FEDERAL COURT OF AUSTRALIA

Parbery, in the matter of NewSat Limited (Administrators Appointed) (Receivers and Managers Appointed) [2015] FCA 435

IN THE MATTER OF NEWSAT LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 003 237 303) AND THE OTHER COMPANIES LISTED IN THE SCHEDULE

THE COURT ORDERS THAT:

1.    Pursuant to section 439A(6) of the Corporations Act 2001 (Cth) (Act), the period within which the Administrators of the Second Plaintiffs must convene meetings of creditors of the Second Plaintiffs under section 439A of the Act be extended up to midnight on 31 July 2015.

2.    Pursuant to section 447A(1) of the Act, Part 5.3A of the Act is to have effect in relation to each of the Second Plaintiffs such that the meetings of the creditors of each of the Second Plaintiffs required by section 439A of the Act may be held at any time during the period up to, or within 5 business days after, the end of the convening period as extended by order 1, notwithstanding the provisions of section 439A(2) of the Act.

3.    The costs and expenses of this application be costs and expenses in the administrations of each of the Second Plaintiffs.

4.    Notice of orders 1 to 3 and order 5 be made available on the First Plaintiffs' website and through such other reasonable notification means as determined by the First Plaintiffs.

5.    Liberty to apply on at least two days' written notice to the Plaintiffs be granted to any person, including any creditor of the Second Plaintiffs or the Australian Securities and Investments Commission, who can demonstrate a sufficient interest to modify or discharge these orders.

6.    Liberty to apply be granted to the First Plaintiffs in relation to any further extension of the convening period or any other matter arising in the administrations of the Second Plaintiffs generally.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE MATTER OF NEWSAT LIMITED (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 003 237 303) AND THE OTHER COMPANIES LISTED IN THE SCHEDULE

REASONS FOR JUDGMENT

1    The first plaintiffs, Mr Marcus Ayres and Mr Stephen Parbery, are the joint and several administrators of the second plaintiffs, being NewSat Limited (Administrators Appointed) (Receivers and Managers Appointed) (NewSat) and six other companies (the NewSat Australian Companies). The application before me seeks an extension of the convening period of the second meetings of creditors of each of the NewSat Australian Companies to 31 July 2015, pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (the Act).

2    NewSat is a publicly listed company on the ASX and is the ultimate holding company of the NewSat Group. The NewSat Australian Companies comprise seven of the ten companies that make up the NewSat Group. In addition to the NewSat Australian Companies, there are three others companies:

(a)    NewSat America Inc, a company incorporated in Delaware, in the United States of America;

(b)    NewSat (Cyprus) Ltd, a company incorporated in Cyprus; and

(c)    NewSat Pte Ltd, a company incorporated in Singapore.

3    Mr Parbery and Mr Ayres are partners of PPB Advisory, a professional services firm specialising in corporate recovery, restructuring and insolvency.

4    On 16 April 2015, Mr Parbery and Mr Ayres were appointed by Citicorp International Limited, the security trustee of the “Jabiru Australian Collateral Trust” (the security trustee), under s 436C of the Act as administrators of NewSat and the other NewSat Australian Companies.

5    Also on 16 April 2015, Mr Jason Preston and Mr Matthew Caddy of McGrathNicol were appointed by the security trustee as receivers and managers to each of the NewSat Australian Companies (the receivers).

6    The plaintiffs have applied for the following orders:

(a)    Pursuant to s 439A(6) of the Act, that the convening period defined in s 439A(5)(b) in respect of each of the second plaintiffs be extended to midnight on 31 July 2015; and

(b)    Pursuant to s 447A(1), that Pt 5.3A of the Act is to operate in relation to each of the second plaintiffs as if the second meetings of the creditors of each of the second plaintiffs required by s 439A of the Act may be held at any time during, or within five business days after, the end of the convening period as extended by paragraph (a), notwithstanding the provisions of s 439A(2) of the Act.

