
which licence or leasehold rights have
been secured, such as gathering lines
that supply oil and gas pipelines or power
and signal cables utilised in wind farms
(rather than infrastructure assets held
within SPV lessor entities established by
the State which are insolvency remote).
Historically, neither owner/operators of
assets spanning multiple properties nor
their financiers would have undertaken a
credit analysis of the various entities that
may have granted leasehold interests to
facilitate construction of the asset, or to
permit ongoing access for maintenance
activities. This decision may necessitate
a change in this practice.
The facts
Willmott Forests Limited (receivers and
managers appointed) (in liquidation)
(WFL) was the manager of a number of
forestry managed investment schemes,
in which participants in the scheme
would lease land from WFL on which
trees would then be grown and harvested
on behalf of the participants under the
management of WFL.
In 2010, WFL was placed into external
administration. The liquidators
determined that it would not be viable
to continue to run the forestry schemes
and, together with the receivers and
managers, conducted a joint sale
campaign for the land. No potential
buyer was interested in acquiring the
land subject to the leases.
In order to effect a sale, the liquidators
applied to the Court for orders including
a declaration that they were entitled to
disclaim the leases between WFL and the
various growers. That order was opposed
by the growers and is the issue that was
ultimately before the High Court.
The Victorian Court of Appeal found that
the contract of lease was “property”
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that could be disclaimed and that it was
necessary to terminate the growers’
leasehold interests in order to release
WFL from its obligation to provide quiet
enjoyment of the land.
The power to disclaim
The liquidator’s power to disclaim onerous
property is a historic power intended to
aid the liquidator in the administration of
a winding up, and is found in section 568
of the Corporations Act. It provides that
a liquidator may disclaim certain types
of “property”, including:
• land burdened with onerous
covenants;
• property that is unsaleable or is not
readily saleable; and
• contracts.
The effect of the disclaimer is governed
by s 568D. It provides that the disclaimer
terminates the company’s rights,
interests, and liabilities in the disclaimed
property, but that it does not affect any
other persons rights or liabilities except
so far as is necessary to release the
company in liquidation from liability.
The issues before the high court
The decision
The issues before the High Court were
as follows:
The majority of the High Court (French CJ,
Hayne J and Kiefel J (Gageler J agreeing
in a separate judgment)) found that a
lease is a type of contract (to which the
ordinary principles of contract law apply)
and so there is no reason why a lease
cannot be disclaimed under s 568(1).
1 When a lessor company goes into
liquidation, do its liquidators have
the power to disclaim leases that the
company granted to a lessee?
2 If the answer to that question is yes,
what is the consequence of such a
disclaimer?
With respect to the first question, the
growers’ position was effectively that
the leases are not property of the
company for the purpose of s 568(1) and,
accordingly, that s 568 provides no power
for a liquidator to disclaim such property.
In contrast, the liquidators considered
that the leases were simply contracts
that were capable of disclaimer under
the s 568(1).
With respect to the second question, the
growers argued that even if the leases
could be disclaimed, the disclaimer
could not adversely affect the property
rights held by the growers in the leased
property because the grant of the lease
by WFL had created a proprietary interest
held in the relevant land.
Pursuant to s 568D(1), the effect of the
disclaimer of leases was to extinguish
WFL’s obligation to provide quiet
enjoyment of the leased property to
the growers, and any interest that the
growers may have had under the leases
could not survive the disclaimer.
Accordingly, the growers’ interest in the
leases was extinguished and, instead,
they were left to prove as unsecured
creditors in the winding up of WFL.
What can lessees do?
While the full ramifications of this
decision are yet to surface, the principal
defence that an infrastructure lessee is
likely to pursue is to apply to the Court
under s 568B for an order setting aside a
disclaimer on the basis that the prejudice
of the lessee (or its financiers) is grossly
out of proportion” to the prejudice that
setting aside the disclaimer would
cause to the company’s creditors.
