Securities Act (Babcock & Brown Limited) Exemption Notice 2009

  • expired
  • Securities Act (Babcock & Brown Limited) Exemption Notice 2009: expired, on 1 April 2009, by clause 3.

Reprint
as at 1 April 2009

Crest

Securities Act (Babcock & Brown Limited) Exemption Notice 2009

(SR 2009/12)

  • Securities Act (Babcock & Brown Limited) Exemption Notice 2009: expired, on 1 April 2009, by clause 3.


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Securities Commission.


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 (Babcock & Brown Limited) Exemption Notice 2009.

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 31 March 2009.

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

    Act means the Securities Act 1978

    AUD notes means the subordinated notes issued by Babcock & Brown Limited that are quoted on the securities market operated in Australia by ASX Limited (a company incorporated in Australia) under code BNBG

    AUD notice of meeting means the notice of meeting (including accompanying explanatory materials) that is to be sent to registered holders of AUD notes calling a meeting to vote on the AUD variation

    AUD terms means the terms of the AUD notes set out in Schedule 1 of the trust deed relating to the AUD notes between Babcock & Brown Limited, Babcock & Brown International Pty Limited (a company incorporated in Australia), and Trust Company Fiduciary Services Limited (a company incorporated in Australia, formerly Permanent Trustee Company Limited) as trustee

    AUD variation means the proposed variation to the AUD terms that will be set out in the AUD notice of meeting and that requires the approval by way of special resolution of the holders of the AUD notes in accordance with the AUD terms

    Babcock & Brown Limited means Babcock & Brown Limited, a company incorporated in Australia

    NZD notes means the subordinated notes issued by Babcock & Brown Limited that are quoted on the debt security market operated by NZX Limited under the code BNB010

    NZD notice of meeting means the notice of meeting (including accompanying explanatory materials) that is to be sent to the registered holders of NZD notes calling a meeting to vote on the NZD variation

    NZD terms means the terms of the NZD notes set out in Schedule 1 of the trust deed relating to the NZD notes between Babcock & Brown Limited, Babcock & Brown International Pty Limited (a company incorporated in Australia), and Trust Company Fiduciary Services Limited (a company incorporated in Australia, formerly Permanent Trustee Company Limited) as trustee

    NZD variation means the proposed variation to the NZD terms that will be set out in the NZD notice of meeting and that requires the approval by way of special resolution of holders of the NZD notes in accordance with the NZD terms

    Regulations means the Securities Regulations 1983.

    (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 section 37(1) of Act
  • Babcock & Brown Limited and every person acting on its behalf are exempted from section 37(1) of the Act in respect of the AUD variation and the NZD variation.

6 Condition of exemption relating to notices of meeting
  • (1) The exemption in clause 5 is subject to the condition that the AUD notice of meeting and the NZD notice of meeting each contain the matters specified in clauses 1, 4, 11, 12, 13, and 14 of Schedule 2 of the Regulations (subject to subclause (2)).

    (2) For the purposes of subclause (1),—

    • (a) the aggregate amount referred to in clause 12(1) and (2) of Schedule 2 of the Regulations must be as at a date not earlier than 6 months before the date of the notice of meeting; and

    • (b) each reference to a registered prospectus in clause 14 of Schedule 2 of the Regulations must be read as a reference to the notice of meeting.

7 Further condition of exemption relating to notices of meeting
  • The exemption in clause 5 is subject to the further condition that—

    • (a) the AUD notice of meeting contains a statement by the directors of Babcock & Brown Limited to the effect that, in the opinion of all directors, after due enquiry by them, the notice of meeting contains all information material to the decision of New Zealand holders of AUD notes about whether to vote for the AUD variation; and

    • (b) the NZD notice of meeting contains a statement by the directors of Babcock & Brown Limited to the effect that, in the opinion of all directors, after due enquiry by them, the notice of meeting contains all information material to the decision of New Zealand holders of NZD notes about whether to vote for the NZD variation.

Dated at Wellington this 13th day of February 2009.

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


[Seal]

C A N Beyer,
Member.


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 March 2009, exempts Babcock & Brown Limited (Babcock & Brown), subject to conditions, from section 37(1) of the Securities Act 1978 (the Act) in respect of a proposal to vary the terms of subordinated New Zealand dollar denominated notes (NZD notes) quoted on the New Zealand debt market operated by NZX Limited (the NZDX) and subordinated Australian dollar denominated notes (AUD notes) quoted on the securities market operated in Australia by ASX Limited (the ASX).

The Securities Commission considers that the exemptions are appropriate for the following reasons:

  • Babcock & Brown is in financial distress. Its situation has already been publicly disclosed under its continuous disclosure obligations through the ASX and the NZDX. The company and its senior creditors are negotiating a restructure to avoid administration. As part of the restructure, Babcock & Brown proposes to vary the terms of its AUD notes and NZD notes:

  • under the terms of the AUD notes and the NZD notes, Babcock & Brown must put its proposal to noteholders of the respective notes for their vote. The key variation, in relation to both the AUD notes and the NZD notes, will be that the obligation to pay monies owed under the notes would be deferred and only subject to there being available funds. An effect of this is that Babcock & Brown will no longer be obliged to meet regular interest payments throughout the term of the notes. The company does not believe it will be able to meet its next interest payments:

  • under Australian law, a prospectus is not required to offer the variations to noteholders. In New Zealand, an offer to vary the terms of a security is an offer of securities, so the proposed amendments would usually require short-form prospectuses and audited financial statements. Babcock & Brown is of the view that it does not have the time, nor the financial information, required to register prospectuses before the obligation to pay interest under the notes arises:

  • under Australian law, each variation is offered to noteholders on the basis of information provided in a notice of meeting. This document is required, under Australian law, to provide all information known to the directors that is material to the noteholders’ decision on whether or not to vote for the variation proposal:

  • this exemption allows Babcock & Brown to put its proposal to New Zealand holders of AUD notes and NZD notes for their consideration on the same basis as it can under Australian law. Separate notices of meeting will be sent to holders of AUD notes and holders of NZD notes. In both cases, a 75% majority vote is required to effect the variation:

  • the conditions of exemption require each notice of meeting to contain certain information normally provided in a short-form prospectus. Although this information will not contain detailed and audited financial information, the prospects of recovery for the noteholders, as described by the company, are so small that there is little assistance to be gained from financial statements that would add to the information required in the notice of meeting and the information already disclosed under continuous disclosure obligations:

  • the conditions of the exemption require the directors to state in each notice of meeting that in the opinion of all directors, after due enquiry, the notice of meeting contains all information material to the New Zealand noteholders’ decision about whether to vote for the variation proposal. Each notice of meeting will be an advertisement in terms of the Act, meaning the company’s directors face criminal and civil liability for any untrue statement.


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

Date of notification in Gazette: 16 February 2009.


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Securities Act (Babcock & Brown Limited) Exemption Notice 2009. The reprint incorporates all the amendments to the notice as at 1 April 2009, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that have yet to come into force or that contain relevant transitional or savings provisions are also included, after the principal enactment, in chronological order.

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/legislation/reprints.shtml or Part 8 of the Tables of Acts and Ordinances and Statutory Regulations, and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)
  • Securities Act (Babcock & Brown Limited) Exemption Notice 2009 (SR 2009/12): clause 3