Ann: WAV/RULE: ALF: ALF - Waivers from NZX Main Board Listing Rules

• Release Date: 06/11/15 15:06
• Summary: WAV/RULE: ALF: ALF - Waivers from NZX Main Board Listing Rules
• Price Sensitive: No
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					ALF
06/11/2015 15:06
WAV/RULE
NOT PRICE SENSITIVE
REL: 1506 HRS Allied Farmers Limited

WAV/RULE: ALF: ALF - Waivers from NZX Main Board Listing Rules

NZX Regulation Decision
Allied Farmers Limited (ALF)
Application for waivers from NZX Main Board Listing Rules 6.2.2(b) and
9.2.5(b)

6 November 2015

Waivers from NZX Main Board Listing Rules 6.2.2(b) and 9.2.5(b)
Decision
1. Subject to the conditions set out in paragraph 2 below, and on the basis
that the information provided by ALF is complete and accurate in all material
respects, NZX Regulation ("NZXR") grants ALF waivers:
a. from NZX Main Board Listing Rule ("Rule") 6.2.2(b), to the extent that
this Rule would require an Appraisal Report to accompany ALF's notice of
meeting for its AGM ("Notice"); and
b. from Rule 9.2.5(b), to the extent that this Rule would require an
Appraisal Report to accompany ALF's Notice.
2. The waiver in paragraph 1 is provided on the conditions that:
a. ALF obtains an independent valuation report for NZFL, which will be
prepared by a person approved by NZXR;
b. ALF releases the Valuation Report to the market via the Market
Announcement Platform no later than the time that the Notice is posted to
ALF's shareholders;
c. ALF includes links in the Notice to where ALF shareholders can view the
Valuation Report on both ALF's website and NZX.com;
d. ALF provides a copy of the Valuation Report to each shareholder who
requests it, and the Notice includes details of how shareholders can request
the Valuation Report, by telephone and email;
e. the terms of the Share Sale Agreement are sufficiently disclosed in the
Notice to NZXR's satisfaction;
f. ALF's Directors certify to NZXR that:
i. the terms of the Share Sale Agreement were negotiated on a commercial and
arms' length basis;
ii. the terms of the Share Sale Agreement are fair and in the best interests
of ALF and ALF's shareholders; and
iii. ALF and the Purchaser were not influenced in their decisions to enter
into the Share Sale Agreement by the relationships between ALF, the
Purchaser, and the Related Parties;
g. Stockmans will not receive any additional direct or indirect benefit from
the Share Sale Agreement, other than its receipt of the New Shares under the
terms of the Share Sale Agreement; and
h. the Notice clearly and prominently discloses the waiver and its
implications.
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 Rule to which this decision relates is set out in Appendix Two to this
decision.
5. Capitalised terms which have not been 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. the policy behind Rule 6.2.2(b) is to ensure that shareholders being asked
to vote on resolutions to approve an issue of shares to a Director of the
Issuer, or any of their Associated Persons, receive independent advice on the
issue. In these circumstances, an Associated Person of a Director of a
joint-venture that ALF's Subsidiary is a party to, will be receiving ALF's
ordinary shares in accordance with the Share Sale Agreement. However this
Associated Person is sufficiently removed from ALF, such that it is unlikely
that it will be receiving ALF's shares on terms which are unfair to ALF's
shareholders.  NZXR is comfortable that the policy behind Rule 6.2.2(b) is
not offended by granting this waiver;
b. the policy behind Rule 9.2.5(b) is to ensure that shareholders are
provided with independent advice when being asked to make a decision on a
Material Transaction where a Related Party is a party to that transaction.
ALF has submitted, and NZXR has no reason not to agree, that the Related
Party relationships are of sufficient distance, to the extent that they are
unlikely to have influenced ALF's decision to enter into the Share Sale
Agreement.  NZXR is comfortable that the policy behind Rule 9.2.5(b) is not
offended by granting this waiver;
c. ALF is seeking shareholder approval of the Share Sale Agreement and Share
Issue from shareholders.  It is unlikely that NZFL, Stockmans, Mr Sweeney as
a Director of FMEL, and Mr Carruthers as a Director of NZFL, have influence
over ALF. Therefore requiring the protection provided by independent advice
from an independent adviser report, would be unduly onerous.  The conditions
of the waiver instead, require ALF to provide investors with access to a
valuation report for the NZFL Shares, which will have been prepared by an
independent adviser approved by NZX;
d. the Valuation Report, combined with the Notice, will enable investors to
assess the merits of the Share Sale Agreement. NZXR has had the opportunity
to review ALF's Notice, which includes the resolution to approve the Share
Sale Agreement; and
e. the conditions in paragraph 2(f) and (g) above, provides NZXR comfort that
the Share Sale Agreement was negotiated, agreed to, and entered into on an
arm's length and commercial basis, and that the Share Sale Agreement is fair
to ALF and its shareholders.

