The ownership structure of the private party in a Partnerships Victoria project is initially developed by the bidding consortium to meet both the government party's requirements and the needs of investors. The ownership structure of the private party can be complex. In most cases, the investors do not invest directly in the private party, instead investing through one or more intermediate entities that may be companies, trusts or partnerships. A change in the ownership or control of any one of these entities may result in a change in ownership or control of the private party. In addition, any of these entities may appoint an investment manager to manage the investment on their behalf, and that manager may be in a position to exercise control over the private party, even if it does not have an ownership stake.
Key subcontractors may also have complex ownership structures. The contract director must consider the specific ownership structure of the project, and understand how the relevant contractual provisions apply to each entity with a role in the ownership or control of the private party or key subcontractor. When any change is proposed, it may be necessary for the contract director to undertake due diligence to ascertain its appropriateness by seeking legal advice on the rights of each entity. This may require a legal review of all of the relevant company constitutions, shareholders agreements, trust deeds and partnership agreements.