7    The NewSat Group is the owner of a partially completed communication satellite known as Jabiru-1. Apparently, if the NewSat Group is not recapitalised through the administration or otherwise revitalised by the receivership procedures, there is a real risk that the incomplete Jabiru-1 satellite project will not be completed and the pre-launch customer contracts secured to date and worth approximately $644 million may be lost. This would cause substantial loss of value to both creditors and other stakeholders of the NewSat Group.

8    The plaintiffs have applied to extend the convening period under s 439A(6) of the Act in order to allow sufficient time to investigate and preserve the option of pursuing a deed or deeds of company arrangement to give effect to an appropriate reorganisation plan.

The Newsat Group and the background to administration

9    The NewSat Group’s business was founded in 1987 as a multimedia business.

10    Its business evolved to offer satellite solutions to deliver internet, voice data and video connectivity to a range of government and private clients in remote locations. Its customers are located in Australia, Asia, Europe, the Middle East, Africa and the United States of America.

11    The NewSat Group has access to approximately 14 third-party satellites, which offer satellite capacity services covering approximately 75% of the Earth’s surface.

12    Additionally, the NewSat Group has commenced the “Jabiru Satellite Program” to develop its own satellite services. By pursuing the Jabiru Satellite Program, the NewSat Group has adopted a strategy of expanding from being a teleport operator, reselling satellite capacity, to an owner and operator of its own communication satellites. At the date of the appointment of the administrators, the Jabiru Satellite Program comprised two projects.

Jabiru-2

13    In 2001, the NewSat Group acquired orbital slots in what is known as “Jabiru-2”. By that acquisition, the NewSat Group essentially leased “space” on the Jabiru-2 satellite operated by a third party.

14    Jabiru-2 launched in September 2014 on the MEASAT 3-b satellite. Jabiru-2 provides connectivity to telecommunication services across Australia, East Timor, Papua New Guinea and the Solomon Islands.

Jabiru-1

15    Jabiru-1 is NewSat’s own satellite and is currently being built by Lockheed Martin Corporation (Lockheed Martin) in Denver, Colorado, with the goal of launching in May 2016.

16    If completed and launched, Jabiru-1 will be Australia’s first Ka-band satellite, and is intended to provide new capacity to meet growing demand for telecommunication services in the Middle East, Asia and Africa.

17    Pursuant to contractual arrangements, it is intended that Jabiru-1 be launched by Arianespace S.A. (Arianespace), a French company, on the same launch vehicle as Jabiru-2. That launch vehicle has had over 60 consecutive successful launches.

Key Agreements in respect of the Jabiru-1 project

18    NewSat and Jabiru Satellite Ltd (one of the other NewSat Australian Companies) are parties to a contract dated 8 December 2011 with Lockheed Martin for the construction and delivery of Jabiru-1 (the Construction Contract). The total cost under the Construction Contract for the construction of the Jabiru-1 satellite is $266.6 million. As at the date of the administrators’ appointment, $170 million of the construction cost had been paid to Lockheed Martin. Construction of the Jabiru-1 satellite pursuant to the Construction Contract is incomplete.

19    The second key agreement in respect of the Jabiru-1 satellite is a Launch Services Agreement dated 8 December 2011 between NewSat and Arianespace, for the launch of the Jabiru-1 satellite once constructed (the Launch Services Agreement). The total cost under the Launch Services Agreement is $115.5 million.

20    The third key agreements are known as the “MEASAT Agreements”. Under the MEASAT Agreements, NewSat and MEASAT Satellite Systems Sdn Bhd (MEASAT), a Malaysian company, agreed that:

(a)    Jabiru Satellite Ltd would sell the MEASAT-3c payload (which is part of Jabiru-1 capability) to MEASAT;

(b)    MEASAT would provide tracking, command and ranging operational services for Jabiru-1; and

(c)    MEASAT would grant Jabiru Satellite Ltd the exclusive right to use its radio frequency network at MEASAT’s orbital slot.

