Ann: WAV/RULE: ARG: ARG - Application for Waiver

• Release Date: 02/02/12 19:01
• Summary: WAV/RULE: ARG: ARG - Application for Waiver from Listing Rules
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ARG
02/02/2012 17:01
WAV/RULE

REL: 1701 HRS Argosy Property Trust

WAV/RULE: ARG: ARG - Application for Waiver from Listing Rules

NZX Markets Supervision Decision
Argosy Property Trust
Application for Waiver from Listing Rules 9.2, 7.6.5, 8.3.1, 5.1.1, 5.2.1,
5.2.2 (b),
7.1.5 (c), 7.1.10 and 7.1.13 and 3.4.3

Background
1. Argosy Property Trust ("ARG") is a unit trust under the Unit Trusts Act
1960 ("Act") with ARG Units ("ARG Units") quoted on the NZSX and subject to
the NZSX Listing Rules ("Rules").

2. The trustee of ARG is The New Zealand Guardian Trust Company Limited (the
"Trustee").

3. On 30 August 2011, ARG completed a transaction to internalise the
management of ARG (the "Internalisation"). The Internalisation had been
previously approved by ARG unitholders.  The Internalisation included the
following elements:

a. the company previously called Argosy Property Management Limited (the
"Previous Manager"), which is wholly owned by a subsidiary of ANZ National
Bank Limited, was replaced as manager by the company now called Argosy
Property Management Limited (the "Manager"), the sole share in which is held
by Public Trust;
b. the provisions of the Trust Deed relating to the payment of management
fees to the manager of ARG were deleted, so that the management fees are no
longer payable; and
c. ARG paid a sum of approximately $20 million to the Previous Manager.
4. ARG now proposes to corporatise ARG, so that ARG will cease to be a unit
trust and become a company, and ARG unitholders will cease to hold units and
become shareholders in a new company called Argosy Property Limited ("APL"),
subject to receiving approval of ARG unitholders (the "Corporatisation").

5. The Corporatisation will proceed as follows:
a. On incorporation APL will have one share held jointly by two directors of
the Manager. The Directors of the Manager and APL will be the same;
b. APL will acquire 99 units in ARG and a wholly owned subsidiary of APL will
acquire one unit in ARG (the "APL Units");
c. the two Directors who hold the share in APL will transfer that share to
the Trustee;
d. the shares of the Trustee's nominee which holds ARG's assets, and all of
the other interests of the Trustee in the assets and liabilities of the
Trust, will be transferred to APL;
e. APL will pay the purchase price by:
i.  issuing to the Trustee (or a nominee of the Trustee) a number of shares
(the "APL Shares") equal to the number of ARG Units held by ARG unitholders
(other than holders in jurisdictions outside New Zealand and Australia
("Overseas Holders" and the holders of the APL Units); and
ii. paying to the Trustee (or a nominee of the Trustee) an amount of cash
equal to the amount to be paid to Overseas Holders on redemption of their ARG
Units.
f. The Manager will then redeem all of the ARG Units other than the APL Units
("Redemption"). Unitholders other than Overseas Holders will receive a number
of APL Shares in exchange for an equal number of their ARG Units. Overseas
Holders will receive a cash amount in exchange for their ARG Units, which
will reflect the value of their ARG Units, instead of APL Shares. Other than
with regards to the Overseas Holders, the Redemption is intended to result in
APL having virtually identical shareholders (and relative control
percentages) as the ARG unitholders immediately prior to the Corporatisation;

g. MFL Mutual Fund limited ("MFL") holds 22.35% of the ARG Units ("MFL
Units"). The Manager will redeem all MFL Units in consideration for the
transfer of APL Shares. This transfer will be completed prior to the transfer
of APL Shares to other ARG unitholders, to ensure  that the Takeovers Code
does not apply. However, the redemption of MFL's ARG Units and the redemption
of the remaining unitholders' ARG Units (other than Overseas Holders) will
occur in sequence on the same day;
h. APL will also acquire from Public Trust the sole share in the Manager for
a sum of $1.00;
i. APL will make application for the APL Shares to be quoted on the NZSX; and

j. The Corporatisation will result in the transfer of the assets and
liabilities of ARG to APL. ARG will be wound up in due course and any
remaining assets will be distributed to APL.
6. ARG is seeking waivers from the Rules 3.4.3, 5.1, 5.2, 7.1, 7.6.5, 8.3.1
and 9.2, in respect of the Corporatisation.
Application 1 - Rule 9.2
7. Rule 9.2.1 requires Material Transactions with Related Parties to be
approved by an Ordinary Resolution.

