Pooled Entities. The entities of the ION Administration Group that are parties to the Deed of Cross Guarantee (“Pooled Entities”) are as follows: ION Limited (ACN 009 106 272) Castalloy Limited (ACN 007 528 583) Castalloy Manufacturing Pty Ltd (ACN 007 838 986) Castalloy Wheels Pty Ltd (ACN 007 894 984) Core Cast Limited (ACN 097 447 660) ION Automotive Group Limited (ACN 104 279 156) ION Automotive Systems Pty Ltd (ACN 000 000 000) ION Light Metal Castings Pty Ltd (ACN 104 930 181) ION Transmissions Pty Ltd (ACN 099 982 180) XCTA Pty Ltd (formerly Cootes Transport Pty Ltd) (ACN 010 383 016) XCTS Pty Ltd (formerly Cootes Tanker Service Pty Ltd) (ACN 004 495 765) XIRC Pty Ltd (formerly I.R. Cootes Pty Ltd) (ACN 004 801 076) XLC Pty Ltd (formerly Liquip Corp Pty Limited) (ACN 000 000 000) XLO Pty Ltd (formerly Liquip Overseas Pty Ltd) (ACN 094 440 589) XLS Pty Ltd (formerly Liquip Sales Pty Limited) (ACN 001 595 222) XLSE Pty Ltd (formerly Liquip Service Pty Ltd) (ACN 000 000 000) XLSV Pty Ltd (formerly Liquip Sales (Vict.) Pty Limited) (ACN 005 691 761) XST Pty Ltd (formerly Xxxxxxxxx Transport Pty Ltd) (ACN 006 271 352) The effect of the Deed of Cross Guarantee is that if an entity that is party to the deed is wound up, a creditor of that entity is able to make a claim for the full amount owed to it not only against that entity (being the principal debtor) but also against each of the other Pooled Entities. As such, each creditor will have an interest in considering the outcome for creditors of not only the entity which is its principal debtor, but also the outcome for creditors of all of the other Pooled Entities. For this reason, this report addresses the position of creditors of Pooled Entities from a consolidated perspective rather than on an entity by entity basis. This is more fully explained in sections 4.2 and 11.2 of this report. Non-pooled Entities The entities of the ION Administration Group that are not parties to the Deed of Cross Guarantee (“Non- pooled Entities”) are as follows: ION Finance Ltd (ACN 102 217 694) ION Holdings Pty Ltd (ACN 103 289 578) ION Investments Pty Ltd (ACN 105 824 511) Thomson & Scougall Industries Pty Ltd (ACN 000 091 314) XCHO Pty Ltd (formerly Cootes Holdings Pty Ltd) (ACN 000 000 000) This report addresses separately the position of creditors of each of the Non-pooled Entities. See section 11.3 below.
Pooled Entities. 18 of the 23 ION Administration Group entities are parties to a Deed of Cross Guarantee. These are referred to as Pooled Entities in this report. All of the operating entities in the ION Consolidated Group are Pooled Entities, except for ION NZ and ION US (see below). Creditors of each of the Pooled Entities effectively have the right to claim on all of the other Pooled Entities pursuant to the Deed of Cross Guarantee, if that entity goes into liquidation. In effect, the Pooled Entities have a common pool of creditors. As a result of the proposed DOCAs for the Pooled Entities all of the asset realisations and all of the corresponding creditor claims would be combined, which would simplify and accelerate the distribution of funds to creditors. The same effect could be achieved by separate liquidations of the Pooled Entities, but it would be more administratively burdensome for both the liquidators and creditors. The DOCAs would also better facilitate the ongoing operations or the sales of the viable entities (see further in section 11.2).
Pooled Entities. The Second Meetings of Creditors of the Pooled Entities are to be held concurrently on 6 May 2005, commencing at 12:30pm (Adelaide time) at the Grainger Studio at 00 Xxxxxxx Xxxxxx, Xxxxxxxx. The Administrators believe that the time and location for these meetings are most convenient for the majority of creditors of the Pooled Entities entitled to receive notice of those meetings. Creditors of the Pooled Entities may also attend either of the following venues at 1pm (AEST) and be linked to the Adelaide venue by video-conference: ▪ Melbourne Convention Centre, Latrobe Theatre, corner Xxxxxxx Street and Flinders Street, Melbourne; ▪ Albury Convention Centre, Swift Street, Albury. Creditors of the Pooled Entities attending at any of the designated venues in Adelaide, Melbourne or Albury will be entitled to vote at the Second Meetings of Creditors of those entities and to ask questions of the chairperson located at the Adelaide venue. At the Second Meetings of Creditors of the Pooled Entities, creditors of those entities may vote on the options described in section 11.2 of this report. As a result of the Deed of Cross Guarantee, creditors of each of the Pooled Entities will be entitled to vote in relation to all Pooled Entities.
Pooled Entities. As explained in section 4.2 of this report, the Deed of Cross Guarantee operates so that each Pooled Entity guarantees the debts of each creditor of the other Pooled Entities. The Deed of Cross Guarantee becomes enforceable in respect of such a debt only upon a winding up of a Pooled Entity. Consequently, if the creditors of a Pooled Entity resolve to wind up that entity, the creditors of that Pooled Entity would be entitled to rely on the Deed of Cross Guarantee to prove for their debt or claim not only against the Pooled Entity which is primarily liable for the debt or claim, but also against each of the other Pooled Entities, and also against ION Automotive (New Zealand) Limited (which is not in administration but is a party to the Deed of Cross Guarantee). If the creditors of each of the other Pooled Entities also resolved to wind up each of those entities, the end result would be that every creditor of any Pooled Entity would be a creditor of every Pooled Entity and also of ION Automotive (New Zealand) Limited. Thus, the Deed of Cross Guarantee delivers significant benefit to creditors of each Pooled Entity by enabling them to prove against and share in the distribution of assets of every Pooled Entity. The Deed of Cross Guarantee also entitles creditors who are admitted for the purposes of voting at the meeting of one Pooled Entity to vote at the meetings of all Pooled Entities. The operation of the Deed of Cross Guarantee means that the assets and liabilities of the Pooled Entities can be viewed on a pooled basis. However, in the absence of a pooling mechanism such as that available under a DOCA, 18 separate liquidations would be required and ION Automotive (New Zealand) Limited would also go into liquidation. This would be a cumbersome and costly process and would delay the distribution of funds to creditors, moreover it may adversely affect the value of the ION Administration Group and the ION NZ operations.