21    The NewSat Group has also entered into a number of contracts with key customers to provide satellite capacity for Jabiru-1 (Customer Contracts). These include contracts with TrustComm Inc, Quick Link Communications, Ramin General Trading & Contracting Co, Shree Bhuvaneshwari Infra Holdings Pvt Ltd and 3A Technologies.

Debt facilities

Financing of the Jabiru-1 satellite

22    The NewSat Group took out three key finance facilities to fund the Jabiru-1 project.

23    Jabiru Satellite Ltd is the borrower under each of the three facilities, and its obligations are guaranteed by other entities in the NewSat Group.

24    The first facility is known as the “COFACE Facility Agreement” and is dated 4 July 2013 (the COFACE Facility). Under the COFACE Facility, Société Générale S.A., Credit Suisse (Luxembourg) S.A. and Standard Chartered Bank (COFACE lenders) agreed to commit a total of US$89.6 million to Jabiru Satellite Ltd to finance the purchase of French goods and services, principally including the launch vehicle-related costs for Jabiru-1 and the launch services provided by Arianespace. Compagnie Française d’Assurance pour le Commerce Extérieur (COFACE), the French export credit agency, is the guarantor under the COFACE Facility. As at the date of the administrators’ appointment, approximately US$26 million had been advanced by the COFACE lenders under the COFACE Facility.

25    The second facility is known as the “Reserve Facility Agreement” and is dated 4 July 2013 (the Reserve Facility Agreement). Under the Reserve Facility Agreement, Standard Chartered Bank agreed to commit a total of $25 million to Jabiru Satellite Ltd to pay miscellaneous Jabiru-1 project costs as they might arise. As at the date of the administrators’ appointment, no funds had been advanced under the Reserve Facility Agreement.

26    The third facility is referred to as the “First Amended and Restated Credit Agreement” and is dated 14 January 2014 (the Credit Agreement). Under the Credit Agreement, the Export-Import Bank of the United States agreed to commit a total of $300.5 million to Jabiru Satellite Ltd to finance the purchase of goods and services in the United States, principally including the construction of Jabiru-1 by Lockheed Martin. As at the date of the administrators’ appointment, approximately $140 million had been advanced by the Export-Import Bank of the United States under the Credit Agreement.

General security deed

27    The administrators were appointed by the security trustee. The security trustee is the trustee under General Security Deeds dated 4 July 2013, pursuant to which each of the NewSat Australian Companies pledged all or substantially all of their assets, including, where applicable, all shares held in other entities in the NewSat Group in favour of the security trustee, in order to secure the obligations under the finance facilities referred to above.

28    Under an Amended and Restated Intercreditor Deed dated 24 January 2014 (Intercreditor Deed), the security trustee is bound to only pursue enforcement actions against the NewSat Group at the direction of Deutsche Bank Trust Company Americas (the Intercreditor Agent), acting on behalf of, and on the instruction of, the secured creditors.

Circumstances leading to the administrators’ appointment

29    From mid-2014, NewSat experienced financial difficulties. NewSat Group’s lenders alleged it was in breach of its loan covenants. NewSat also experienced cost overruns in relation to the construction of the Jabiru-1 satellite. The lenders under the COFACE Facility and the Credit Agreement (the Lenders) resolved to exercise their rights to stop further advances under the COFACE Facility and the Credit Agreement. As a consequence, the NewSat Group was not able to raise enough new capital, and faced liquidity problems.

30    On 25 August 2014, the Lenders agreed to a conditional waiver of their rights under the COFACE Facility and the Credit Agreement to withhold further advances, and conditionally agreed to continue funding the Jabiru-1 satellite. The conditions of the waiver included that the NewSat Group raise equity or mezzanine financing of at least $20 million prior to 30 September 2014, and, in total, at least $40 million prior to 30 November 2014. The Lenders also imposed a number of conditions regarding governance of the NewSat Group.

