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Summary of

Securities Act (Momentum Magazine Group Limited) Exemption Notice 2004

2004/292

Gazetted on 2 September 2004
Expires on 20 February 2005

Effects of the exemption
Momentum Magazine Group Limited is able to include information on the company's proposed business activities, including the magazine titles it will own, in pre-prospectus advertising.

Background
Momentum Magazine Group Limited is being incorporated as a new company which will publish three existing magazine titles currently published by Espy Magazine Limited and Kiwi Property Investor Magazine Limited. The new company intends to fund its operations through a public offer of shares.

The exemption
Momentum Magazine Group Limited is exempted from section 33(1) of the Securities Act 1978 and from regulation 17(2) of the Securities Regulations 1983.

Conditions
The exemption from section 33(1) of the Securities Act 1978 is on condition that any pre-prospectus advertising for the shares:

• states that the company is considering a public offer of shares;
• states that no applications for the shares will be accepted unless the investor has first received an investment statement;
• if it states that the company is seeking preliminary indications of interest, explains how investors can express interest, and states that expressions of interest will not be taken as a commitment;
• contains no other information, apart from any or all of the following:
  • the company's full name, a description of it and the nature of its proposed business, including the brands it will own or manage;
  • a description of the shares, including any rights or privileges attached;
  • the interest rates of the proposed shares;
  • the total number of shares to be offered;
  • a statement of the intended use of the funds raised from the share offer;
  • the terms of the offer;
  • a description of the class of persons to whom the offer will be made;
  • the date of the offer; and
• is dated and is not distributed later than six months after this date.

The exemption from regulation 17(2) of the Securities Regulations 1983 is on condition that the certificate required by regulation 17(1) of the Regulations is in the form set out in the Exemption Notice, which differs slightly from that contained in the Fourth Schedule of the Regulations.

Reasons
Section 5(2CA) of the Act permits issuers to make pre-prospectus statements about an intended offer in order to gauge potential investor interest in the offer. In this case, a statement in a pre-prospectus document that includes a brief description of Momentum Magazine Group Limited and the nature of its proposed business (including the brands that it will own or manage) will provide additional relevant information about the offer.

The pre-prospectus information is limited in nature and is not permitted to address the merits of the offer.

A regulation 17 certificate must still be completed by Momentum Magazine Group Limited. The exemption simply permits this certificate to be drafted in a slightly different format to that contained in the Fourth Schedule of the Regulations.