30 Jun 2016, 08:50AM | WAV/RULE
NZX Regulation Decision
Marlborough Wine Estates Group Limited (MWE)
Application for a waiver from Clause 2 of Schedule 1A to the NXT Market Rules
29 June 2016
Waiver from Clause 2 of Schedule 1A to the NXT Market Rules
Decision
1.Subject to the conditions set out in paragraph 2 below, and on the basis that the information provided by MWE is complete and accurate in all material respects, NZX Regulation (NZXR) grants MWE a waiver from Clause 2 of Schedule 1A to the Rules for a period of twelve months from 30 June 2016, to the extent that this Rule requires 25% of MWE’s shareholders to be members of the Public holding separate parcels of shares of at least a minimum holding.
2.The proposed waiver in paragraph 1 above is provided on the conditions that:
a. for the period of the waiver MWE has at least 50 shareholders who are Members of the Public holding separate parcels of shares of at least a Minimum Holding, that together represent at least 17% of the shares on issue;
b. MWE clearly and prominently discloses the waiver, its conditions, and the implications in its half-year and annual reports;
c. MWE clearly and prominently discloses the waiver, its conditions, and the implications in the Listing Document and any offer documents relating to any offer of securities undertaken by MWE during the period of the waiver;
d. MWE notifies NZX Regulation as soon as practicable if there are any material changes to the percentage of ordinary shares held by Members of the Public holding at least a Minimum Holding; and
e. MWE consistently monitors the total number of Members of Public holding shares in MWE and the percentage of total shares held by Members of the Public holding at least a Minimum Holding and provides NZX Regulation with an update every six months during the period of the waiver.
3. The information on which this decision is based is set out in Appendix One to this decision. This waiver will not apply if that information is not, or ceases to be, full and accurate in all material respects.
4. The clause to which this decision relates is set out in Appendix Two to this decision.
5. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules.
Reasons
6. In coming to the decision to provide the waiver set out in paragraph 1 above, NZXR has considered that:
a. MWE will on listing have at least 50 shareholders that are Members of the Public. Therefore the number of Members of the Public holding MWE shares will meet the requirements of the clause;
b. the purpose of the clause is to promote a liquid market which is important to ensure efficient price setting and to enable shareholders to trade;
c. the NXT Market Maker arrangements will provide an additional mechanism for liquidity in MWE’s shares, and additional comfort is provided that MWE shareholders will not be disadvantaged;
d. MWE has indicated that MWE’s substantial shareholder, Min Jia, may sell down shares in MWE, or MWE may place shares particularly to Chinese distribution partners as part of its business strategy. This would occur from Min’s free float shares in the restricted trade agreement. This strategy will further increase the number and percentage of MWE shareholders who are Members of the Public;
e. as a growth company, it is likely MWE will seek additional equity capital over time which should enhance liquidity. MWE is currently profitable and does not have an immediate need for material sums of new capital. However, MWE will investigate potential acquisitions and land conversions in the future, which may give MWE a need for material additional capital; and
f. there is precedent for this waiver.
Appendix One
1. Marlborough Wine Estates Group Limited (MWE) has applied to NZX to list as a NXT Company.
2. No initial public offer of equity securities is being made in conjunction with the Listing and Quotation.
3. Clause 2 of Schedule 1A to the NXT Market Rules (Rules) states that to be eligible for Listing an NXT Applicant must have at least 50 shareholders who are Members of the Public holding separate parcels of shares of at least a Minimum Holding, that together represent at least 25% of the shares.
4. On listing MWE expects to have at least 50 shareholders that are Members of the Public holding at least 17.38% of the total ordinary shares on issue.
5. Min Jia, MWE’s founder, director and substantial shareholder has a legal or beneficial interest in 82.62% of MWE’s shares on issue.
6. Min Jia will enter into a restricted security agreement with MWE for 242,984,014 shares. On
the date of quotation of MWE’s ordinary shares, 90% of Mr Jia’s shareholding will be subject to trading restrictions under the restricted security agreement. This percentage will reduce to 75% six months after the Quotation date, and to 65% twelve months after the Quotation date.
Appendix Two
Schedule 1A - Pre-requisites for Listing
To be eligible for listing an applicant must fulfil all the following requirements before listing:
…
2. Have at least 50 shareholders who are members of the public holding separate parcels of shares of at least a minimum holding, that together represent at least 25% of the shares;
Attachments