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

• Release Date: 18/05/15 09:14
• Summary: WAV/RULE: KPG: Waivers from NZX Main Board Listing Rules
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					KPG
18/05/2015 09:14
WAV/RULE
NOT PRICE SENSITIVE
REL: 0914 HRS Kiwi Property Group Limited

WAV/RULE: KPG: Waivers from NZX Main Board Listing Rules

NZX Regulation Decision
Kiwi Property Group Limited (KPG)
Application for waivers from NZX Main Board Listing Rules 7.3.1(a), 7.10.1,
7.10.2, 7.10.8, 7.11.1 and 7.12.2

18 May 2015

Waiver from Rule 7.3.1(a)
Decision
1. On the condition set out in paragraph 2 below, and on the basis that the
information provided to NZX is complete and accurate in all material
respects, NZX Regulation ("NZXR") grants Kiwi Property Group Limited ("KPG")
a waiver from NZX Main Board Listing Rule ("Rule") 7.3.1(a) so that KPG is
not required to obtain shareholder approval for the issue of the New Shares
in connection with the Offer.
2. The waiver in paragraph 1 above is provided on the condition that the
issue of the New Shares is conducted in accordance with Rule 7.3.4(a) (read
in conjunction with Rules 7.3.4(d) to 7.3.4(h)), except for the requirement
in Rule 7.3.4(a) that the Offer is Renounceable.
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. Rule 7.3.1(a) is designed to prevent the dilution of shareholders'
interests without their prior approval. The policy of Rule 7.3.4(a) is that
shareholder approval is not required where all shareholders have the same
entitlement to participate in the issue because those shareholders have the
opportunity to avoid dilution.
b. Rule 7.3.4(a) recognises that an Issuer may make a pro-rata renounceable
rights issue without the prior approval of its shareholders under Rule
7.3.1(a). NZXR is satisfied that the issue of the New Shares is consistent
with the policy of Rule 7.3.4(a). The New Shares will be offered on a
pro-rata basis to eligible shareholders and they will have the opportunity to
maintain their existing proportionate rights. The New Shares will not be
offered to Ineligible Shareholders, which is consistent with the policy of
Rule 7.3.4(h) for offers conducted in accordance with Rule 7.3.4(a).
c. The Offer will provide a return to shareholders who do not, or are unable
to, exercise their entitlement in the form of any premium reached in the
Institutional Bookbuild and Retail Bookbuild in excess of the Entitlement
Price. Accordingly, while the Offer is not strictly Renounceable in
accordance with the definition in the Rules, it does fulfil the purpose of
the requirement for an offer to be Renounceable.
d. The condition in paragraph 2 above will ensure that any exceptions to the
proportionate nature of the issue must be conducted in accordance with Rules
7.3.4(d)-(h).
e. Accordingly, NZXR is satisfied that the policy of Rule 7.3.1 will not be
offended by the granting of this waiver.
f. There is precedent for this decision.

Waiver from Rule 7.10.1
Decision
6. On the basis that the information provided to NZX is complete and accurate
in all material respects, NZXR grants KPG a waiver from Rule 7.10.1 to enable
eligible institutional shareholders to be notified of their entitlement prior
to the Record Date, and to enable that notification to occur by means other
than by physical letters of entitlement.
7. 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.
8. The Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
9. In coming to the decision to provide the waiver set out in paragraph 6
above, NZXR has considered that:
a. The policy behind Rule 7.10.1 is to ensure that letters of entitlement are
sent as soon as possible after the Record Date for an entitlement. This
ensures that shareholders have the maximum amount of time in which to
consider how to deal with their entitlement.
b. The waiver will only apply to eligible institutional shareholders. NZXR
accepts that due to the proposed structure of the Offer, KPG will need to
calculate the entitlements of its eligible institutional shareholders prior
to Record Date, and inform the eligible institutional shareholders of their
entitlement in time for them to participate in the Institutional Entitlement
Offer.
c. Rule 7.10.1 contemplates that an Issuer will not know the identity of
entitled shareholders prior to Record Date. In this case, the entitled
institutional shareholders will be known prior to Record Date. NZXR does not
consider the policy behind Rule 7.10.1 would be to preclude notification of
entitlements prior to Record Date when such entitlements are known.
d. KPG will need to notify institutional shareholders of their entitlement in
as timely manner as possible, which may include means other than physical
letters of entitlement.
e. With regard to retail shareholders, KPG will be required to comply with
Rule 7.10.1.
f. NZXR is satisfied that the policy behind Rule 7.10.1 will not be offended
by granting this waiver.
g. There is precedent for this decision.

