Transaction Type: Company meeting (Allotment)
Allottee: Carter Holt Harvey Limited
Independent Adviser(s): Ferrier Hodgson (Rule 18)
Date of meeting: 27/09/2002
On 28 June 2002, shareholders of Straightedge Limited (Straightedge) approved the issue of 4 million shares at $0.50 per share in Straightedge to Carter Holt Harvey Limited (CHH), as part of the consideration for the sale and purchase of the “Straightedge Division” from CHH (the Sale and Purchase Agreement). At the time, CHH held 10% of the voting rights in Straightedge. The proposed allotment represented approximately 22% of the total issued ordinary shares of Straightedge.
At the same meeting, Straightedge shareholders approved a public issue of up to 11 million shares at $0.50 per share to raise $5 million in working capital (the Public Offer). Subject to shareholder approval, CHH would take up any shortfall , not exceeding 6 million shares, up to the minimum level of $4.1 million.
As a result of the proposed allotments, the maximum percentage of voting securities in Straightedge held or controlled by CHH could be around 74.64%.
Rules 7(d) and 16(b) of the Code require the notice of meeting to contain particulars of the voting securities to be allotted. As the Public Offer was still open for acceptance, specific details of the number and percentage of shares to be allotted to CHH could not be determined prior to the shareholders’ meeting. As such, Straightedge was unable to comply with the rule 16(b) of the Code. The Panel granted exemptions to CHH from rule 7(d), and Straightedge from rule 16(b) for those securities acquired by CHH as a result of the Public Offer, the underwriting agreement and Sale and Purchase Agreement.
At the meeting on 27 September 2002, Straightedge shareholders approved the allotments to CHH.
Ferrier Hodgson prepared a rule 18 independent adviser’s report on the merits of the allotments.