8. APL will be a Related Party of ARG in terms of Rule 9.2.3 because:
a. the Directors of the Manager are treated as Directors of ARG in terms of
paragraph (b) of the definition of "Director" in Rule 1.6.1;
b. the Directors of APL and the Directors of the Manager will be the same
people; and
c. APL is an Associated Person of each of its Directors (Rules 1.8.3(a) and
1.8.5).
9. In addition, various parties to the transaction such as MFL, and ARG
unitholders who are Directors of the Manager or are Associated Persons of a
Director of the Manager, are Related Parties of ARG.

10. The Corporatisation will be a Material Transaction, as:
a. the value of ARG's assets less liabilities which are to be transferred to
APL exceed 10% of the market capitalisation of ARG; and
b. APL will indemnify the Trustee in respect of all liabilities of, or
incurred by, the Trustee or its directors, officers, employees and agents.
This is in addition to the Trustee's current indemnity out of the trust fund
of ARG ("Trust Fund") and reflects the fact that, after Corporatisation there
will be little or no assets left in the Trust Fund to meet any liability
incurred by the Trustee. This indemnity could exceed 10% of the market
capitalisation of APL and would qualify as a Material Transaction under Rule
9.2.
11.  ARG has approached NZX Market Supervisions ("NZXMS") for a waiver from
Rule 9.2.1 in respect of the Corporatisation.

12. In support of its application for a waiver from Rule 9.2, ARG submits
that:
a. The Directors of the Manager are involved as shareholders and Directors of
APL only to facilitate the Corporatisation. They have no personal financial
interest in the transaction (other than as ARG unitholders in which case
their interests are identical to other ARG unitholders).  In terms of
footnote 1 to rule 9.2.1, the personal involvement or personal interest of
the directors is immaterial, and plainly unlikely to have influenced the
proposal or its terms and conditions.
b. There is no transfer of value or potential transfer of value from ARG to a
Related Party. Before and after the transactions the ownership of the ARG
assets will be in the hands of the same people, who were earlier ARG
unitholders and now will become APL shareholders (other than the Overseas
Holders).
c. All unitholders, (except for Overseas Holders and the holders of the APL
Units), whether or not they are Related Parties, will be treated identically.