Waiver from Rule 7.10.2
Decision
10. On the condition set out in paragraph 11 below and on the basis that the
information provided to NZXR is full and accurate in all material respects,
NZXR grants KPG a waiver from Rule 7.10.2 to the extent that it would
otherwise require the Institutional Entitlement Offer to remain open for
twelve Business Days.
11. The waiver in paragraph 10 above is provided on the condition that the
announcement and offer booklet for the Offer will clearly state that a
shorter than usual offer period will be available to institutional
shareholders under the Institutional Entitlement Offer.
12. 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.
13. The Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
14. In coming to the decision to provide the waiver set out in paragraph 10
above, NZXR has considered that:
a. The policy behind Rule 7.10.2 is to ensure that shareholders have
sufficient time to consider, and act on, an entitlement offer.
b. The waiver only applies in respect of institutional shareholders. NZXR
accepts that such shareholders are accustomed to considering offers and
making investment decisions at short notice.
c. The Retail Entitlement Offer will be open for the full twelve Business Day
period as required by Rule 7.10.2.
d. Accordingly, NZXR is satisfied that the policy behind Rule 7.10.2 will not
be offended by granting this waiver.
e. There is precedent for this decision.

Waiver from Rule 7.10.8
Decision
15. On the condition set out in paragraph 16 below and on the basis that the
information provided to NZXR is full and accurate in all material respects,
NZXR grants KPG a waiver from Rule 7.10.8 to the extent that the Rule would
otherwise require notification of the Offer five Business Days before the Ex
Date.
16. The waiver in paragraph 15 above is provided on the condition that the
Offer is notified to the market in accordance with Rule 7.10.8 no later than
the Ex Date for the Offer.
17. 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.
18. The Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
19. In coming to the decision to provide the waiver set out in paragraph 15
above, NZXR has considered that:
a. The policy behind Rule 7.10.8 is to provide shareholders and stakeholders
within the market sufficient notice of an upcoming entitlement. It also
provides an opportunity for investors to trade in or out of that relevant
security.
b. NZXR has been advised that the shortened notification period of the Record
Date does not provide any issues for KPG's registry.
c. It is a feature of an AREO that an Issuer does not provide five Business
Days prior notification of the Record Date and without waiving the Rule, KPG
would be unable to undertake the Offer.
d. NZXR accepts KPG's submissions regarding the benefits of the AREO
structure, as set out in paragraphs 9 and 10 of Appendix One.
e. There is precedent for this decision.

Waiver from Rule 7.11.1
Decision
20. On the condition set out in paragraph 21 below, and on the basis that the
information provided to is full and accurate in all material respects, NZXR
grants KPG a waiver from Rule 7.11.1 to the extent that the Rule would
otherwise require the allotment of New Shares to the institutional
shareholders in respect of subscriptions received under the Institutional
Entitlement Offer and Institutional Bookbuild to occur within five Business
Days of the closing date for the Institutional Entitlement Offer and
Institutional Bookbuild respectively.
21. The waiver in paragraph 20 above is provided on the condition that
allotment of New Shares to the institutional shareholders occurs on the
settlement date for the Institutional Entitlement Offer.
22. 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.
23. The Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
24. In coming to the decision to provide the waiver set out in paragraph 20
above, NZXR has considered that:
a. The policy of Rule 7.11.1 is to ensure that, where application monies have
been submitted, subscribers obtain the benefit of their investment without
undue delay.
b. This waiver will only effect the settlement for institutional shareholders
under the Institutional Entitlement Offer and Institutional Bookbuild.
Institutional shareholders settle on a delivery versus payment basis so would
not be required to submit the subscription money for the relevant shares
until the institutional settlement date. Accordingly, the institutional
shareholders will not be denied the benefit of this capital for any greater
period than would have otherwise been the case, as a result of this waiver.
c. There is precedent for this decision.

