What document must be sent to shareholders and creditors during a Scheme of Arrangement?

During a Scheme of Arrangement, it is essential to communicate the details of the proposal to shareholders and creditors to ensure they are adequately informed before making any decisions. The document that fulfills this requirement is the explanatory statement. This statement provides a comprehensive overview of the Scheme, outlining its purpose, implications, and any changes it may bring about.

The explanatory statement helps shareholders and creditors understand the financial and operational impact of the proposed arrangement, as well as their rights and obligations. It typically includes information on the terms of the arrangement, the process involved, and the timeline for implementation. This transparency is crucial for ensuring that the stakeholders can make informed decisions regarding their participation in the Scheme.

Other documents, such as a legal memorandum or summary of terms, may provide additional context or detail but do not serve the primary role of informing stakeholders in the same comprehensive way. An acceptance form would be relevant for formal acceptance but does not directly educate shareholders and creditors about the Scheme itself. Thus, the explanatory statement is the correct document that must be sent to shareholders and creditors during a Scheme of Arrangement.