Dated at Wellington this 4th day of April 2011.
The Common Seal of the Securities Commission was affixed in the presence of:
D W Mayhew,
Statement of reasons
This notice, which comes into force on the day after its notification in the Gazette and expires on the close of 31 December 2013, exempts Genesis Power Limited (Genesis) from regulations 18(1)(a) and 26(1)(a) and (c) and clause 19(c) of Schedule 2 of the Securities Regulations 2009 (the Regulations), subject to conditions, in respect of offers of unsecured, subordinated, redeemable, capital bonds (the capital bonds) to be issued by Genesis.
The effect of the exemptions from regulation 18(1)(a) and clause 19(c) of Schedule 2 of the Regulations is to allow Genesis to exclude certain commercially sensitive information from the copies of documents that constitute a material contract and are attached to the registered prospectus.
The effect of the exemptions from regulation 26(1)(a) and (c) of the Regulations is to allow Genesis to include in the investment statement and any other advertisements an unaudited, simplified, pro-forma consolidated statement of financial position (the pro-forma statement) for Genesis and all guaranteeing subsidiaries in relation to the capital bonds (the Genesis Energy Group) that sets out the financial position of the Genesis Energy Group as it appears in its interim statement of financial position dated 31 December 2010 and compares this with the financial position of the Genesis Energy Group as if Genesis's acquisition of the Tekapo A and Tekapo B power stations (the Tekapo stations) had been completed as at 31 December 2010.
The Securities Commission considers that it is appropriate to grant the exemptions because—
the exemptions from regulation 18(1)(a) and clause 19(c) of Schedule 2 of the Regulations meet the criteria stated in the Securities Commission’s Exemption Policy Note for
“Applications to Exclude Commercially Sensitive Information from Material Contracts” (the Exemption Policy Note can be viewed on the Commission’s Internet site at http://www.seccom.govt.nz/exemptions/exemption-policy.shtml):
the detriment to the commercial interests of Genesis by the disclosure of the excluded provisions would outweigh any benefit to prospective investors from their disclosure:
the directors of Genesis must warrant that the non-disclosure of the excluded provisions does not make the registered prospectus misleading in any material particular by a failure to refer, or give proper emphasis, to any adverse circumstances:
the prospectus must state that information has been excluded from the agreements in question, the reasons why that information has been excluded, and the general nature of the information that has been excluded:
the proceeds of the offer will be used to partially fund the purchase of the Tekapo stations, which will have a significant impact on the financial position of the Genesis Energy Group. The exemptions from regulation 26(1)(a) and (c) of the Regulations allow information about the financial impact of the acquisition of the Tekapo stations to be included in the investment statement and other advertisements in circumstances where the acquisition occurs after the date of the most recent audited statement of financial position or interim statement of financial position:
the pro-forma statement provides prospective investors with information comparing the financial position of the Genesis Energy Group in the interim statement of financial position as at 31 December 2010 with the financial position of the Genesis Energy Group as if the acquisition of the Tekapo stations had been completed as at 31 December 2010. This will provide investors with more accurate information about the financial position of the Genesis Energy Group:
the conditions of the exemptions from regulation 26(1)(a) and (c) require a clear explanation about the nature of the pro-forma statement, the basis on which the value of the Tekapo stations recognised in the pro forma statement was determined, and whether or not the pro-forma statement is prepared on a basis consistent with the requirements of GAAP as it would apply to financial statements.