FEBRUARY 2014
This is not a defence that is usually put
forward to a disclaimer of contract, and
the High Court provided no guidance on
what “grossly out of proportion” means
in this context. However, the following
points are likely to be relevant:
• The liquidator will ordinarily measure
the prejudice to be suffered by the
company’s creditors in terms of
direct financial disadvantage, as s
568B(3) requires a comparison of the
direct consequences of a disclaimer
versus setting aside of the disclaimer.
Accordingly, the lessee will need to
measure the potential prejudice that
they may suffer in terms of direct
financial loss in order that a proper
comparison be drawn.
• One consequence of the disclaimer
is that the lessee will become a
creditor of the lessor company. It is
possible that damage to the lessee –
particularly the owner/operator of an
asset like a pipeline or transmission
line – will be so significant as to mean
that the lessor company’s creditors
(taken as a whole) are no better off,
even if the liquidator is able to realise
a greater sum for the property.
• If the company has no creditors, the
potential prejudice to the lessee (or
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its financiers) need not be great in
order to set aside the disclaimer. As
a practical matter, this means that
placing a solvent lessor into members
voluntary liquidation and using the
disclaimer power as a commercial
strategy to negotiate a better deal is
unlikely to be successful.
Ultimately the Willmott Forests decision
casts doubt on the leasehold rights
of lessee companies and while it may
be considered to be a storm in a tea
cup where the rights have statutory
protection (such as a pipeline licence
granted under the Petroleum & Gas
(Production and Safety) Act 2004 (Qld)
), the impact could be vastly different
if the infrastructure is not regarded as
critical or has no legislative protection.
In those instances the defence outlined
by the High Court will be crucial to avoid
disruption and delay that will ultimately
have an economic impact on the asset.
An alternative response to the decision
may be statutory intervention (in much
the same way as licences have in certain
instances become statutory rights) to
determine that leasehold rights (either
generally or in certain instances) are
real rights and so escape the right of
disclaimer by the liquidator.
FEBRUARY 2014
For further information, please contact:
CLARE CORKE
Partner, Melbourne
Tel + 61 3 9672 3255
clare.corke@corrs.com.au
JEREMY KING
Partner, Melbourne
Tel +61 3 9672 3431
Jeremy.king@corrs.com.au
JOHN STRAGALINOS
Partner, Melbourne
Tel +61 3 9672 3238
john.stragalinos@corrs.com.au
Page 10
AUSTRALIAN
M&A INFRASTRUCTURE INSIGHTS
FEBRUARY 2014
OUR PRACTICE
Corrs’ infrastructure practice
group has a long history of acting
on Australia’s most significant
and complex infrastructure
transactions. Our group is
sector focussed, covering all
legal disciplines in relation to the
development of, and investment,
in all forms of Australian
economic, industrial and social
infrastructure.
MEET OUR TEAM:
In each edition, we will feature several of our experts.
IPT&C:
THOMAS
JONES
Thomas specialises in advisory and
dispute resolution work relating to
access to regulated infrastructure
across a range of industries including
telecommunications, airports, ports,
rail, broadcasting and water. He has
particular expertise in third party access
issues and advises clients on competition
law and the administrative law aspects
of the operation of regulatory regimes.
As key regulatory advisor to major
infrastructure players Thomas knows
how to navigate the regulatory minefield.
TAXATION:
REYNAH
TANG
Over the last 18 years, Reynah has
advised financiers, sponsors and
government on the tax issues for a wide
range of infrastructure projects and
assets including rail, light rail, water,
roads, airports, schools, electricity
and other social infrastructure. His
commercial sensibility, government
insight and extensive experience in the
infrastructure sector have assisted
clients navigate complex tax issues
surrounding multi-billion dollar deals
and projects.
BANKING & FINANCE:
ROMMEL
HARDINGFARRENBERG
Rommel’s primary areas of expertise
are project and infrastructure finance,
with a focus on energy, transport and
resources. His clients include sponsors,
financial institutions and government
bodies. Currently, Rommel is involved
in a number of infrastructure projects
including electricity, rolling stock and rail
and social infrastructure.
© Corrs Chambers Westgarth, 2014
This publication does not constitute legal advice and should not be relied on as such. You should seek individualised
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Page 11