Basically CAD can discount the shares in the cr to a limit of 25% of the vwap from the last 15 days trading.
Cheers
Tradealot
7 - Listing rule 7.1A.3: discount limitation.
7.1 - Securities issued under listing rule 7.1A can only be in an existing quoted class
Under listing rule 7.1A.3, securities issued under listing rule 7.1A must belong to a class of equity securities already quoted. Listing rule 7.1A cannot be used for placements of securities in a class that has not yet been quoted.
7.2 - 25% limit on discount to volume weighted average price at time of issue
The issue price of securities issued under listing rule 7.1A must be no lower than 75% of the volume weighted average price for securities in the relevant quoted class calculated over the 15 trading days on which trades in that class were conducted immediately before either:
(a) the date on which the securities are issued; or
(b) the date on which the price of the securities is agreed, provided that the issue is thereafter completed within 5 business days.
Setting the maximum discount by reference to a VWAP figure calculated over a period of 15 trading days should limit the potential for securities to be issued under listing rule 7.1A at a discount to a short term low market price.
In recognition of the market practice that a listed entity and potential allottees of securities will come to an agreement about the issue price of the securities a short time before the issue actually takes place, and that they must be able to tell whether the price that they have agreed complies with the listing rule, the maximum discount can be calculated by reference to the VWAP over the 15 trading days on which trades in the equity securities were recorded before the agreement is reached. In this case, the issue must be completed (that is, payment for the securities must be received, and the securities issued into the electronic holdings of the allottees) within 5 business days after the agreement of the issue price. Otherwise the calculation must be performed by reference to the 15 trading days on which trades were recorded before the issue date.
7.3 VWAP calculations.
VWAP calculations can be provided by ASX Customer Service and other third party service providers. A listed entity may use any recognised information service provider as the source of its VWAP calculation.
The VWAP calculation, and the source used, must be disclosed when an issue securities under listing rule 7.1A is announced. A new item 6g has been included in the Appendix 3B for disclosing this information.
7.4 - Issue of securities under listing rule 7.1A for non-cash consideration: calculation of value of the non-cash consideration
If a listed entity has disclosed in the notice of AGM under listing rule 7.3A.4 that it may issue some of the securities under listing rule 7.1A for non-cash consideration, then securities may be issued under that rule as scrip consideration for the acquisition of assets. The entity must still comply with the minimum issue price limitation under listing rule 7.1A.3 in relation to such issues. This means that the entity must determine the value of the asset being acquired by the issue of securities, and must demonstrate that the deemed issue price of any securities issued in consideration of that asset (the value of the non-cash consideration divided by the number of securities issued) is no lower than 75% of the VWAP calculated over the 15 trading days on which trades in the securities are recorded immediately before the securities are issued.
The valuation may be provided by an independent expert, or by the directors of the listed entity if they have appropriate expertise to carry out the valuation of the asset, and their report contains a similar level of analysis to that which would be expected in an independent expert’s report.
The listed entity must release to the market a valuation of the non-cash consideration. It must be released to the market before the issue of securities. ASX may ask the listed entity to submit its valuation of the asset to the scrutiny of another independent expert (see listing rule 18.7).
On the amended Appendix 3B, new item 6h reminds the listed entity that it must have disclosed the valuation of the non-cash consideration.
