change in substantial holding, page-7

Hi Jus,

That's exceptionally good of you to go to the trouble of attaching the rules. I found this on Page 16 :-

9 Substantial and controlling interests in corporations

(1) For the purposes of this Act:

(a) a person shall be taken to hold a substantial interest in a corporation if the person, alone or together with any associate or associates of the person, is in a position to control not less than 15 per centum of the voting power in the corporation or holds interests in not less than 15 per centum of the issued shares in the corporation; and

(b) 2 or more persons shall be taken to hold an aggregate substantial interest in a corporation if they, together with any associate or associates of any of them, are in a position to control not less than 40 per centum of the voting power in the corporation or hold interests in not less than 40 per centum of the issued shares in the corporation.


I maybe completely misunderstanding the rules. But after reading this I believe that one foreign company can't hold more than a 15% stake in a Australian company. And that as a whole (all foreign companies combined) not more then 40%. It would seem that Regent are restricted in their current form to 15%. How Consoliated Minerals is able to get around the 15% limit is perhaps by having their stake in BCI in different companies. BCI's biggest shareholder is stated as being Consoliated Minerals, sometimes it's Consoliated Iron. I think they are the same beast and have a collected interest in BCI. Although that would fall out of the rule criteria because they are still associates, so who knows how they get around it. Consoliated Minerals has many different companies and associates. These are all owned completely, mostly or partly by the one Russian guy who's name I could find but at the moment couldn't be bothered.

Regarding the 40% limit, does that mean that if Regent had a 15% stake in BCI, Consmin are restricted to 25%?(If there are no other foreign companies). Or are some of Consmin's associated companies Australian run so don't have foreign ownership rules applied to them, and thus would change Consmin's potential limit as well. I'm battling to understand the foreign ownership rules. So please forgive me if I've completely messed up my interpetation.

Is it also the case that if Consmin or Regent wanted to exceed their limit that they would need to launch a takeover bid? I remember Tils talking once that Consmin couldn't buy too many more BCI shares without lauching a takeover so perhaps they are near their limit as well.

Have a good weekend.