CSR was given a green light to proceed with the demerger of its sugar business on 23 April in a successful full bench appeal of a February decision that had refused the demerger.
The Court of Appeal allowed CSR to present the demerger proposal to its shareholders. The shareholders’ decision then must still go before a court again for final approval.
Concern about the demerger stems from CSR’s asbestos liabilities caused by its involvement with the Wittenoom asbestos mine in Western Australia. Some are worried that this decision could mean that CSR will not have the funds to meet its liabilities.
The three appeal judges overturned the original decision that blocked the demerger based on the fact that there was insufficient evidence on which to decide there was “a material rather than an abstract” increase in the risk that asbestos sufferers, to whom its business is still exposed, would not be paid.
It is argued that those in opposition to the decision will have another opportunity to block a demerger at CSR’s next court appearance to gain approval for the shareholders’ decision.
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