IQE
23/09/2014 14:45
WAV/RULE
REL: 1445 HRS Intueri Education Group Limited
WAV/RULE: IQE: IQE - Application for Waiver from Rule 5.2.3
NZX Regulation Decision
Intueri Education Group Limited (IQE)
Application for a waiver from NZX Main Board Listing Rule 5.2.3
23 September 2014
Background
Decision
1. On the conditions set out in paragraph 2 below, and on the basis that the
information provided by IQE is complete and accurate in all material
respects, NZX Regulation ("NZXR") grants IQE a waiver from NZX Main Board
Listing Rule ("Rule") 5.2.3 for a period of eight months from the date of
this waiver to allow IQE to have fewer than 500 Members of the Public holding
at least a Minimum Holding.
2. The waiver in paragraph 1 above is provided on the following conditions:
a.for the period of the waiver at least 300 Members of the Public hold
Shares;
b.IQE consistently monitors the total number of Members of the Public holding
shares in IQE and the percentage of the total shares held by Members of the
Public holding at least a Minimum Holding and provides NZXR with an update
every two months during the period of the waiver;
c.The waiver and its effect must be clearly disclosed in any offer documents
relating to any offer of securities undertaken by IQE during the period of
the waiver;
d.IQE clearly and prominently discloses the waiver, its conditions, and its
implications in its half-year report and its annual report; and
e.IQE notifies NZXR if there are any material changes to the total number of
Members of the Public holding shares in IQE and/or to the percentage of the
total shares held by Members of the Public holding at least a Minimum
Holding.
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 Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
5. In coming to the decision to provide the waiver set out in paragraph 1
above, NZXR has considered that:
a. the purpose of Rule 5.2.3 is to promote a liquid market which is important
to ensure efficient price setting and to enable shareholders to trade;
b. IQE currently has approximately 300 shareholders who are Members of the
Public, holding approximately 70 - 75% of the Shares. NZXR is satisfied that
IQE will maintain a spread of Security holders which is sufficient to ensure
a liquid market and that the granting of this waiver will not adversely
affect holders of the Shares;
c. IQE meets the requirement that more than 25% of the Shares are held by
Members of the Public;
d. although on the date of Quotation, IQE did not meet the requirement to
have 500 shareholders who are Members of the Public, IQE has submitted, and
NZXR has no reason not to believe, that market interest in IQE will increase
over time and this should lead to an increase in the number of shareholders
who are Members of the Public;
e. the waiver is for a period of eight months which, taken together with the
waiver granted to IQE dated 22 May 2014, would give IQE 12 months from the
date of the IPO to take steps to increase its spread of Security holders.
NZXR considers that this will give IQE sufficient time to take steps to meet
its requirement to have 500 shareholders who are Members of the Public; and
f. the condition that IQE includes in its offering documents, its half-year
report and annual report the waiver and its implications will result in a
fully informed market.
ENDS
Appendix One
1. Intueri Education Group Limited ("IQE") recently undertook an initial
public offer of Equity Securities ("Shares") on the NZX Main Board on 23 May
2014.
2. IQE has advised NZX Regulation ("NZXR") that as at 19 September 2014, 306
Members of the Public hold Shares in IQE. IQE has advised that it remains
confident that the percentage of IQE's shares held by Members of the Public
remains in excess of the 25% requirement under Rule 5.2.3, with the exact
figure likely to be within the 70% to 75% range.
3. Rule 5.2.3 provides that a Class of Securities will generally not be
considered for Quotation on the NZX Main Board unless those Securities are
held by at least 500 Members of the Public holding at least 25% of the
Securities of that Class issued.
4.IQE has applied for a waiver from Rule 5.2.3 for a period of 12 months from
the date of expiry of its waiver granted on 22 May 2014.
5. In support of its application for waiver IQE submits that:
a. Although IQE represented a new sector in New Zealand's public markets at
the time of its IPO (with the result that institutional demand exceeded
retail demand), IQE continues to expect that retail demand will increase over
time (with a consequent expansion in IQE's share register), including as a
result of:
(i) Improved market profile (underpinned by IQE's share price appreciation,
and financial performance in line with forecast, since listing);
(ii) Additional research coverage of IQE and the education sector in general;
(iii) The further publication of IQE's financial results (to date, IQE has
only announced its interim results for the year ending 30 June 2014, but a
waiver would allow IQE to report its results for the full year ending 31
December 2014); and
(iv) Retail investor engagement initiatives being undertaken by IQE,
including a programme of engagement with New Zealand and Australian retail
brokers and the New Zealand Shareholders' Association.
b. A significant proportion of IQE's shares are held by institutional
investors, which IQE expects to result in on-going strong liquidity, an
expectation backed by the strong trading in IQE's shares since listing;
c. As IQE noted when announcing its interim results, it is currently
evaluating a range of potential acquisition opportunities, which could result
in IQE issuing further shares to raise capital, and which, if it occurred,
should further enhance liquidity and IQE's attractiveness to investors;
d. IQE is currently considering establishing an employee share ownership
scheme, which would result in additional shares being issued to Members of
the Public (namely IQE employees);
e. There is no significant concentration of ownership of IQE's Shares, beyond
the (currently escrowed) 24.9% shareholding held by Intueri Education
Holdings Pty Limited ("IEHPL"), of which IQE was a wholly owned subsidiary
prior to listing;
f. IEHPL may seek to sell down all or part of its shareholding following the
expiry of escrowed arrangements in early 2016, which, if it occurred, could
be expected to result in increased spread at that time;
g. The active trading in IQE's shares since listing, and the growth in IQE's
share price (approximately 36.2% as at the close of trading on 22 September
2014) indicates that a liquid and well-functioning market exists for its
shares; and
h. Given the liquid and positive trading in IQE's shares since listing,
suspension or delisting would not be in the interests of shareholders, IQE or
NZX.
Appendix Two
Rule 5.2 - Quotation of Securities
5.2.3 - A Class of Securities will generally not be considered for Quotation
on the NZSX or NZDX unless those Securities are held by at least 500 Members
of the Public holding at least 25% of the number of Securities of that Class
issued, with each Member of the Public holding at least a Minimum Holding,
and those requirements are maintained, or NZX is otherwise satisfied that the
Issuer will maintain a spread of Security holders which is sufficient to
ensure that there is a sufficiently liquid market in the Class of Securities.
Rule 1.6 - Interpretation
Members of the Public means, in relation to an Issuer and/or Securities of an
Issuer, any person other than:
a) a person who holds, or who is one of a group of Associated Persons who
together hold, 10% or more of a Class of Securities; or
b) a person who has, or who is one of a group of Associated Persons who
together have, the power (whether contingent or not) to appoint one or more
Directors of the Issuer; or
c) any other person or member of a class of persons, whom NZX in its
discretion declares not to be a Member of the Public for the purposes of the
Rules.
End CA:00255585 For:IQE Type:WAV/RULE Time:2014-09-23 14:45:33
