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Summary of

Securities Act (Property for Industry Limited) Exemption Notice 2004

2004/136

Gazetted on 27 May 2004
Expires on 28 February 2008

Effects of the exemption
Property for Industry Limited (PFIL) is able to offer shares under a share purchase plan without a prospectus or investment statement. However, the company is required to provide investors with an offer document for the plan.

Background
PFIL is seeking an exemption to facilitate limited offers of shares to existing shareholders.

The exemption
PFIL is exempted from sections 37 and 37A of the Securities Act 1978 and from the Securities Regulations 1983, except regulation 8.

The exemption relates to offers of shares under a share purchase plan which meets the following criteria:

• the offer must be open to all shareholders holding that class of shares, unless legal restrictions prevent the shares from being offered to a shareholder outside New Zealand;
• the offer must be made to all eligible shareholders on the same terms and conditions;
• the right to purchase the shares must not be renounceable;
• the shares being issued must carry the same rights as each other and as shares of the same class already issued;
• the share issue price must be less than the average market price of PFIL's shares for a period stated in the share purchase plan that falls within the month before the offer date or issue date;
• the issue price must be fixed and publicly notified before the shares are allotted; and
• no single shareholder can purchase more than $5,000 of the shares within a 12 month period.

Conditions

The exemption is subject to the following conditions:

• before subscribing, shareholders must have received a document that:
  • is signed by PFIL's directors;
  • contains the share offer;
  • describes how and when the subscription price will be determined;
  • describes how and when payment for the shares is to be made;
  • describes the relationship between the subscription price and the market price for the shares;
  • warns that the market price may change before the shares are allotted, and describes the effect this would have on the price or value of the shares being offered; and
  • states that a subscriber may obtain PFIL's most recent annual report and financial statements from the company free of charge;
• as soon as practicable after the subscription price has been fixed, PFIL must publish
  • the subscription price; and
  • an accompanying statement, signed by the company's directors, to certify that when the subscription price was fixed, PFIL had no information not publicly available that would, or would be likely to, have a material effect on the realisable price of the shares if the information were publicly known;
• PFIL must not allot the shares if, when the subscription price was fixed, PFIL had information not publicly available that would, or would be likely to, have a material effect on the realisable price of the specified securities if the information were publicly known.

Reasons
The exemption allows PFIL to undertake limited fund-raising from existing shareholders. The exemption will reduce compliance costs for PFIL and the offer will allow the shareholders to purchase shares at a discounted price.

The exemption is limited in the amount that can be raised in any year, so that any significant fund-raising will require full offer documents.

The conditions of exemption require that investors receive certain important information about the offer. As offers under the exemption can be made only to existing shareholders, and as PFIL is subject to the continuous disclosure requirements of the Securities Markets Act 1988 and the NZX Listing Rules, investors will have access to key relevant information on which to make their investment decision.