Walter Baden advises RSK on acquisition of a majority stake in Adenco

Walter Baden congratulates RSK Environment Australia on acquiring a majority stake in Adenco, a Western Australian-based operator in the resources and construction industries. Adenco specialises in mine site dewatering, water management and civil engineering services.

RSK Environment Australia is the Australian holding company for UK-headquartered RSK Group Limited, a global leader in sustainable solutions in the environmental, engineering and technical services fields.

Walter Baden led legal due diligence and legal aspects of buy-side deal execution on the project alongside RSK’s local and UK in-house M&A teams, financial advisers BDO and tax advisers Pitcher Partners.

This is Walter Baden’s fifth deal for RSK, having previously acted on its earlier acquisitions of EDP Consultants, Western Project Services, SJA Construction Services and Projence.

Walter Baden advises RSK on the acquisition of Projence

Walter Baden congratulates RSK Environment Australia on its acquisition of all the shares in Projence, a NSW-based integrated project management firm.

RSK Environment Australia is the Australian holding company for RSK Group Limited, a global leader in sustainable solutions in the environmental, engineering and technical services field.

Walter Baden is delighted to have assisted with legal due diligence and buy-side deal execution on the project alongside RSK’s local and UK in-house M&A teams.

Walter Baden advises RSK on the acquisition of SJA Construction Services

Walter Baden is pleased to have advised RSK Environmental Australia on its acquisition of all the shares in SJA Construction Services, a leading provider of expert and advisory services, planning and programming, project management and quantity surveying in the construction industry.

RSK Environment Australia is the Australian holding company for UK-headquartered RSK Group Limited, a global leader in sustainable solutions in the environmental, engineering and technical services field.

Walter Baden led legal due diligence and buy-side deal execution on the project alongside RSK’s local and UK in-house M&A teams and financial and tax advisers, Pitcher Partners.

This is our third deal for RSK, having earlier acted on the acquisitions of EDP Consultants and Western Project Services.

Director Identification Numbers – modernising business registers

From today, directors and any person intending to become a director of an Australian company  need to apply for a director identification number (DIN). This number is unique to each individual and will remain with a person, even if they cease to be a director.

Overview

DINs are being phased in over 18 months. Any director appointed on or before 31 October 2021 has until 30 November 2022 to apply for a DIN. Any director appointed from today until 4 April 2022, will need to apply for a DIN within 28 days of signing their consent to act as a director. And any director appointed from 5 April 2022 will need to apply for a DIN prior to being appointed as a director.

For verification reasons directors will need to apply for their own DIN; no one else can apply on their behalf.

Implications

Currently, a director must provide a company with their full name, residential address, date of birth, place of birth and any former names prior to their appointment as a director. These details are also recorded on and are publicly available via the ASIC register, although ASIC has not historically verified these details.

The primary purpose of the introduction of DINs is to provide better traceability of a director’s involvement across companies, allowing directors of failed companies to be more readily tracked and reducing the potential use of fictitious identities.

DINs are also intended to have efficiency benefits although we can see timing and logistical challenges in M&A and foreign inbound investment contexts where incoming directors do not already hold a DIN due to the verification requirements. It will be important that DIN applications are made well in advance of closing, particularly for proposed directors that do not hold Australian identity documents.

It is important that directors are aware of their obligation to apply for a DIN within the relevant timeframe as a failure to do so may result in civil or criminal penalties.

Looking forward

The introduction of DINs is just the first of many steps designed to modernise business registers in Australia. Eventually over 30 ASIC registers and the current Australian Business Register will be combined into a single system.

WB welcomes all changes that have the effect of modernising corporate law in Australia. If you have any questions on DINs, please don’t hesitate to reach out to us. For those with Australian identity documents, the director ID application is available at abrs.gov.au. Please keep in mind that overseas based directors will need to apply using a paper-based application, which should be factored into deal timetables where applicable.

Is a trustee company an ultimate holding company for the purposes of the Corporations Act?

A company is an ultimate holding company if it has a subsidiary but is itself not a subsidiary i.e. it is the top company in a group of companies.

The Corporations Act provides that a company, let’s call this company “S”, will be a subsidiary of another company, let’s call this one “H”, if H:

• controls the composition of the board of S
• is able to cast, or control the casting of, the majority of votes able to be cast at a general meeting of S, or
• holds more than one half of the issued share capital of S.

S would also be considered a subsidiary of H if S was a subsidiary of another company that was a subsidiary of H.

On its face, where a trustee company holds 100% of the shares in another company, and the trustee company itself is not a subsidiary of another company, a trustee company meets this test and is an ultimate holding company.

However, section 48 of the Corporations Act says that this is not the case. Section 48(2) provides that any shares held, or power exercisable, by a company in a fiduciary capacity (e.g. as a trustee or nominee) are not treated as being held or exercisable by it for the purposes of determining if a company is a subsidiary of it.

This question often arises in the context of determining whether a newly incorporated company with a sole shareholder that is a trustee company has an ultimate holding company. The answer is it does not.

Section 48 also has the effect that a trustee company is not a a holding company for the purpose of financial assistance approvals, saving a number of resolutions and ASIC notifications that might otherwise be required if it were.

WB

This post is current at the date of publication. It is general in nature, does not constitute legal advice and should not be relied upon as legal advice. You should always obtain legal advice based on your specific circumstances before taking any action relating to matters covered by this post.