d. In respect of the indemnity referred to in 10(b) above, investors in APL
will be in the same position after Corporatisation as before.  Before
Corporatisation, as unitholders they effectively bear any amount payable
under the indemnity in the Trust Deed in favour of the Trustee.  After
Corporatisation, they will as shareholders bear the same amount in respect of
liabilities which the Trustee incurred before Corporatisation if, and only
if, the Trustee was entitled to be indemnified for that amount under the
Trust Deed.  Again, there is no transfer of value.  The proposal to grant the
indemnity will be disclosed in the material sent to unitholders in the notice
of meeting.
e. The purpose of Rule 9.2 is to govern transactions where the issuer may be
influenced by a Related Party to undertake a transaction which is unduly
favourable to that Related Party.  That is irrelevant in the present case.
Rule 9.2
13. The relevant parts of Rule 9.2 provide:
9.2.1 An Issuer shall not enter into a Material Transaction if a Related
Party is, or is likely to become:
a. a direct or indirect party to the Material Transaction, or to at least one
of a related series of transactions of which the Material Transaction forms
part; or
b. in the case of a guarantee or other transaction of the nature referred to
in paragraph (d) of the definition of Material Transaction, a direct or
indirect beneficiary of such guarantee or other transaction,
unless that Material Transaction is approved by an Ordinary Resolution of the
Issuer.
Footnote 1
NZX may waive the requirement to obtain the approval of a resolution for the
purposes of Rule 9.2.1 if it is satisfied that the personal connections with,
or involvement or personal interest of a Related Party are immaterial or
plainly unlikely to have influenced the promotion of the proposal to enter
into the transaction or its terms and conditions.
9.2.2 For the purpose of Rule 9.2.1., "Material Transaction" means a
transaction or a related series of transactions whereby an Issuer:
a. purchases or otherwise acquires, gains, leases (as lessor or lessee) or
sells or otherwise disposes of, assets having an Aggregate Net Value in
excess of 10% of the Average Market Capitalisation of the Issuer....
b. enters into any guarantee, indemnity, underwriting, or similar obligation,
or gives any security, for or of obligations which could expose the Issuer to
liability in excess of 10% of the Average Market Capitalisation of the
Issuer; or
9.2.3 For the purposes of Rule 9.2.1, "Related Party" means a person who is
at the time of a Material Transaction, or was at any time within six months
before a Material Transaction:
a. a Director or executive officer of the Issuer or any of its Subsidiaries;
or
b. the holder of a Relevant Interest in 10% or more of a Class of Equity
Securities of the Issuer carrying Votes; or
c. an Associated Person of the Issuer or any of the persons referred to in
(a) or (b), other than a person who becomes an Associated Person as a
consequence of the Material Transaction itself (or an intention or proposal
to enter into the Material Transaction itself);or
 9.2.4 Rule 9.2.1 shall not apply to:
  .........
 (b) the issue, acquisition or redemption by an Issuer of Securities of that
Issuer, or the giving by an Issuer of financial assistance for the purposes
of, or in connection with, the purchase of Securities, or the payment of a
distribution to holders of Securities, if all holders of Securities of the
Class in question are treated in the same way, so that each such holder has
an opportunity to receive the same benefit in respect of each Security held
by that holder except to the extent that an issue excludes holders outside
New Zealand in accordance with Rule 7.3.4 (h). For the purposes of this
praragraph, the transfer, by an Issuer which is a company registered under
Companies Act 1993, of shares held by that company in itself, shall be deemed
to constitute an issue of Securities; or
Decision
14. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants ARG a waiver from Rule 9.2 to allow
ARG to enter into the Corporatisation without seeking the approval of ARG
unitholders by an Ordinary Resolution in accordance with that Rule.
Reasons
15. In coming to the decision to grant ARG a waiver from Rule 9.2, NZXMS has
considered that:

a. The mischief that Rule 9.2.1 seeks to prevent is the undue influence by a
Related Party on an Issuer's decision to undertake a transaction favourable
to that Related Party. This is not present in relation to the
Corporatisation;

b. ARG has submitted, and NZXMS has no reason not to accept, that the Related
Parties to the Corporatisation, being APL, the Directors of the Manager, the
Associated Persons of those Directors who are ARG unitholders and MFL, have
no personal interest in the Corporatisation except as holders of ARG Units.
Accordingly, the interests of those Related Parties is identical to the
interests of the other ARG unitholders;

c. ARG unitholders will have an opportunity to consider and vote on the
Corporatisation; and

d. Except for Overseas Holders and the holders of the APL Units, all ARG
unitholders are treated in the same way under the Corporatisation. There is
no transfer of value from ARG unitholders as all the assets of ARG will be
transferred to APL during this transaction and all ARG unitholders (except
Overseas Holders and the holders of the APL Units) will become APL
shareholders.

Application 2 - Rules 7.6.5 and 8.3.1

16. Overseas Holders comprise approximately 0.57% of all ARG unitholders and
hold 0.2250% of the ARG Units. Under the Corporatisation, Overseas Holders
will receive cash rather than APL Shares in respect of their ARG Units. The
cash amount to be paid to the Overseas Holders will be calculated based on
the weighted average price of ARG Units on the NZSX over the five days on
which trading in Units actually occurs on NZSX most recently before the
record date for the Redemption less withholding taxes (if any).

17. For completeness, Overseas Holders, and the holders of the APL Units,
will be sent the notice of meeting and will be entitled to attend and vote
(in person or by proxy) at the meeting.  However the Overseas Holders will
not be entitled to receive APL Shares in exchange for their ARG Units, and
thus will not be made an offer of APL Shares for the purposes of the
securities laws of their jurisdictions.

18. The reason for not redeeming the units held by the holders of the APL
Units is to enable ARG to continue in existence after the Corporatisation is
complete (otherwise ARG would have no unitholders), thereby enabling an
orderly wind up of ARG in due course.  In addition, APL is the holder of all
the assets and liabilities that ARG formerly held.  During the course of the
winding up, residual assets and liabilities may be determined, and it is
proper that those assets and liabilities pass to APL (as part of ARG's
winding up). The holders of the APL Units  will consent to the
Corporatisation.