31    The NewSat Group did not meet those conditions. Consequently, on 16 April 2015, the security trustee appointed the administrators as administrators of the NewSat Australian Companies pursuant to s 436C(1) of the Act, relying on the following events of default:

(a)    failure to make payment of amounts due and owing under the Credit Agreement;

(b)    failure to comply with certain covenants in the Credit Agreement; and

(c)    failure to make payments under the Construction Contract and the Launch Services Agreement,

(together the Defaults).

32    Further, on 16 April 2015, on the basis of the Defaults, the receivers were appointed to the assets and businesses of NewSat and the other NewSat Australian Companies.

Status of key contracts

33    As a result of the financial difficulties experienced in 2014, the NewSat Group failed to make payments on time under the Construction Contract and Launch Services Agreement, thereby jeopardising those key contracts and the completion of the Jabiru-1 project.

Lockheed Martin default and termination notices

34    On 16 December 2014, Lockheed Martin issued a default notice in respect of alleged overdue payments under the Construction Contract (the Default Notice).

35    On 22 January 2015, following expiration of the cure period specified in the Default Notice, Lockheed Martin issued a notice stating its intent to cease construction of the Jabiru-1 satellite pursuant to the Construction Contract (the Termination Notice).

36    In the context of urgent proceedings in the United States Bankruptcy Court discussed later, Lockheed Martin has agreed to refrain from terminating the Construction Contract until 18 May 2015 and will continue to work on the Jabiru-1 project, provided that:

(a)    all costs incurred for such work between now and 18 May 2015 rank as post-appointment expenses of the receivership; and

(b)    the receivers make a decision to assume or reject the Construction Contract by 18 May 2015 (the language of “assume” or “reject” is used in s 365 of the US Bankruptcy Code (Title 11 of the United States Code)).

Arianespace default and termination notices

37    On 25 February 2015, Arianespace issued a default notice in respect of alleged overdue payments under the Launch Services Agreement, totalling $42 million.

38    On 3 April 2015, Arianespace issued a termination notice stating its intent to terminate the Launch Services Agreement (the Arianespace Termination Notice). The Arianespace Termination Notice allowed Arianespace to terminate the Launch Services Agreement from 3 May 2015.

39    The administrators have obtained temporary restraining orders in the United States recognition proceeding discussed later to preserve the Launch Services Agreement whilst efforts are made to reorganise the NewSat Group’s funding structure to enable the Jabiru-1 project to be completed.

40    Arianespace has now also agreed to a temporary standstill arrangement in relation to the Launch Services Agreement until 28 May 2015.

The administration

41    The administrators have only recently commenced investigating the business assets and management of the NewSat Australian Companies prior to their appointment. Despite these preliminary investigations having been commenced, the focus of their limited resources to date has been towards preserving the status quo to clear the way for a restructure plan.

42    Generally, the administrators’ investigations into the affairs of NewSat and the other Australian NewSat Companies are still at a preliminary stage having regard to:

(a)    the complexity of the NewSat Group’s business and affairs;

(b)    the urgent steps the administrators and the receivers have had to take since their appointments to stabilise and preserve the critical contractual arrangements with respect to the incomplete Jabiru-1 project, including obtaining urgent recognition and restraining orders in the United States;

(c)    the receivers being in control of NewSat’s and the other NewSat Australian Companies’ business and assets and requiring access to books and records; and

(d)    the need for the receivers and the administrators to prioritise identifying and negotiating with parties interested in potentially restructuring the NewSat Group’s funding arrangements;

43    The administrators estimate that they require seven weeks to complete their investigations for the purposes of reporting to creditors under s 439A(4) of the Act.

44    As indicated above, upon the administrators’ appointment, they were concerned that the key contracts associated with the Jabiru-1 project not be prematurely terminated on the basis of an insolvency event. In particular, they were concerned to keep the Construction Contract and the Launch Services Agreement intact to preserve value for the benefit of all creditors and stakeholders of NewSat and the other NewSat Australian Companies.

