New Zealand Legislation: Regulations
Regulations are laws made under Acts
This notice applies to acts or omissions occurring on or after 24 November 2008 and expires on 31 January 2009. Because of changes in the transactions to which the notices apply, this notice revokes and replaces the Takeovers Code (Phitek Systems Limited) Exemption Notice 2008 that was gazetted on 30 October 2008.
The Takeovers Panel (the Panel) has granted exemptions for―
K One W One Limited (K One W One), TMT Ventures Limited (TMT), and VIF/TMT Ventures Limited (VIF/TMT) from rule 7(d) of the Takeovers Code (the Code) to the extent that rule 7(d) requires the notice of meeting to be in accordance with rule 16(b) of the Code in respect of any increase in the percentage of voting rights held in Phitek Systems Limited (Phitek) under a proposed rights issue; and
Phitek from rule 16(b) of the Code in respect of the notice of meeting.
K One W One holds shares representing more than 20% of the voting rights in Phitek. TMT and VIF/TMT are both wholly owned subsidiaries of TMT Management Limited and hold, in aggregate, more than 20% of the voting rights in Phitek. Direct Management Investments Limited is an associate of TMT and VIF/TMT. Custodial Services Limited holds shares in Phitek representing approximately 3% of the voting rights in Phitek.
TMT, VIF/TMT, and Direct Management Investments Limited propose to acquire Phitek shares held by Custodial Services Limited. These acquisitions would increase the voting control of TMT, VIF/TMT, and Direct Management Investments Limited and are caught by rule 6(1) of the Code. Shareholder approval under rule 7(c) of the Code is to be sought for the acquisitions at a meeting of shareholders.
Phitek proposes to undertake a pro-rata non-renounceable rights issue. Under the rights issue, Phitek shareholders may apply to the company to take up more than their pro-rata entitlement. Phitek may accept such applications in its discretion. K One W One, TMT, and VIF/TMT have expressed their intention to take up at least their pro-rata entitlements. The allotments to K One W One, TMT, and VIF/TMT under the rights issue may result in 1 or more of those persons increasing their voting control and being caught by rule 6(1) of the Code. Shareholder approval under rule 7(d) of the Code is to be sought for the allotments to K One W One, TMT, and VIF/TMT under the rights issue. Rule 7(d) requires that the notice of meeting makes the disclosures specified by rule 16(b) of the Code. However, the rule 16(b) disclosures cannot be made because of uncertainties in the level of participation in the rights issue by Phitek shareholders.
The Panel has granted these exemptions on the condition that the maximum percentage to which any of K One W One, TMT, and TMT/VIF could increase their voting control is disclosed in the notice of meeting.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemptions because―
it is impossible for the actual number of voting securities to be allotted and the relevant percentages required by rule 16(b) of the Code to be stated in the notice of meeting since these numbers and percentages are dependent on a number of factors that will not be known with certainty until after the notice of meeting is prepared:
all non-associated shareholders will have an opportunity to vote on the potential allotment of voting securities to K One W One, TMT, and VIF/TMT as a result of the rights issue:
if the non-associated shareholders approve the potential maximum allotment of voting securities to K One W One, TMT, and VIF/TMT, then, by implication, the shareholders also approve any lesser percentage of voting rights that may be allotted to K One W One, TMT, and VIF/TMT under the rights issue:
the rights issue will be conducted pursuant to a registered prospectus. The ability for shareholders to subscribe for securities that others cannot take up and thus provide adequate funding to ensure a company's growth is an acknowledged method of raising capital in New Zealand, and the Panel should facilitate these arrangements by granting appropriate exemptions where necessary.