19. As Overseas Holders will receive cash rather than APL Shares for their
ARG Units, ARG is of the view that Overseas Holders, the holders of the APL
Units and other ARG unitholders, would be separate groups for the purposes of
Rules 7.6.5 and 8.3.1.

20. ARG seeks a waiver from Rule 7.6.5, to allow all ARG unitholders
(including the holders of the APL Units and Overseas Holders) to approve the
Corporatisation (which includes the Redemption) as one group.

21. ARG also seeks a waiver from Rule 8.3.1 to allow all ARG unitholders
(including the holders of the APL Units and Overseas Holders) to approve the
Corporatisation as one group without the need for separate resolutions from
each group and to pass an extraordinary resolution to authorise an amendment
of the trust deed by the Trustee and the Manager to do everything necessary
to effect Corporatisation.

22. In support of the applications referred to in paragraphs 20 and 21 above,
ARG submits that:

a. the reason for treating Overseas Holders differently to the other ARG
unitholders is the risk of breaching securities laws in the 17 jurisdictions
outside Australia and New Zealand (the "Other Jurisdictions") if an offer is
made in those jurisdictions.  In addition, if there are compliance
requirements in the Other Jurisdictions, the cost, time and administrative
effort of complying with those requirements may also be very considerable.
If compliance with the laws of the Other Jurisdictions were required, it is
likely that the Corporatisation proposal would be materially complicated and
delayed, and possibly might not proceed at all;

b. if a separate resolution of unit holders in Other Jurisdictions is
required  (requiring a 75% majority) it is certainly possible that it would
not be passed, and the Corporatisation would not proceed.

c. A waiver from the obligation to obtain separate approval of holders in
Other Jurisdictions is analogous to an existing exception in Rule 7.3.4(h).
This exception allows an Issuer to be exempt from the requirement to
proportionately issue Equity Securities where the issue would be in a
jurisdiction outside of New Zealand where legal requirements would make it
unduly onerous for the Issuer to make the offer in that jurisdiction.  ARG
considers a waiver in these circumstances is analogous to Rule 7.3.4(h). ARG
submits that a key principle underlying Rule 7.3.4(h) is that the vast
majority of holders of Equity Securities should not be disadvantaged by an
inability to proceed with an offer or issue of securities if the requirements
of Rule 7.3.4(a), (b) or (c) cannot practicably be met due to an inability to
issue or offer securities to holders in overseas jurisdictions where
compliance with local securities law is practically impossible or unduly
onerous;

d. ARG submits that it would be appropriate for the waiver to be conditional
upon the number of ARG Units  to be redeemed for cash to be limited to no
more than 1% of all ARG Units on issue on the date that the waiver is
granted.
 Rules
23. The relevant part of Rule 7.3.4 provides that:
... the Issuer shall be entitled:
...
(h) to not offer or issue Equity Securities to holders of existing Securities
in a jurisdiction outside New Zealand if the legal requirements of that
jurisdiction are such that it is unduly onerous for the Issuer to make the
offer in that jurisdiction provided that in the case of Renounceable Rights,
the Issuer shall arrange the sale of any Renounceable Rights to the relevant
Equity Securities and to account to holders in that jurisdiction for the
proceeds.

24. Rule 7.6.5 provides:
An Issuer may acquire or redeem Equity Securities under Rule 7.6.1(d), or
give financial assistance under Rule 7.6.3(b), if the precise terms and
conditions of the specific proposal (the "Proposal") to acquire or redeem
those Equity Securities, or of the giving of that financial assistance, have
been approved by separate resolutions (passed by a simple majority of Votes)
of members of each separate group of each Class of Quoted Equity Securities
of the Issuer whose rights or entitlements are materially affected in a
similar way by the Proposal.
25. Rule 8.3.1 provides:
Every Issuer shall comply with the provisions of sections 116 and 117 of the
Companies Act 1993, whether or not the Issuer is a company registered under
that Act. For the purposes of this Rule 8.3.1, those sections shall be deemed
to be modified so that:
a. references in those sections to "shares" shall (subject to Rule 8.3.2) be
deemed to include references to all Equity Securities of that Issuer, and
references to "shareholders" shall be read accordingly; and

