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Summary of

Securities Act (A&R Whitcoulls Group Holdings Pty Limited) Exemption Notice 2004

2004/246

Gazetted on 20 August 2004
Expires on 30 November 2004

Effects of the exemption
A&R Whitcoulls is able to provide financial information in respect of all its wholly-owned subsidiaries as at 31 May 2004, regardless of whether all these subsidiaries were guaranteeing subsidiaries at that date.

A&R Whitcoulls is able to exclude commercially sensitive information from certain material contracts that will be attached to the registered prospectus.

Background
A&R Whitcoulls intends to offer an issue of secured bonds on NZDX to the public.

The exemption
A&R Whitcoulls is exempted from clauses 7(2), 16(1), 27(1), 29(a), and 36(1)(e) and (f) of the Second Schedule of the Securities Regulations 1983 in so far as those clauses require a registered prospectus for the bond offer to contain financial information in respect of the group as at 31 May 2004.

A&R Whitcoulls is also exempted from regulation 7(1)(a) of the Securities Regulations 1983 in so far as that paragraph requires the registered prospectus for the bond offer to include a copy of the specified material contracts; and from clause 33(b) of the Second Schedule of the Regulations in so far as that paragraph applies to any of the specified material contracts.

Conditions
The exemption from clauses 7(2), 16(1), 27(1), 29(a), and 36(1)(e) and (f) of the Second Schedule of the Securities Regulations 1983 is subject to the condition that the registered prospectus for the bonds:

• includes the information required under these clauses, but in respect of the company and its wholly-owned subsidiaries as at 31 May 2004;
• clearly explains that this financial information concerns the company and its wholly-owned subsidiaries, rather than the group, and explains why; and
• states when each wholly-owned subsidiary of the company became a guaranteeing subsidiary.

The exemption from regulation 7(1)(a) of the Securities Regulations 1983 is subject to the condition that the prospectus for the bonds delivered for registration has attached or is accompanied by the following:

• a copy of the material contracts specified in the Exemption Notice without the excluded provisions;
• a statement from the company's directors that the excluded provisions do not contain any material adverse information;
• information on where people can inspect the material contracts (without the excluded provisions);
• a statement that the excluded provisions are not in the copy of the material contracts delivered to the Registrar of Companies;
• information on why the provisions were excluded; and
• a general statement of the nature of the excluded provisions.

Reasons

• The exemption from regulation 7(1)(a) of the Securities Regulations 1983 and clause 33(b) of the Second Schedule of the Regulations meets the criteria stated in the 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 website at www.seccom.govt.nz/exemptions/exemption-policy.shtml;
• the detriment to the commercial interests of A&R Whitcoulls by the disclosure of the excluded provisions would outweigh any benefit to prospective investors arising from their disclosure;
• the conditions of the exemption from regulation 7(1)(a) of the Securities Regulations 1983 and clause 33(b) of the Second Schedule of the Regulations require that A&R Whitcoulls explains to prospective investors the general nature of the excluded provisions and why they have been excluded;
• the directors of the issuer 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 Regulations require that A&R Whitcoulls provide financial information in respect of itself and all guaranteeing subsidiaries as at 31 May 2004. As at that date, however, only three of A&R Whitcoulls' 13 wholly-owned subsidiaries were guaranteeing subsidiaries. The further 10 wholly-owned subsidiaries became guaranteeing subsidiaries a short while later, by 4 June 2004;
• the exemption from clauses 7(2), 16(1), 27(1), 29(a) and 36(1)(e) and (f) of the Second Schedule of the Regulations permits A&R Whitcoulls to provide financial information in respect of itself and all 13 guaranteeing subsidiaries as at 31 May 2004. The Commission believes this would provide relevant and useful information to prospective investors and require all material information to be disclosed, without the need for A&R Whitcoulls to prepare dual account