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Offeror(s): South Australian Investments Limited, SABC Project Management Pty Ltd
Independent Adviser(s): PWC (Rule 18)
In July 2002, Pure New Zealand Limited (“Pure”), an NZX listed company, announced it had reached agreement with South Australian Investments Limited (“SAIL”) and SABC Project Management Pty Limited (“SABC”) to repay loans through the allotment of voting shares in Pure to SAIL and SABC.
SAIL and SABC were wholly-owned subsidiaries of Shawfield Overseas Limited, a “Bearer Share Certificate” company registered in the British Virgin Islands. Dennis Davies was the sole director of both SAIL and SABC. Neither SAIL nor SABC owned shares in Pure at the time.
Under the proposed allotment, SAIL would acquire 35 million new shares at $0.05 per share, being a total of $1,750,000 and SABC would acquire 19.2 million shares at $0.05 per share, being a total of $960,000. The amounts owing to Pure for the allotment would be used to offset the debts owed to SAIL and SABC.
After the allotment of these shares, SAIL would hold 37.2% of the voting rights in Pure and SABC would hold 20.4%. Mr Davies, as the controller of SAIL and SABC, would be the controlling shareholder with 57.6% of Pure. As a consequence, shareholder approval for the allotments was required under rule 7(d) of the Code.
PWC prepared a rule 18 independent adviser’s report on the merits of the proposed acquisition.
Outcome of the shareholder meeting is unknown.