Waiver from Rule 7.12.2
Decision
25. On the conditions set out in paragraph 26 below, NZX grants KPG a waiver
from the 10 Business Day notice requirement in Rule 7.12.2 in relation to its
dividend.
26. The waiver in paragraph 25 above is provided on the conditions that:
a. the record date for the dividend is no less than six Business Days after
the dividend is announced;
b. the dividend is paid prior to the first allotment under the Offer; and
c. The implications of this waiver are disclosed in the announcements on 18
May 2015.
27. 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.
28. The Rules to which this decision relates are set out in Appendix Two to
this decision.
Reasons
29. In coming to the decision to provide the waiver set out in paragraph 25
above, NZXR has considered that:
a. the purpose of Rule 7.12.2 is to ensure the market and those persons who
are to receive any benefit to be paid or distributed on Quoted Securities
(such as an interim dividend) are given sufficient notice ahead of that
benefit;
b. it would not be possible to provide details of the dividend before the
announcement of the annual results and notification of the Record Date for
the dividend as advanced notification may signal to the market that a
significant transaction was imminent;
c. there is commercial rationale for the timetable of the Offer that means
KPG is unable to provide the required 10 Business Days' notice to market;
d. the market will have at least one full day (being Thursday, 21 May 2015)
to trade KPG shares after notice of the dividend and completion of any
possible trading halt, but before the Ex Date of the dividend;
e. a single trading day where trading can occur for investors who wish to
move on or off the KPG share register in contemplation of the dividend is
sufficient, as an active step by those on the share register is not required
in order to receive the dividend;
f. KPG has confirmed with its share registry that the timing of the notice
for the dividend will not create any practical problems; and
g.  there is precedent for this decision.

Confidentiality
30. KPG has requested this application and any decision be kept confidential
until KPG announces the Offer.
31. In accordance with Footnote 1 to Rule 1.11.2, NZXR grants KPG's request.

Appendix One
1. Kiwi Property Group Limited ("KPG") is a Listed Issuer with ordinary
shares and bonds Quoted on the NZX Main Board and NZX Debt Market,
respectively.
2. KPG proposes to undertake a capital raising ("Offer") by way of a pro-rata
offer of new shares in KPG ("New Shares").  The Offer will be made in the
form of an accelerated renounceable entitlement offer (commonly referred to
as an "AREO"). The Offer is to be conducted in the following stages:
a. Institutional Entitlement Offer: An accelerated entitlement offer at a
fixed price ("Entitlement Price") to institutional shareholders resident in
New Zealand and various overseas jurisdictions ("Eligible Institutional
Shareholders") ("Institutional Entitlement Offer").
b. Institutional Bookbuild: New Shares not taken up by Eligible Institutional
Shareholders, along with New Shares in respect of entitlements that would
have been offered to any ineligible overseas institutional shareholders,
offered under a bookbuild to a broad audience of institutional investors
("Institutional Bookbuild"). If the price achieved in the Institutional
Bookbuild is higher than the Entitlement Price, the excess will be shared (on
a pro-rata basis) between the institutional shareholders who did not, or who
were not able to, take up their entitlement.
c. Retail Entitlement Offer: Following completion of the Institutional
Bookbuild, a pro-rata offer of New Shares ("Retail Entitlement Offer") would
be made at the same price and ratio as the Institutional Entitlement Offer to
existing shareholders in New Zealand who did not receive an offer under the
Institutional Entitlement Offer ("Eligible Retail Shareholders").
d. Retail Bookbuild: New Shares not taken up by Eligible Retail Shareholders,
along with New Shares in respect of entitlements that would have been offered
to any ineligible overseas retail shareholders, offered under a bookbuild to
a broad audience of institutional investors ("Retail Bookbuild"). If the
price achieved in the Retail Bookbuild is higher than the Entitlement Price,
the excess will be shared (on a pro-rata basis) between the retail
shareholders who did not, or who were not able to, take up their entitlement.