45    In those circumstances, immediately following their appointment, on 16 April 2015 (Eastern Time Zone), an application was made to the United States Bankruptcy Court in Delaware under which the administrators sought recognition in the United States of the administrations of NewSat and the other Australian NewSat Companies as “foreign main proceedings” under Chapter 15 of the US Bankruptcy Code and that certain sections of the US Bankruptcy Code apply to the NewSat entities under administration. The applicable provisions of the US Bankruptcy Code include s 365, which protects a distressed company’s contracts by preventing termination based solely on financial condition, bankruptcy filings or insolvency events, thereby preserving the opportunity for the distressed company to continue as a going concern.

46    On 16 April 2015, the United States Bankruptcy Court for the District of Delaware made a temporary restraining order which, among other things, provided that in relation to contracts that had not been terminated, all relevant persons and entities were enjoined from taking any action to terminate or modify any executory contract or unexpired lease.

47    Following the urgent hearing in the United States Bankruptcy Court on 16 April 2015, Arianespace and Lockheed Martin filed objections to the administrators’ application for an injunction to restrain the termination of the Construction Contract and the Launch Services Agreement.

48    On 1 May 2015, the United States Bankruptcy Court heard the administrators’ motion for provisional relief to restrain the termination of the Construction Contract and the Launch Services Agreement. However, prior to the hearing on 1 May 2015 the Lockheed Martin objections were compromised on the basis that Lockheed Martin would not terminate and would continue to perform the Construction Contract until 18 May 2015.

49    The United States Bankruptcy Court otherwise ordered that the automatic stay apply in respect of the administrations of NewSat and the other NewSat Australian Companies, but that third parties (such as Arianespace) to contracts with the NewSat Australian Companies were not obliged to take any steps in performance of their contracts.

50    As set out earlier, Jabiru Satellite Limited has since been informed that Arianespace has also agreed to a standstill arrangement until 28 May 2015.

51    The receivers are presently pursuing discussions and negotiations with interested parties regarding the potential restructuring of the NewSat Group’s financial arrangements in order to preserve the value of the incomplete Jabiru-1 project.

52    It is possible that a restructure may take place through deeds of company arrangement. In addition, there is also the possibility that what has been described by Mr Ayres of “holding” deeds of company arrangement may be proposed in the near future, to preserve the relevant options.

53    The administrators consider that it is in the best interests of the creditors of NewSat and the other NewSat Australian Companies that the convening period be extended in order to preserve and protect the status quo with respect to the relevant contractual arrangements in place for the completion and delivery of the Jabiru-1 project.

54    Pursuant to s 439A(2) of the Act, the administrators are required to convene second meetings of creditors of each of the NewSat Australian Companies by issuing notices to creditors at a time prior to the expiry of the period ending on 18 May 2015, which is the date that is presently agreed with Lockheed Martin to come to an agreement concerning the future of the Construction Contract.

55    Further, there is a significant risk that if the administrators are required to hold the second creditors' meetings within the current applicable statutory time frame, the negotiations to recapitalise the NewSat Group will be jeopardised.

56    In order to preserve the possibility of those negotiations resulting in a deal that could allow the Construction Contract and Launch Services Agreement to proceed with the Jabiru-1 project completed and the NewSat Group’s business continuing as a going concern, the administrators have formed the view that it is in the best interests of creditors to seek an extension of the convening periods in relation to NewSat and the other NewSat Australian Companies until 31 July 2015.

57    The lenders are secured creditors of NewSat Group and are owed in excess of $169 million. The receivers have been appointed to realise the lenders' security. I have been informed that the secured creditors and the receivers support the present application.

Relevant principles

58    The Court has jurisdiction to order the extension of the convening period under s 439A(6) and s 447A of the Act. In exercising this jurisdiction, the Court must have regard to the objects of Pt 5.3A, which seek to maximise the chance of the company under administration or as much as possible of its business continuing in existence, or if that is not possible, to achieve a better return for the company’s creditors and members than would result from an immediate winding up.

