Statement of reasons
This notice, which comes into force on the day after the date of its notification in the Gazette and expires on 31 May 2008, provides exemptions to sections 33(3), 37, 37A, 38A, and 51 to 54B of the Securities Act 1978 and the Securities Regulations 1983 (except regulation 8) in 2 related circumstances.
The first exemption applies to Toll Holdings Limited (Toll), Asciano Limited (Asciano), Asciano Finance Limited (AFL), Permanent Investment Management Limited (PIML), and every person acting on behalf of any or all of them and concerns 2 schemes of arrangement. Under the first scheme of arrangement, the proceeds of a capital reduction of Toll are applied, on behalf of holders of ordinary shares in Toll, to subscribe for units in Asciano Finance Trust (AFT). Under the second scheme of arrangement, shares in Asciano are issued to holders of ordinary shares in Toll.
The units and the shares issued under the 2 schemes of arrangement will be
“stapled”, and an application will be made to ASX Limited (ASX) for Asciano and AFT to be admitted to the official list of ASX and for the stapled securities to be quoted by ASX.
The second exemption applies to Toll, AFL, PIML, and every person acting on behalf of any or all of them and concerns the replacement of PIML with AFL as the responsible entity of AFT. Under Australia's Corporations Act 2001, a registered managed investment scheme like AFT requires the appointment of a responsible entity who acts as a manager and a trustee. Initially, PIML will act as AFT's responsible entity. However, PIML is intended to be subsequently replaced by AFL.
Both of the exemptions are subject to conditions that ensure that the offer of the securities and the replacement of the responsible entity is carried out in accordance with the laws of Australia and all applicable codes, rules, and other requirements.
The Securities Commission considers that it is appropriate to grant the exemptions because—
the exemptions accord with the policies behind the Securities Act (Overseas Companies) Exemption Notice 2002. That notice recognises that persons who already hold securities in overseas companies have taken on the risk associated with those securities and can to a degree be assumed to have a familiarity with them. It allows New Zealanders who are shareholders in overseas companies to participate in rights offers and offers arising from reconstructions that might otherwise not be extended to shareholders in New Zealand due to the cost of compliance:
while the offers of securities to be made in the course of the Toll restructuring do not meet the precise terms of the Securities Act (Overseas Companies) Exemption Notice 2002, the policy underlying that notice is equally applicable to those offers:
the effect of the conditions of the exemptions in this notice is that New Zealand shareholders will receive an explanatory memorandum, prepared under Australian law and approved by the Australian courts, that will provide sufficient information and disclosure to allow investors to make an informed decision regarding the proposed schemes of arrangement and the proposed offers of securities.