Here's a collection of points I found interesting on CDIs from the scheme booklet. There are many more.. no individual advice provided here.
You also have until 5pm AEDT tomorrow to submit the election form to receive NewCo Shares directly, instead of CDIs.
Note the Ruling from ATO is still outstanding.
Computershare ELECTION FORM PDF - (FILE_1901.pdf)
See Full Scheme Booklet PDF here: https://www.datocms-assets.com/53992/1699507017-all015-merger-shareholder-book-final-digital-09-11-23.pdf
Excuse formattingALLKEM CDIs
Page 48
Following closing of theTransaction, the legal title to NewCo Shares to which any NewCo CDIs relatewillbe held by Cede & Co (being the registered nominee of the US centralsecurities depository), with CHESS Depositary Nominees Pty Ltd (ABN 75 071 346506),a wholly owned subsidiary of ASX, referred to as the Depositary Nominee,holding the beneficial title under a custodian arrangement to those NewCoShares on behalf of holders of NewCo CDIs.
Principal differencesbetween holding NewCo CDIs and NewCo Shares
There are a number ofdifferences between holding NewCo CDIs and NewCo Shares. The major differencesare that:
•holders of NewCo CDIs donot have legal title in the underlying NewCo Shares to which the CDIs relate;
•holders of NewCo CDIs arenot able to vote directly as shareholders at a meeting of NewCo. Instead,holders of CDIs are provided with a voting instruction form which will enablethem to instruct the Depositary Nominee in relation to the exercise of voting rights.In addition, a holder of CDIs is able to request the Depositary Nominee toappoint the CDI holder or a third party nominated by the CDI holder as itsproxy so that the proxy so appointed may exercise the votes attaching to theNewCo Shares; and
•holders of CDIs will notbe directly entitled to certain other rights conferred on holders of NewCoShares, including the right to apply to a Bailiwick of Jersey court for anorder on the grounds that the affairs of NewCo are being conducted in a manner whichis unfairly prejudicial to the interests of NewCo Shareholders; and the rightto apply to the Jersey Financial Services Commission (JFSC) to have aninspector appointed to investigate the affairs of NewCo.
As described in section3.6(a) above, holders will be able to convert their NewCo CDIs into NewCoShares (or vice versa) at any time.
1.2 (e)Page 19
•The future trading priceof the NewCo Shares and NewCo CDIs that form the Scheme Consideration is notcertain The future trading price of NewCo Shares and/or NewCo CDIs cannot beguaranteed. NewCo Shares may perform differently to NewCo CDIs as a result ofidiosyncratic market dynamics relevant to the respective exchanges upon whichthey are listed. Some Allkem Shareholders may elect to receive NewCo Sharesinstead of NewCo CDIs, and NewCo CDI holders may independently transmute orconvert their investment into NewCo Shares at any time. Asa result, the numberof NewCo CDIs available to be traded on ASX may be reduced and this, in turn,would reduce the liquidity of NewCo CDIs on ASX.
•NewCo Shares and NewCoCDIs will confer different rights and protections than those applicable toAllkem Shares, and you may consider some of those differences disadvantageous AllkemShareholders’ rights are currently governed by the laws of Australia, the ASXListing Rules and the constitution of Allkem. In comparison, therights ofholders of NewCo CDIs or NewCo Shares will be governed by the laws of Jerseyand NewCo’s memorandum and articles of association. US federal securities lawsand the listing rules of NYSE will also apply to NewCo. NewCo will apply for aForeign Exempt Listing on ASX and, if approved, will be subject to a limitednumber of ASX Listing Rules.As a result, if the Scheme is Implemented, therights of, and protections for, holders of NewCo CDIs and NewCo Shares willdiffer to those applicable to Allkem Shareholders. In addition, unless theyelect otherwise (or are Eligible Canadian Register Shareholders who do notelect to receive NewCo CDIs), Allkem Shareholders will receive NewCo CDIs ifthe Scheme is Implemented. Although NewCo CDI holders receive all of theeconomic benefits of actual ownership of the underlying shares, there are anumber of differences between holding a CDI and holding the underlying share,some of which could be viewed as disadvantageous. For example, holders of NewCoCDIs will need to act through CHESS Depositary Nominees Pty Limited (CDN) forthe purposes of voting the underlying sharesand exercising shareholder rightsattaching to the underlying shares (although CDN is required to comply with theinstructions of the NewCo CDI holder in exercising shareholder rights availableto CDN as the holder of NewCo Shares over which CDIs are issued). AllkemShareholders should consider the detail included in this Scheme Booklet aboutthe rights and entitlements attaching to NewCo CDIs, as well as NewCo Shares(in section 3.6) and the comparison of shareholder rights and corporate lawsapplicable in respect of Allkem and NewCo in Annexure H.
(Page 208)
•Subsequentconversion of NewCo CDIs into NewCo Shares (or vice versa) No CGT consequences should generally arise if a SchemeShareholder subsequently converts their NewCo CDIs into NewCo Shares. This ison the presumption that Scheme Shareholders who hold NewCo CDIs should alreadybe absolutely entitled to the underlying NewCo Share for each NewCo CDI held.Similarly, the conversion of NewCo Shares into NewCo CDIs should also not haveany adverse CGT consequences for the Scheme Shareholder.
Future disposals ofNewCo CDIs or NewCo Shares (as applicable) held on capital account
Following Implementation,a Scheme Shareholder who disposes of their NewCo CDIs or NewCo Shares (asapplicable) may make a capital gain or capital loss on the disposal, dependingupon whether the capital proceeds received for the disposal exceed the costbase (or are less than the reduced cost base) of the relevant NewCo CDIs orNewCo Shares (as applicable).
If an Australian residentScheme Shareholder:
•has held their NewCo CDIsor NewCo Shares(as applicable) for at least 12 months (excluding theacquisition and disposal dates, and noting the modified acquisition time whererollover relief has been chosen, as set out in section 9.2(a)(ii) above); and
•realises a capital gainupon a subsequent disposal,
such Scheme Shareholdermay be entitled to a 50% CGT discount (where the Scheme Shareholder is anindividual or trust) or a 33 1/3% CGT discount (where the Scheme Shareholder isa complying superannuation entity). The CGT discount does not apply to a SchemeShareholder that is a company.
If the CGT discountapplies, the Scheme Shareholder must offset available capital losses againstthe capital gain, then must multiply the result by the relevant discountpercentage.
If a capital loss isrealised upon subsequent disposal, the relevant Scheme Shareholder may, subjectto satisfying the relevant loss utilisation provisions, be able to offset theloss against capital gains realised in the relevant income year (if any), orcarry the capital loss forward to offset capital gains in future income years
Also see Annexure H