3. All eligible shareholders will be offered New Shares on a basis that would
(if accepted by all shareholders) maintain the existing proportionate rights
of each shareholder (relative to all other shareholders) to votes and
distributions. New Shares in respect of entitlements that are not taken up,
or not able to be taken up, by shareholders will be offered through the
Institutional Bookbuild and the Retail Bookbuild, providing an opportunity
for shareholders that do not, or are not eligible to, take up their
entitlements to receive value for them.  Entitlements will not be able to be
traded or sold privately by shareholders.
4. KPG will not make the Offer available to KPG shareholders resident in
certain overseas jurisdictions ("Ineligible Shareholders"), on the grounds
that it would be unduly onerous for KPG to make the Offer available to those
Ineligible Shareholders.  New Shares in respect of the entitlements of
Ineligible Shareholders will offered through the Institutional Bookbuild and
the Retail Bookbuild, providing Ineligible Shareholders an opportunity to
receive value for their entitlements.
5. The New Shares will be of the same class and have the same rights as KPG
shares that are currently on issue and will be quoted on the NZX Main Board
on their allotment
6. It is intended that the Offer would be underwritten by First NZ Capital
Securities Limited and Credit Suisse (Australia) Limited (together, the
"Underwriters").
7. The AREO will be conducted in accordance with the following timetable:
Date Event
18 May 2015 Announcement of Offer
Offer document released to NZX
Opening Date for Institutional Entitlement Offer
19 May 2015 Closing date for Institutional Entitlement Offer
20 May 2015 Institutional Bookbuild
Record date (5pm) for Institutional Entitlement Offer and Retail Entitlement
Offer
21 May 2015 Last day for mail-out of retail letters of entitlement
Retail Entitlement Offer Opens
2 June 2015 Settlement and allotment date for Institutional Entitlement Offer
and Institutional Bookbuild
9 June 2015 Closing Date for Retail Entitlement Offer
11 June 2015 Retail Bookbuild
16 June 2015 Settlement and allotment date for Retail Entitlement Offer and
Retail Bookbuild
8. The Offer is to be conducted pursuant to clause 19 of Schedule 1 of the
Financial Markets Conduct Act 2013 ("FMCA") and the associated regulations.
An offer booklet will be prepared and, prior to an offer being made, a notice
will be released by KPG to the NZX Main Board, in accordance with the FMCA.
9. The main benefits to KPG from adopting an AREO structure, as opposed to
undertaking a traditional renounceable rights offer, are as follows:
a. The accelerated institutional component of the Offer means that the
Underwriters have a much shorter period of exposure on that part of the
Offer. This reduced exposure means that obtaining an underwriting commitment
is much more achievable for KPG, as both the risk and the cost associated
with the underwriters are substantially reduced.
b. The underwriting provides certainty to KPG as to the minimum amount to be
raised from the Offer.
c. Evidence from similar entitlement offers undertaken in Australia with an
AREO structure and the AREO offer undertaken recently by Precinct Properties
New Zealand Limited suggests that the shorter timetable for the institutional
component of the offer potentially reduces the issue price discount when
compared to traditional rights issues, as less market risk arises for
institutions.
d. As the Institutional Entitlement Offer and the Institutional Bookbuild
will be conducted at the beginning of the Offer, KPG will receive the
proceeds of the Institutional Entitlement Offer and the Institutional
Bookbuild before the Retail Entitlement Offer is completed.
10. In addition to the benefits to KPG outlined above, KPG considers that
proceeding with any capital raising in the form of an AREO is in the best
interests of shareholders for the following reasons:
a. The sale of entitlements through a bookbuild process managed by the
Underwriters galvanises demand for stock from all eligible investors at one
time.  This can be of advantage to shareholders who do not, or are not
eligible to, take up their entitlement because Eligible Institutional
Shareholders and other investors not currently shareholders in KPG compete
for New Shares in the bookbuilds.
b. Shareholders will not be required to pay any brokerage or incur other
transactions costs under a bookbuild structure in order to realise the value
of their entitlements. Under a conventional renounceable offer, shareholders
selling their rights would be required to pay brokerage.  For smaller
shareholders, the cost of brokerage could exceed the value of the rights.
c. Eligible Retail Shareholders will have the benefit of knowing the outcome
of the Institutional Entitlement Offer and Institutional Bookbuild prior to
deciding whether or not to take up their entitlement.
11. KPG will announce its annual results and a dividend at the same time as
the Offer is announced. The Offer will be made on an ex-dividend basis. This
is because:
a. the dividend relates to the earnings on the existing share capital over
the previous six months and therefore KPG considers that the dividend should
be payable on existing shares only (and not the New Shares); and
b. the proposed approach avoids the need to delay the record date for the
dividend (and therefore the dividend itself) until settlement of the Retail
Entitlement Offer.
12. To effect this in compliance with the conditions for a listed PIE, KPG
cannot allot New Shares under the Institutional Entitlement Offer or
Institutional Bookbuild until after the dividend is paid. Accordingly:
a. the dividend will be announced on 18 May 2015;
b. the record date for the dividend will be 26 May 2015, (six Business Days
after the dividend is announced);
c. the dividend will be paid on 29 May 2015; and
d. the allotment of the shares under the Institutional Entitlement Offer will
be made on 2 June 2015 (the first Business Day following payment of the
dividend).

Waiver from Rule 7.10.1 - Further Background
13. Under the AREO structure, the Record Date for the Institutional
Entitlement Offer is to be 5.00pm on the Business Day after the Institutional
Entitlement Offer closes. As a result KPG will need to:
a. calculate the entitlements of its eligible institutional shareholders
prior to the Record Date; and
b. notify eligible institutional shareholders of their entitlement prior to
the Record Date and in as timely manner as possible (which may include means
other than physical letters of entitlement).