b. in respect of Issuers which are not companies registered under the
Companies Act 1993, references to the "company" shall be deemed to be
references to the Issuer, and references to pre-emptive rights under section
45 of that Act shall be deemed to be deleted from those sections; and

c. in respect of Equity Securities which are not shares of a company
registered under the Companies Act 1993:
i. references to a special resolution shall be deemed to be references to a
resolution approved by a majority of 75% of votes of the holders of those
Securities entitled to vote and voting; and
ii. references to the constitution shall be deemed to be references to the
document which governs the rights of those Equity Securities.
26. Section 117 of the Companies Act provides that:

117(a) A company must not take action that affects the rights attached to
shares unless that action has been approved by a special resolution of each
interest group.

27. Section 116 of the Companies Act defines "interest group" as:
interest group, in relation to any action or proposal affecting rights
attached to shares, means a group of shareholders whose affected rights are
identical; and whose rights are affected by the action or proposal in the
same way; and subject to subsection 2(b) of this section, who comprise the
holders of one or more classes of shares in the company.
Decision
28. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants ARG waivers from the requirement of
Rules 7.6.5 and 8.3.1 to allow all ARG unitholders to vote on the
Corporatisation proposal as one group and to pass an extraordinary resolution
to authorise an amendment of the trust deed, permitting the Trustee and the
Manager to do everything necessary to effect Corporatisation, on the
condition that as at the earlier of the date that this waiver decision is
announced or the date that the Corporatisation is announced, the number of
units held by unitholders whose addresses are in Other Jurisdictions does not
exceed 1% of all ARG Units.
Application 2 - Reasons
29. In coming to the decision to grant the waivers contained in paragraph 28
above, NZXMS has considered:

a. the policy of the requirement in Rule 7.6.5, that the Redemption be
approved by all holders whose rights and entitlements are materially affected
in a similar way, is designed to prevent the approval of a transaction by a
group of holders that would unfairly advantage that group to the detriment of
other holders;

b. the valuation mechanism (VWAP) for the ARG Units held by Overseas Holders
who will receive cash is an objective measure, serving to ensure that
Overseas Holders obtain fair value for their ARG Units;

c. ARG submits, and NZXMS has no reason not to accept, that the cost of
obtaining advice in the Other Jurisdictions is considerable. As a result,
without a waiver from Rule 7.6.5, the Corporatisation may be delayed or would
not be able to proceed;

d. the condition set out in paragraph 28, above, will ensure that the maximum
number of ARG Units held by ARG unitholders who will be cashed out is not
likely to exceed 1% of ARG Units; and

e. it is appropriate that the rights of minority Equity Security Holders to
participate in a transaction be sensibly balanced against the interests of
the Issuer and all Equity Security Holders by ensuring that an Issuer is able
to complete transactions without undue expense and complication. In this
regard NZXMS notes that the cost of extending the offer to all Overseas
Holders (presuming that this is legally possible) may not be in the best
interests of ARG and the majority of ARG unitholders.
Application 3 - Rules 5.1.1, 5.2.1, 5.2.2 (b), 7.1.5 (c), 7.1.10 and 7.1.13
30. APL will apply for Listing and Quotation of its ordinary shares in
accordance with the relevant Rules.  Although an application for Listing will
be made by APL, given that APL will be materially similar to ARG in a number
of key respects, ARG has requested that NZXMS grant waivers in respect of
certain Listing, Quotation and offering document requirements.

31. In particular, ARG seeks, on behalf of APL, waivers from:

a. Rule 5.1.1, to the extent that an application for Listing shall be made
through a Primary Market Participant acting as an Organising Participant.

b. Rule 5.2.1, to the extent that the Rule requires that an application for
quotation of a class of securities be made through a Primary Market
Participant acting as Organising Participant.

c. Rule 5.2.2(b), to the extent that the Rule requires that an application
for Quotation under Rule 5.2.1 be submitted with evidence that the Primary
Market Participant has sought assurance from NZX that Authority to Act has
not been withdrawn in respect of securities for which quotation is sought.

d. the requirement in Rule 7.1.5(c) that the Corporatisation Offering
Document shall contain in its subscription application a field for
subscribers to insert their CSN number.

e. the requirement in Rule 7.1.10 that the Corporatisation Offering Document,
after stating that application may be made to the Issuer, shall state that
they may be lodged with any Primary Market Participant, the Organising
Participant or any other channel approved by NZX.

f. the requirement in Rule 7.1.13 for the Corporatisation Offering Document
to specify the period within which refunds of subscription money will be
made, and whether or not interest will be paid on amounts refunded to
subscribers.