59    The power to extend the time for convening the second meeting of creditors should be not exercised lightly or as of course. But this is not to suggest that juridical parsimony is paramount. Rather, Pt 5.3A should be given a commercial construction and application which reflects the reality of the setting in which both the company under administration and the administrator find themselves. The Court must balance the expectation that administration will be a relatively speedy and summary matter against the consideration that undue speed should not be allowed to prejudice constructive commercial actions directed to maximising the return for creditors and potential return to shareholders. The lens to be used to assess that balance should not be so narrow that it focuses merely on some scholastic analysis of the text applied from the usually pessimistic perspective of an insolvency practitioner. After all, a potential outcome of Pt 5.3A may be a restructuring or a trade out which enables the company under administration and its activities to continue to the benefit of creditors and all stake-holders. The Court must be commercially astute to facilitating such a potentially positive outcome where it is feasible. The first step in that process is usually the consideration of an application of the present type.

60    In the present context, the ambit and complexity of the task faced by an administrator having regard to the circumstances of the company under administration is central to whether and for what period the Court should exercise its discretion to extend the convening period.

61    An administrator is required to provide to creditors, with the notice of the second meeting, a report about the company’s business, property, affairs, and financial circumstances (s 439A(4)). The administrator must also provide a statement of his opinion as to whether it would be in the creditors’ interests for the company to execute a deed of company arrangement, or for the administration to end, or for the company to be wound up. The statement must also provide the administrator’s reasons for that opinion and any other information which is known to the administrator and would enable the creditors to make an informed decision amongst the available alternatives. If a deed of company arrangement is proposed, the statement must set out details of the proposed deed. In order for an administrator to carry out his functions properly, it is necessary that he should have sufficient time to investigate the affairs of the company under administration and to provide relevant commercial information and advice to the creditors (see Farrell J’s discussion in In the matter of Harrisons Pharmacy Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2013] FCA 458 at [9] to [13]). The essential issue is whether the extension is necessary to enable the administrator to arrive at an opinion so as to place creditors in the position to choose between the relevant alternatives.

62    Generally, where there is evidence of complexity in the administration of a company’s or a group’s affairs, there is no room for any predisposition against extension.

63    The factors justifying an extension include:

    whether there is a lack of any or timely access to financial or other business records;

    the level of co-operation of the company’s officers or employees in providing useful and timely information to the administrator to facilitate his investigations;

    the size and scope of the business of the company or the group (as the case may be);

    whether there are substantial international activities;

    whether there are a large number of employees with complex statutory and other entitlements relating to rights of redundancy payments, annual leave, long service leave and the like;

    whether one is dealing with a complex group structure including significant inter-company loans;

    whether there have been complex transactions entered into by the company or the group;

    the time needed to effect an orderly process for the disposal of assets in a manner sufficient to maximise the return to creditors;

    the time needed for a thorough assessment of a proposal for a deed of company arrangement to enable the company to trade out or to restructure its affairs;

    whether any extension would maximise the chances of the sale of the relevant business as a going concern;

    the number in quantity, value and type (secured and unsecured) of the creditors and the level of complexity in any securitisation or sub-ordination arrangements;

    if receivers have been or may be appointed, any additional complexity involved in the timing and relationship of such receivers’ activities as it affects the administration and the options available to the company under administration;

    if a group is involved, the investigation of the desirability or appropriateness of “pooling” assets and creditors’ claims;

    if a group is involved, the investigation of the desirability or appropriateness of one or more deeds of company arrangement;

    whether there are any unusual substantial transactions that warrant further investigation in order for the administrator to properly advise creditors concerning potential recovery or other action; and

    more generally, whether additional time is likely to enhance the return for creditors.

See a discussion of many of these factors by Austin J in Re Riviera Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (2009) 72 ACSR 352 at [13].

64    Where a substantial issue arises in any one or more of these categories, an extension is readily justified.

Extension is justified

65    As I have said, it must be recognised that there is a balance to be struck between the administration being a relatively speedy and summary affair on the one hand, and the countervailing consideration, which is significant in this case, that undue speed should not be permitted to prejudice sensible and constructive commercial actions having the objective of maximising the return for creditors and potentially shareholders.