Waiver from Rule 7.10.2 - Further Background
14. KPG considers that it is important that upfront commitments are received
from eligible institutional shareholders to enable KPG to obtain the benefits
of the AREO structure described in paragraphs 9 and 10 above.
15. According to the proposed offer timetable, the offer booklet will be
provided to eligible institutional shareholders on the day on which the
Institutional Entitlement Offer is announced and opens, with those
institutions then having the rest of that day and part of the following day
to consider the Offer.
16. KPG considers that eligible institutional shareholders in KPG are
unlikely to be prejudiced as a result of the shortened offer period because:
a. Institutional shareholders are accustomed to considering offers and making
investment decisions at short notice;
b. The proposed timetable is consistent with market practice for offers to
such investors; and
c. The announcement and offer booklet for the Offer will clearly state that a
shorter than usual offer period will be available to eligible institutional
shareholders under the Institutional Entitlement Offer.

Waiver from Rule 7.10.8 - Further Background
17. The AREO structure provides for the Offer be announced to the market at
the same time that the Institutional Entitlement Offer opens and shares in
KPG are put in to trading halt. This is the standard timeframe for AREO
transactions, and it is one that institutional investors in New Zealand and
overseas are familiar with.

Waiver from Rule 7.11.1 - Further Background
18. For the reasons set out in paragraphs 11 and 12 above, the allotment of
the New Shares under the Institutional Entitlement offer and Institutional
Bookbuild will not be able to occur until 2 June 2015, which is nine Business
Days following the closing date for the Institutional Entitlement Offer and
eight Business Days following the close of the Institutional Bookbuild.

Waiver from Rule 7.12.2 - Further Background
19. As set out in paragraph 12 above, the dividend will be announced on 18
May 2015 which is six Business Days before the record date for the dividend.
20. KPG has applied for a trading halt to apply during the Institutional
Entitlement Offer and Institutional Bookbuild. The trading halt will be
lifted prior to market open on Thursday 21 May 2015 which will provide for
one trading day between announcement of the dividend and the Ex-date for the
dividend.

Appendix Two
Rule 7.3 Issue of New Equity Securities
7.3.1 No Issuer issue any Equity Securities (including issue on Conversion of
any other Security) unless:
(a) the precise terms and conditions of the specific proposal to issue those
Equity Securities have been approved (subject to Rule 7.3.3) by separate
resolutions (passed by a simple majority of Votes) of holders of each Class
of Quoted Equity Securities of the Issuer whose rights or entitlements could
be affected by that issue, and that issue is completed within the time
specified in Rule 7.3.2; or

Rule 7.10 Rights Issues and Share Purchase Plans
7.10.1 Letters of entitlement to Rights (whether or not Renounceable) are to
be sent to holders of the Rights within five Business Days of the Record Date
for the determination of the entitlement and by means that will give the
holders reasonable time to deal with their Rights, whether the holders'
addresses are in New Zealand or elsewhere.

7.10.2 Without limiting Rule 7.10.1, the closing date and time for
applications under Rights issues (whether or not renounceable) shall not be
earlier than the 12th Business Day after the day of mailing of the last of
the letters of entitlement.

7.10.8 Where a Rights issue is to be made but Quotation is not sought the
Issuer shall give to NZX forthwith after the decision has been made and at
least 5 Business Days before the Ex Date to determine entitlements, on the
form in Appendix 7, full details of the issue, including the nature,
entitlement and timing of the issue of Rights and conversion, pricing,
amounts payable and ranking of Securities for future benefits.

Rule 7.11 Allotment
7.11.1 An Issuer making an issue of Securities Quoted or to be Quoted (other
than Equity Securities issued under Rule 7.3.10) shall proceed to allotment
within five Business Days after the latest date on which applications for
Securities close.

Rule 7.12 Announcements
7.12.2 Where any benefit is to be paid or distributed on Quoted Securities
(including dividends, interest or bonus issues) or any Conversion of
Securities or call on Securities is to take place, the Issuer shall give to
NZX, forthwith after any Director's recommendation and at least 10 Business
Days before the Record Date to determine entitlements or obligations, full
details of the benefit, Conversion or call, including the information in the
table below. That information shall be supplied in the form set out in
Appendix 7.

[Table not reproduced]
End CA:00264419 For:KPG    Type:WAV/RULE   Time:2015-05-18 09:14:20