An Australian court of appeal has overturned an earlier decision and approved CSR’s bid to ask its shareholders to approve the spin-off its sugar business.
The appeals court found that the original judgement to block the demerger had contained a number of legal errors, CSR said.
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The court decision to block the spin-off was primarily based on whether the demerged entity would have sufficient capital resources to meet its obligations to creditors and cover asbestos-related liabilities.
“The prospect that the reduction in capital associated with the demerger of CSR may materially prejudice the ability of new CSR to pay all its creditors, including asbestos claimants, is not so clear as to warrant the conclusion that the scheme could never be approved,” the latest court judgement concluded.
While CSR has won the right to put its proposals to its shareholders, the court did not rule out future court action over funding issues.
CSR has said that it is considering spinning-off its sugar unit into an independent publicly traded company but the conglomerate is also engaged in talks with China’s Bright Food over the possible sale of the business.
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