66    I should also say that in the present case, there is no evidence of any prejudice that might arise to any interested party were the extension to be granted. Further, no objection to the extension has been raised with the administrators by any person having a sufficient interest in so objecting.

67    In my view, there are ample reasons to justify the extension which has been applied for.

68    First, as has been submitted to me by Mr Leon Zwier, counsel for the administrators, the business, property, and affairs of the NewSat Group are complex and involve:

(a)    a large corporate group with the ultimate holding company being a listed company;

(b)    contractual arrangements with various stakeholders in a number of overseas jurisdictions being in a “precarious state”;

(c)    complex financial and security arrangements; and

(d)    complex technology involving satellite communications.

69    It is well apparent to me that the administrators need additional time to investigate and understand the NewSat Group’s assets and contractual position and also their financial arrangements. The administrators need further time in order to be able to discharge their statutory obligations to form the requisite opinion required under s 439A of the Act and to meaningfully report to creditors as to their opinion and its foundation.

70    Second, the extension is necessary to allow the administrators and receivers sufficient time to pursue the process of identifying potential investors to enable the NewSat Group to be restructured or recapitalised with the option of utilising a deed(s) of company arrangement to achieve that outcome.

71    The requested extension of the convening period will maintain the required optionality in terms of the appropriate form of any sale or restructuring arrangement, particularly one that may be facilitated through a deed(s) of company arrangement.

72    Third, the fact that the NewSat Australian Companies have substantial international activities, particularly in relation to the construction of the Jabiru-1 satellite by Lockheed Martin in the United States, is also a significant factor in favour of granting the present application. The affidavit of Mr Ayres sets out that significant time and attention has been devoted by the administrators and receivers to stabilising and preserving important contractual arrangements in the United States, including making the necessary recognition application and other applications for necessary temporary restraining orders in the United States Bankruptcy Court. There is also the need to continue to preserve and protect the status quo in relation to such arrangements as I have previously discussed.

73    Fourth, the second plaintiffs are presently under the control of receivers who will benefit from the continuation of the statutory moratorium to assist in allowing a going concern sale or potential reorganisation.

74    Fifth, the secured creditors have indicated that they support the extension of the convening period.

75    Sixth, I have also been informed that the administrators have also put Arianespace and Lockheed Martin on notice of this application, who have no objection thereto.

76    Finally, the administrators have sought a “Daisytek order”, the nature and basis for which has been explained by Lindgren J in Re Daisytek Australia Pty Ltd (Administrators Appointed) (2003) 45 ACSR 446 at [10] to [14]. Such an order allows the administrators to hold the second meeting of creditors for each of the second plaintiffs at any time during the extended convening period or within five days of its conclusion. This allows for the possibility that if a restructuring can be completed earlier than anticipated, then the administrators could hold the second meetings of creditors of the NewSat Australian Companies more promptly. I am satisfied that such an order is appropriate in this case.

77    Generally, I am satisfied that the orders sought should be made. The orders:

(a)    will enhance the prospect of NewSat Group’s business continuing as a going concern; and

(b)    will maximise the return to the creditors of each of the NewSat Australian Companies by preserving relevant options to restructure the NewSat Group and/or the relevant contractual arrangements to enable the Jabiru-1 satellite project to be completed.

Associate:

Dated:    11 May 2015

Schedule

1.    NewSat Limited (Administrators Appointed) (Receivers and Managers Appointed)

(ACN 003 237 303)

2.    NSN Holdings Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (ACN 105 253 263)

3.    NewSat Services Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (ACN 076 118 708)

4.    Jabiru Satellite Holdings Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (ACN 162 147 800)

5.    NewSat Space Resources Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (ACN 164 219 943)

6.    NewSat Networks Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (ACN 078 204 994)

7.    Jabiru Satellite Limited (Administrators Appointed) (Receivers and Managers Appointed) (ACN 121 667 365)