32. In support of its application ARG submits that:

a. if the waivers are granted this will reduce the cost, time and complexity
associated with compliance with various Listing Rules that contemplate an
application for Listing and/or Quotation:
i. by an entity unknown to NZX and the market; and
ii. in respect of securities that relate to underlying assets that the market
is unfamiliar with.
b. ARG does not consider the granting of the waivers sought in paragraph 31
above will materially adversely affect APL shareholders, NZX or the market.

c. As the offer of APL Shares is being made pro rata to existing ARG
unitholders (other than Overseas Holders and APL) in exchange for redemption
of their units, and no subscription monies are to be received by APL, a
Primary Market Participant acting as Organising Participant is not required
to ensure the success of the Corporatisation.
 Rules
33. The relevant parts of Rule 5.1.1 provide:
  Application shall be made through a Primary Market Participant acting as
Organising Participant.
34. Rule 5.2.1 provides:
5.2.1  An Issuer, or applicant for Listing, may apply to NZX for a Class or
Classes of its Securities to be Quoted on the NZSX or NZDX. Separate
application must be made for each Class of Securities, through a Primary
Market Participant acting as Organising Participant, except that the
application need not be made through an Organising Participant in the case of
an application to Quote a Class of Securities where the Securities to be
Quoted are rights to Securities that are already Quoted.
35. The relevant part of Rule 5.2.2(b) provides:
5.2.2 The following information and material shall be submitted with an
application under Rule 5.2.1:
... evidence that the Primary Market Participant has sought assurance from
NZX that Authority to Act has not been withdrawn in respect of Securities for
which Quotation is sought or a certificate is provided under Rule 7.4 of the
NZX Participant Rules (whichever is applicable); and
36. The relevant parts of Rule 7.1.5(c) provide:
7.1.5  Every Offering Document shall contain:
... (c) in its subscription application a field for subscribers to insert
their CSN number (if any).
37. Rule 7.1.10 provides:
7.1.10 Every Offering Document, after stating that applications may be made
to the Issuer, shall state that they may be lodged with any Primary Market
Participant, the Organising Participant or any other channel approved by NZX
(in that order) in time to enable forwarding to the appropriate place prior
to the application closing date.
38. Rule 7.1.13 provides:
7.1.13 Each Offering Document shall specify:
 a. the period within which a refund of subscription moneys will be made to
applicants for Securities to whom allotments are not made; and
 b. whether or not interest will be paid on amounts refunded in terms of (a)
and, if so, the basis upon which interest will be calculated.
Decision
39. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants APL waivers from:

a. Rules 5.1.1 and 5.2.1, to the extent that those Rules require that an
application for Listing and Quotation of a class of securities be made
through a Primary Market Participant acting as Organising Participant;

b. Rule 5.2.2(b), to the extent that the Rule requires that an application
for Quotation under Rule 5.2.1 be submitted with evidence that the Primary
Market Participant has sought assurance from NZX that Authority to Act has
not been withdrawn in respect of securities for which Quotation is sought;

c. the requirement in Rule 7.1.5(c) that the Corporatisation Offering
Document shall contain in its subscription application a field for
subscribers to insert their CSN number;

d. the requirement in Rule 7.1.10 that the Corporatisation Offering Document,
after stating that application may be made to the Issuer, shall state that
they may be lodged with any Primary Market Participant, the Organising
Participant or any other channel approved by NZX; and

e. the requirement in Rule 7.1.13 for the Corporatisation Offering Document
to specify the period within which refunds of subscription money will be
made, and whether or not interest will be paid on amounts refunded to
subscribers.
Reasons
40. In coming to the decision to grant ARG waivers from Rules 5.1.1, 5.2.1
and 5.2.2(b), NZXMS considered that, as the offer of APL Shares is being made
pro rata solely to existing ARG unitholders in exchange for redemption of
their ARG Units (other than for Overseas Holders and the holders of the APL
Units), and no subscription monies are to be received by APL, a Primary
Market Participant acting as Organising Participant is not required to ensure
the success of the Corporatisation;

