Securities Act (Meridian Energy Limited) Exemption Notice 2008

  • not the latest version

2008/436

Crest

Securities Act (Meridian Energy Limited) Exemption Notice 2008

Pursuant to the Securities Act 1978, the Securities Commission gives the following notice (to which is appended a statement of reasons of the Securities Commission).

Notice

1 Title

  • This notice is the Securities Act (Meridian Energy Limited) Exemption Notice 2008.

2 Commencement

  • This notice comes into force on the day after the date of its notification in the Gazette.

3 Expiry

  • This notice expires on the close of 27 November 2013.

4 Interpretation

  • (1) In this notice, unless the context otherwise requires,—

    Act means the Securities Act 1978

    consolidated financial statements means, at any date, the latest publicly available consolidated financial statements of the Meridian group, prepared in accordance with generally accepted accounting practice and on a basis consistent with the most recent audited consolidated financial statements of the Meridan group, except to the extent (if any) expressly disclosed in the notes to those statements or otherwise disclosed

    generally accepted accounting practice has the meaning given in section 3 of the Financial Reporting Act 1993

    guaranteeing group, in relation to the specified debt securities, means the group comprising—

    • (a) Meridian; and

    • (b) every guaranteeing subsidiary

    guaranteeing subsidiary, in relation to the specified debt securities, means a subsidiary of Meridian that—

    • (a) is unconditionally liable (whether or not jointly or severally with Meridian or any other person) to repay the securities; or

    • (b) is liable to repay the securities subject only to the condition that Meridian or any other person has failed to do so

    Meridian means Meridian Energy Limited

    Meridian group means, at any time, Meridian and each of its subsidiaries and its associates (as determined in accordance with generally accepted accounting practice) at that time

    non-guaranteeing subsidiary means a subsidiary of Meridian that is not a guaranteeing subsidiary

    Regulations means the Securities Regulations 1983

    relevant date means,—

    • (a) in clause 6, the date of the most recent statement of financial position of the Meridian group; and

    • (b) in clause 8, the date of the most recent annual or half-yearly consolidated financial statements of the Meridian group that were available before the request made under section 54B(1) of the Act, as referred to in clause 7

    specified debt securities means the debt securities of which Meridian is the issuer and that are guaranteed by the guaranteeing group

    subsidiary means a subsidiary of Meridian within the meaning of section 5 of the Companies Act 1993, and includes any other entity the financial statements of which are required to be consolidated with the financial statements of Meridian in accordance with generally accepted accounting practice.

    (2) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.

5 Exemption from certain requirements relating to financial statements in prospectus

  • Meridian and every person acting on its behalf are exempted from clauses 7, 16 to 32, and 36 of Schedule 2 of the Regulations with respect to the registered prospectus for the specified debt securities.

6 Conditions of exemption in clause 5

  • (1) The exemption in clause 5 is subject to the following conditions:

    • (a) that the registered prospectus for the specified debt securities contains the financial statements and other documents referred to in clauses 7 and 36 of Schedule 2 of the Regulations, and that the financial statements and other documents comply with those clauses as if references to the group were references to the Meridian group (and not to the guaranteeing group):

    • (b) that the registered prospectus for the specified debt securities contains or refers to the financial statements referred to in clauses 16 to 32 of Schedule 2 of the Regulations, and that the financial statements—

      • (i) comply with those clauses as if references to the group were references to the Meridian group (and not to the guaranteeing group); and

      • (iii) are included in the audited financial statements that have been presented to the House of Representatives in accordance with section 17(2) of the State-Owned Enterprises Act 1986 or published in accordance with section 17(2A) of that Act:

    • (c) that the registered prospectus for the specified debt securities contains the following:

      • (i) a statement to the effect that the financial statements and other documents referred to in paragraphs (a) and (b) are those of the Meridian group and not those of the guaranteeing group:

      • (ii) a statement listing or describing the members of the guaranteeing group as at the relevant date:

      • (iii) an unaudited pro forma statement showing the consolidated assets, less the consolidated liabilities, of the guaranteeing group as at the relevant date:

      • (iv) a statement by the directors of Meridian of the aggregate amount of the total tangible assets of all the non-guaranteeing subsidiaries (excluding balances with other members of the Meridian group) as at the relevant date, and a statement that, on that date, this is not more than 20% of the total tangible assets of the Meridian group (excluding balances with other members of the Meridian group):

      • (v) a statement by the directors of Meridian of the aggregate amount of the consolidated earnings before interest and tax (but excluding revaluations) of all the non-guaranteeing subsidiaries as at the relevant date, and a statement that, on that date, this is not more than 10% of the aggregate consolidated earnings before interest and tax (but excluding revaluations) of the Meridian group:

      • (vi) a statement by the directors of Meridian that they consider that the financial statements and other documents referred to in paragraphs (a) and (b), when read together with the pro forma statement referred to in subparagraph (iii), provide a reasonable basis to assess the financial position of the guaranteeing group in relation to the specified debt securities.

    (2) The exemption in clause 5 is subject to the further condition that, on the date the prospectus is delivered in registrable form to the Registrar of Companies for registration, the directors of Meridian are satisfied that—

    • (a) the aggregate amount of the total tangible assets of all the non-guaranteeing subsidiaries (excluding balances with other members of the Meridian group) is not material in comparison with the amount of total tangible assets of the Meridian group (excluding balances with other members of the Meridian group), given the level of total tangible assets permitted to remain outside the guaranteeing group as set out in subclause (1)(c)(iv); and

    • (b) the aggregate amount of consolidated earnings before interest and tax (but excluding revaluations) of all non-guaranteeing subsidiaries for their most recently completed accounting period is not material in comparison to the amount of consolidated earnings before interest and tax (but excluding revaluations) of the Meridian group for that period, given the level of earnings permitted to remain outside the guaranteeing group as set out in subclause (1)(c)(v).

7 Exemption from certain regulations relating to requests under section 54B(1) of Act

  • Meridian and every person acting on its behalf are exempted from section 54B(1) of the Act to the extent that that provision requires Meridian to provide, at the request of a holder of specified debt securities,—

    • (a) the most recent annual or half-yearly financial statements referred to in regulation 23A(d) of the Regulations; and

    • (b) all documents required to be incorporated in, be attached to, or accompany those financial statements.

8 Conditions of exemption in clause 7

  • (1) The exemption in clause 7 is subject to the following conditions:

    • (a) that, when providing information to a holder of specified debt securities following a request under section 54B(1) of the Act, Meridian provides to the holder the most recent annual or half-yearly consolidated financial statements of the Meridian group, along with all documents required to be incorporated in, be attached to, or accompany those financial statements:

    • (b) that, when providing information to a holder of specified debt securities following a request under section 54B(1) of the Act, Meridian provides the following to the holder:

      • (i) a statement to the effect that the consolidated financial statements and other documents referred to in paragraph (a) are those of the Meridian group and not those of the guaranteeing group:

      • (ii) a statement listing or describing the members of the guaranteeing group as at the relevant date:

      • (iii) an unaudited pro forma statement showing the consolidated assets, less the consolidated liabilities, of the guaranteeing group as at the relevant date:

      • (iv) a statement by the directors of Meridian of the aggregate amount of the total tangible assets of all the non-guaranteeing subsidiaries (excluding balances with other members of the Meridian group) as at the relevant date, and a statement that, on that date, this is not more than 20% of the total tangible assets of the Meridian group (excluding balances with other members of the Meridian group):

      • (v) a statement by the directors of Meridian of the aggregate amount of the consolidated earnings before interest and tax (but excluding revaluations) of all the non-guaranteeing subsidiaries as at the relevant date, and a statement that, on that date, this is not more than 10% of the aggregate consolidated earnings before interest and tax (but excluding revaluations) of the Meridian group:

      • (vi) a statement by the directors of Meridian that they consider that the consolidated financial statements and other documents referred to in paragraph (a), when read together with the pro forma statement referred to in subparagraph (iii), provide a reasonable basis to assess the financial position of the guaranteeing group in relation to the specified debt securities.

