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Summary of

Securities Act (Pohutukawa Private Equity Limited) Exemption Notice 2004

2004/293

Gazetted on 2 September 2004
Expires on 31 March 2005

Effects of the exemption
Pohutukawa Private Equity Limited and its 25 special purpose investment companies do not need to include a prospective statement of cash flows in the registered prospectus for their share offer.

Background
Pohutukawa is a private equity investment company, which will invest via its investment companies in a range of sectors in Australia and New Zealand. Pohutukawa will be managed by Pohutukawa Management Limited, which is a joint venture between Direct Capital Private Equity Limited and ABN Amro Craigs Limited. The share offer will consist of stapled ordinary voting and non-voting redeemable preference shares in Pohutukawa together with non-voting redeemable preference shares in the investment companies.

The exemption
Pohutukawa and its investment companies are exempt from clause 10(1)(c) of the First Schedule of the Securities Regulations 1983.

Conditions
The exemption is on condition that the prospectus:

• explains why a prospective statement of cash flows is not included, and
• states that investors should regard the investment as high risk.

Reasons
The issuers are investment companies, and their business is therefore more akin to that of a managed fund investing in market instruments than a traditional company. The issuers have not yet determined the precise make-up of their investment portfolio. For this reason, any prospective financial information provided by the issuers would be highly speculative and may be of little relevance to potential investors.

The condition that the prospectus contains a statement of the issuers' reasons for not providing the prospective statement of cash flows, and an acknowledgment that the investment is high risk, requires that potential investors are informed that certain information is not included and why, and that their attention is drawn to the nature of the investment.

The directors of the issuers must still give a general description of their plans under clause 10(1)(a) of the First Schedule of the Securities Regulations 1983.