Appendix One
1. Allied Farmers Limited ("ALF") is a Listed Issuer with ordinary shares
Quoted on the NZX Main Board.
2. On or about 2 November 2015, ALF's wholly-owned Subsidiary, Allied Farmers
Rural Limited ("ALFR"), entered into an agreement with Stockmans Holdings
Limited ("Stockmans"), to purchase 950 shares in NZ Farmers Livestock Limited
("NZFL") for $1 million ("Share Sale Agreement").
3. The Share Sale Agreement is expected to settle on or about 4 December 2015
("Settlement Date"), subject to certain conditions being satisfied.
4. ALFR will satisfy its obligations under the Share Sale Agreement once ALF
issues $1 million worth of its ordinary shares to Stockmans ("Share Issue").
The number of ordinary shares under the Share Issue will be determined by the
price of ALF's ordinary shares, which will be the lower of:
a. an issue price of $0.0519 ("Issue Price"), which is the volume weighted
average price of ALF's ordinary shares over the 20 Business Days before 2
November 2015. This will result in ALF issuing 19,267,822 of its ordinary
shares to Stockmans; or
b. the volume weighted average price of ALF's ordinary shares on the Business
Day prior to the Settlement Date.
5. The Share Sale Agreement is conditional on ALF receiving shareholder
approval of the Share Issue pursuant to NZX Main Board Listing Rules ("Rule")
7.3.1(a) and the Share Sale Agreement pursuant to Rule 9.2.1, at its annual
meeting of shareholders on or about 24 November 2015 ("AGM").
6. Campbell Macpherson Limited prepared an independent valuation report for
NZFL ("Valuation Report"). NZX Regulation ("NZXR") approved Campbell
Macpherson Limited to prepare the Valuation Report.
7. NZFL is a company regulated by a shareholders' agreement, as well as a
relationship agreement, between its shareholders ("NZFL Shareholders'
Agreements"). NZFL currently has the following relevant ownership structure:
a. ALFR owns 56.96% of NZFL's ordinary shares;
b. Stockmans owns 27.27% of NZFL's ordinary shares; and
c. Agent Company Limited owns 14.23% of NZFL's ordinary shares.
8. Stockmans is owned in equal shares by Messrs Oliver Carruthers and Bill
Sweeney; they are also Stockmans' two Directors. Accordingly, Stockmans is an
Associated Person of Messrs Carruthers and Sweeney pursuant to Rule
1.8.3(a)(i).
9. Mr Carruthers is a Director and livestock agent of NZFL. Mr Sweeney is
NZFL's Livestock General Manager, as well as a Director of a wholly-owned
NZFL Subsidiary, Farmers Meat Export Limited ("FMEL").
10. ALF's Average Market Capitalisation was approximately $6.9 million as at
2 November 2015. Accordingly, the consideration to be exchanged under the
Share Sale Agreement will be greater than 10% of ALF's Average Market
Capitalisation, resulting in it becoming a Material Transaction under Rule
9.2.2.
11. NZFL is a Subsidiary of ALF, and a direct party to the Share Sale
Agreement. As a result, NZFL is a Related Party of ALF in accordance with
Rules 9.2.3(c) and 1.8.3(a)(ii).
12. Mr Carruthers is a Director of NZFL and Stockmans, and an indirect party
to the Share Sale Agreement. As a result, Mr Carruthers is a Related Party of
ALF in accordance with Rules 9.2.3(a), as well as Rules 9.2.3(c) and
1.8.3(c).
13. Mr Sweeney is a Director of FMEL and Stockmans, and an indirect party to
the Share Sale Agreement. As a result, Mr Sweeney is a Related Party of ALF
in accordance with Rules 9.2.3(a), as well as Rules 9.2.3(c) and
1.8.3(a)(iii).
14. Stockmans is a direct party to the Share Sale Agreement. Given that Mr
Carruthers is a Director of Stockmans and NZFL, and Stockmans is a party to
the NZFL Shareholders' Agreement, Stockmans is a Related Party of ALF in
accordance with Rules 9.2.3(c) and 1.8.3(c).
15. Due to the relationships that Messrs Carruthers and Sweeney have with
ALF, they, and Stockmans, are Related Parties of ALF.  They are either direct
or indirect parties to the Share Sale Agreement; therefore the Share Sale
Agreement requires shareholder approval under Rule 9.2.1.
16. By virtue of Rule 1.6.6, Mr Carruthers is a Director of the Issuer given
that he is a Director of a Subsidiary of ALF. Therefore, the Share Issue to
Stockmans is an issue to an Associated Person of a Director of the Issuer.

Appendix Two
Rule 6.2 Notices of Meeting
Rule 6.2.2 A notice of meeting to consider a resolution of the nature
referred to in Rule 6.2.1 shall be accompanied by an Appraisal Report if:
  [...]
(b) in the case of an issue, the issue is intended or is likely to result in
more than 50% of the Securities to be issued being acquired by Directors or
Associated Persons of Directors of the Issuer; or
Rule 9.2 Transactions with Related Parties
Rule 9.2.5 The text of any resolution to be put to a meeting of an Issuer for
the purposes of Rule 9.2.1 shall be set out in the notice of the relevant
meeting.  That notice shall:
  [...]
  (b) be accompanied by an Appraisal Report; and
End CA:00273000 For:ALF    Type:WAV/RULE   Time:2015-11-06 15:06:09