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Summary of

Securities Act (CanWest MediaWorks (NZ) Limited) Exemption Notice (No 2) 2004

2004/190

Gazetted on 24 June 2004
Expires on 31 December 2004

Effects of the exemption
CanWest MediaWorks (NZ) Limited and Global Communications Limited are not required to include the following information in offer documents:

• information on Global Communications Limited as issuer of the shares;
• the price of the shares;
• the net tangible asset backing per unit of the shares being offered.

The issuers are able to include the following information in offer documents:

• a prospective statement of cash flows that is aligned to the normal accounting period of CanWest MediaWorks (NZ) Limited.

Background
CanWest MediaWorks (NZ) Limited ("CanWest") is a proposed company that is to be incorporated and is to purchase the New Zealand business of Global Communications Limited. Approximately 30% of the shares in CanWest will be offered to the public, employees of CanWest, and various institutional investors in New Zealand. Employees of CanWest will also be offered options to acquire shares.

The price for the shares is to be determined through a book-building process, and will not be known at the time of registering the prospectus.

The exemption
CanWest and Global are exempted from regulations 3(1) and 7A(1) of the Securities Regulations 1983 to the extent that these provisions require the offer document to contain information about Global as an issuer of the shares. They are also exempted from clauses 1(4), 10(1)(c) and 11(3)(g) of the First Schedule of the Regulations in respect of the shares offered, and from 13(a)iii of the First Schedule in respect of the share options.

Conditions
The exemptions from regulations 3(1) and 7A(1) are subject to the conditions that the offer document contains:

• a description of the effect of these exemptions; and
• a statement that Global is an issuer of the shares, and as such, has obligations under the Securities Act 1978 and the Securities Regulations 1983.

The exemption from clause 1(4) of the First Schedule is subject to the condition that the offer document:

• describes how the final price and retail price for the shares will be fixed;
• gives the indicative price range for the shares;
• describes the factors that may be taken into account in fixing the final price;
• states when the final price is expected to be fixed;
• describes how the shares will be allocated;
• states whether the issuers may set a final price outside the indicative price range;
• states how an investor may ascertain the final price and the retail price once these have been fixed;
• describes the procedures for holding subscription money;
• describes how over-subscriptions will be treated and the procedure for making refunds; and
• states, in terms permitted by regulation 23, that an application has been made for listing on NZX.

The exemption from clause 10(1)(c) of the First Schedule is subject to the conditions that

• the offer document contains a prospective statement of cash flows for CanWest and its subsidiaries for each of the following periods:
  • the period from 17 May 2004 to 31 August 2004; and
  • the period from 1 September 2004 to 31 August 2005; and
• the prospective statements of cash flows comply with clause 10(2) of the First Schedule.

The exemption from clause 11(3)(g) of the First Schedule is subject to the condition that the offer document contains the information required by clause 11(3)(g) of the First Schedule, calculated as if the final price was fixed at the high-point, at the mid-point, and at the low-point of the indicative price range stated in the offer document.

The exemption from clause 13(a)(iii) of the First Schedule is subject to the condition that the offer document describes how the exercise price of the options will be fixed.

Reasons
The price for the shares is to be determined via a book-building process, and will not be known at the date the offer document is to be registered. This means CanWest cannot comply with clauses 1(4), 11(3)(g) and 13(a)(iii) of the First Schedule of the Regulations. The conditions of the exemptions require that investors receive certain relevant information about the pricing mechanism for the shares and the options.

The exemption from clause 10(1)(c) of the First Schedule of the Regulations will mean that the prospective statements of cash flows will be aligned to the normal accounting period of CanWest. This means the information will be more easily comparable with the financial statements of CanWest, and more useful for investors.

Where Part II of the Act applies to an offer of previously allotted securities, the person offering the securities who is also the original allotter of the securities has a responsibility for the offer as issuer. Information about the offeror as issuer may not be useful to the investor and may be confusing. The exemptions from regulations 3(1) and 7A(1) of the Regulations are consistent with current Commission policy. As the securities being offered are shares in CanWest, information required under those regulations about Global is likely to be less relevant to investors. The condition of the exemptions requires investors to be advised that Global remains legally responsible as an issuer.