    (2) The exemption in clause 7 is subject to the further condition that, on the date information referred to in subclause (1) is provided to the holder of specified debt securities following a request under section 54B(1) of the Act, the directors of Meridian are satisfied that—

    • (a) the aggregate amount of the total tangible assets of all the non-guaranteeing subsidiaries (excluding balances with other members of the Meridian group) is not material in comparison with the amount of total tangible assets of the Meridian group (excluding balances with other members of the Meridian group), given the level of total tangible assets permitted to remain outside the guaranteeing group as set out in subclause (1)(b)(iv); and

    • (b) the aggregate amount of consolidated earnings before interest and tax (but excluding revaluations) of all non-guaranteeing subsidiaries for their most recently completed accounting period is not material in comparison to the amount of consolidated earnings before interest and tax (but excluding revaluations) of the Meridian group for that period, given the level of earnings permitted to remain outside the guaranteeing group as set out in subclause (1)(b)(v).

    (3) The exemption in clause 7 is subject to the further condition that, when providing the information referred to in subclause (1), Meridian—

    • (a) does not require payment of any fee (which would otherwise be allowed under section 54B(1)) of the Act; but

    • (b) does provide the information in accordance with section 54B(2) of the Act.

Dated at Wellington this 25th day of November 2008.

The Common Seal of the Securities Commission was affixed in the presence of:

[Seal]

J Diplock,
Chairperson.

Statement of reasons

This notice comes into force on the day after its notification in the Gazette and expires on 27 November 2013.

The exemption relates to debt securities issued by Meridian Energy Limited (Meridian) and guaranteed by a guaranteeing group comprising Meridian and some (but not all) of its subsidiaries.

The notice exempts Meridian from certain requirements relating to the registered prospectus for the debt securities and from requirements relating to information that must be provided to security holders on request. The normal requirements relating to the registered prospectus and information provided on request would require Meridian to prepare financial statements for the guaranteeing group. Meridian does not prepare financial statements for that particular group. The conditions of the exemption therefore require that, in place of those financial statements, Meridian must provide the financial statements of the Meridian group along with certain other information, including the following:

  • a list of the members of the guaranteeing group:

  • an unaudited pro forma statement showing the consolidated assets, less the consolidated liabilities, of the guaranteeing group:

  • a statement of the aggregate amount of the total tangible assets of the Meridian subsidiaries that are not in the guaranteeing group (the non-guaranteeing subsidiaries) and a statement that this is not more than 20% of the total tangible assets of the Meridian group:

  • a statement of the aggregate amount of the consolidated earnings before interest and tax (but excluding revaluations) of the non-guaranteeing subsidiaries, and a statement that this is not more than 10% of the aggregate consolidated earnings before interest and tax (but excluding revaluations) of the Meridian group:

  • a statement that the directors of Meridian consider that the financial statements, along with the information required to be provided, provide a reasonable basis on which to assess the financial position of the guaranteeing group in relation to the debt securities.

In addition, the directors must be satisfied that the amount of tangible assets and earnings of the non-guaranteeing subsidiaries is not material in comparison with the amount of tangible assets and earnings of the Meridian group.

The Commission considers that it is appropriate to grant the exemption for the following reasons:

  • Meridian does not currently prepare financial statements for the guaranteeing group. Preparing these financial statements would impose a significant cost, given the size of the group:

  • the conditions of the exemption require Meridian to provide prospective investors and security holders with financial information about the Meridian group, and significant financial information about the guaranteeing group that is available to Meridian. Further, restrictions are imposed on variations permitted between assets and earnings of the Meridian group and the guaranteeing group. In these circumstances, prospective investors and security holders will not be materially disadvantaged in assessing the ability of the guaranteeing group to meet the obligations due under the debt securities.

Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 27 November 2008.

This notice is administered by the Securities Commission.