41. In coming to the decision to grant ARG a waiver from Rule 5.2.1 and from
Rule 7.1.5(c) NZXMS has considered that the recipients of the APL Shares will
be those recorded on the register of ARG on the Record Date, and new shares
will essentially be issued to these ARG unitholders (other than Overseas
Holders and the holders of the APL Units) pro rata and that there is no
requirement for the ARG unitholders to fill out an application form for the
APL Shares.

42. In coming to the decision to grant ARG a waiver from Rule 7.1.10, NZXMS
has considered that it is unnecessary for an Organising Participant to act in
respect of the Corporatisation.

43. In coming to the decision to grant ARG a waiver from Rule 7.1.13, NZXMS
has considered that no subscription money will be received in respect of the
Corporatisation. Rule 7.1.13 is therefore not applicable to the
Corporatisation.
Application 4 - Rule 3.4.3
44. On 19 July 2011 NZXMS granted ARG a waiver ("Previous Waiver") from Rule
3.4.3 to allow the Directors of the Manager to vote on any resolution
necessary to consider, progress or give effect to the "Internalisation" or
any other proposal or transaction relating to a change to the arrangements
for the management of ARG and to be counted in the quorum for the purposes of
the consideration of such matters.

45. ARG is seeking a waiver from the restrictions in Rule 3.4.3 on the same
basis provided in the Previous Waiver except that, instead of the
"Internalisation" proposed thereunder, ARG is now proceeding with the
Corporatisation.
Rules

46. Rule 3.4.3 provides:

Subject to Rule 3.4.4, a Director shall not vote on a Board resolution in
respect of any matter in which that Director is interested, nor shall the
Director be counted in the quorum for the purposes of consideration of that
matter.  For this purpose, the term "interested" bears the meaning assigned
to that term in section 139 of the Companies Act 1993, on the basis that if
an Issuer is not a company registered under that Act, the reference to the
"company" in that section shall be read as a reference to the Issuer.

47. The Companies Act 1993 defines "interested" to include the following:

139(1) For the purposes of this Act, a director of a company is interested
in a transaction to which the company is a party if, and only if, the
director

... (c) is a director, officer, or trustee of another party to, or person who
will or may derive a material financial benefit from, the transaction, not
being a party or person that is--

(i)  the company's holding company being a holding company of which the
company is a wholly-owned subsidiary; or

(ii) a wholly-owned subsidiary of the company; or

(iii)  a wholly-owned subsidiary of a holding company of which the company is
also a wholly-owned subsidiary;
Decision
48. On the basis of the decision granted in the Previous Waiver and on the
basis that the information provided to NZXMS is complete and accurate in all
material respects, NZXMS hereby grants ARG a waiver from Rule 3.4.3 to allow
the Directors of the Manager to vote, and be counted in the quorum at a
meeting of the ARG Board on any resolution necessary to consider, progress or
give effect to the Corporatisation.
Reasons
49. In coming to the decision to grant ARG the waiver in respect of Rule
3.4.3, NZXMS has considered that:

a. the policy behind Rule 3.4.3 is to prevent situations arising whereby
Directors who have a vested interest in a transaction may authorise the entry
into, or implementation of, matters that are detrimental to the interests of
shareholders as a result of that "interest";

b. the "interest" of the Directors of the Manager in this instance arises by
virtue of the unique operating and management arrangement of a unit trust;
and

c. unit holders of ARG will have the opportunity to consider and vote on the
Corporatisation and other proposals affecting the management of ARG in
accordance with the relevant provisions of the Act and the Rules.
Confidentiality
50. ARG has submitted that this decision, and the information contained
within this decision, are confidential and commercially sensitive. ARG
requests that this decision remains confidential until the Corporatisation
Offering Document is distributed to ARG unitholders.

51. NZXMS grants ARG's request for confidentiality, as it accords with the
policy of Rules 1.11.2 and 1.11.4 and the footnotes to those Rules.
ENDS.
End CA:00219136 For:ARG    Type:WAV/RULE   Time:2012-02-02 17:01:06