As discussed in Chapter 4, it is important to maintain a good working relationship through regular interactions with the private party (including informal discussions and formal meetings). This will provide the private party with the opportunity to advise the State early of an impending change in ownership/control, providing the contract director with additional time to prepare for the request (which may be important if the project deed provides the State with a short response period).
When a contract director receives a change in ownership/control request or notification, the contract director will need to:
• review the relevant project deed clauses to understand the requirements of the contract;
• review the processes outlined in the contract administration manual; and
• determine if any legal or commercial advice is required.
Should professional advice be required, the contract director should consult their Partnerships Victoria contact as DTF has visibility over other Partnerships Victoria projects that could be receiving the same request. In this case, DTF can facilitate procuring a common set of advice which will be more efficient and ensure a consistent State response across projects.
At a minimum, legal and commercial advice should be sought to carry out the necessary due diligence assessment on the proposed transaction, to ensure the reputation, experience and financial viability of the new entity and to ascertain if there are any reasons why the State should consider withholding its consent to the change in ownership/control request.
Project deeds typically provide for the State to be reimbursed for adviser costs incurred in considering the request for change in ownership/control because it is a private party initiated event.
The contract director also needs to consider the drivers for each of the parties involved in the proposed transaction, as exiting parties' interests are not necessarily aligned with those of the proposed investor or the State. Therefore the contract director should be aware that each party's own position and interests may impact their representations and conduct throughout the change in control process.