12 .In the announcement released by ASX suspending trading in...

12 .In the announcement released by ASX suspending trading in the Company's securities, ASX also noted that the sale of the Assets would require the approval of the Company's shareholders (Shareholders) pursuant to listing ASX Listing Rule 11.2.

1. Was AZZ not aware of its obligations under ASX Listing Rule 11.2 at the time it made the announcement of sale and purchase agreement with no conditions precedent – if yes, why was this not stated as condition precedent to the sale agreement?

1. The market was fully informed in October 2015 about the risks relating to completion of the sale of the Assets, the financial circumstances of the Company and its ability to redeem the Notes.

This is what the market knew as per announcement on 10 September and 07 September.
- Northern Star gross pretax sale proceeds 148,788,560 USD – cash payment only
- Big Star gross pretax sale proceeds 105,069,420 USD – cash payment only
- No conditions precedent
- Closing date on or before 30th November 2015
- Private Equity purchaser
- Effective date 1st September 2015
- Shareholder meeting information to be announced in due course

1. My interpretation (and ASX it seems as well) of an informed market would have included the following material. Remember we are talking about a US$250M transaction (applying to AZZ which had a market cap of AUD$24M at the time of first announcement):
   • Information about the financial standing of Wade, its ability to complete the purchase of the Assets and whether it had completed transactions of a similar nature previously
   • Details of the US$70,000,000 of closing adjustments, taxes and frictional costs that the Company believed would be associated with the sale of the Assets
   • A statement correcting the Company's previous disclosure that completion of the sale of the Assets was not subject to any conditions precedent and including in the Draft Shareholders Notice of Meeting the conditions precedent to completion contained in the Sale Agreements
   • The structure of the Wade, particularly it reliance on private equity financiers. Furthermore, why was the financing by Wade’s private equity financiers not stated as a condition precedent?
   • the name of the private equity financiers of Wade;
   • the financial capacity of Wade to complete the purchase of the Assets;
   • the enquiries made by the Company into the financial capacity of Wade and an explanation of the confidence the Company had in Wade being able to complete the purchase of the Assets under the amended Sale Agreements;
   • a summary of the material amendments to the Sale Agreements which included the omission of conditions precedents under the original Sale Agreements;
   • the circumstances surrounding Wade's acknowledgement that its right to terminate under the Sale Agreements had lapsed and the Company's right to terminate the Sale Agreements at its discretion at any time prior to completion; and
   • the extent and purpose of the Company's continued engagement with Wade
2. How does AZZ believe the ‘market was informed’ with 7 bullet point response above with the above information not being disclosed.

1. Following the October 2015 Noteholders Meeting, the Company prepared a notice of meeting for despatch to Shareholders seeking approval for the disposal of the Assets pursuant to ASX Listing Rule 11.2 (Draft Shareholders Notice of Meeting).
2. Why was this prepared?
3. What additional information had come to light to warrant the preparation of this document now and not prior to this date?

1. The Company had no objection to making a standalone announcement which disclosed Wade as the purchaser of the Assets, as requested by ASX. However, the Company was unable to agree with ASX on the information that ASX had requested the Company disclose in an announcement and amendments to the Draft Shareholders Notice of Meeting, (being documents that the Company (not ASX) was releasing to the market).
2. The above is dated 10 November 2015 – As such, what information had come to light to AZZ in relation to the sale and purchase agreement on 10th November that it changed its view and had no objection in disclosing the purchaser given the strong arguments about not disclosing the purchaser (ref 6). Did AZZ hear or believe that the ability to complete the sale of Assets was already jeopardised? It is noted that the next announcement that AZZ released was on the 1st December in relation to the sale not completing.

43.2 while the Company continued to engage with Wade, the Company had been provided with limited information relating to the finances of Wade and its private equity financiers;

1. During due diligence on the purchaser, and prior to executing the sale and purchase agreement, did AZZ clarify how Wade (or its private equity financiers) planned to fund the agreement. If not, should the announcement made to the ASX on 7 September 2015 have been delayed until such information was obtained?

43.3 there was no assurance or guarantee that completion under the Sale Agreements would occur.

1. The above is dated at 4 December 2015. What change occurred for AZZ to only now believe that there was no assurance or guarantee that the Sale Agreements would occur
2. What assurances or guarantees were in place prior to this date? Why were they not released to the ‘informed market’?

46.4 a summary of the material amendments to the Sale Agreements which included the omission of conditions precedents under the original Sale Agreements

1. Upon review of the Sale Agreements by the ASX, did the ASX believe there were conditions precedent. If so, why did AZZ make an announcement stating that there were no conditions precedent

46.5 the circumstances surrounding Wade's acknowledgement that its right to terminate under the Sale Agreements had lapsed and the Company's right to terminate the Sale Agreements at its discretion at any time prior to completion; and

1. If Wade had a right to terminate under the Sale Agreement, please explain how AZZ believed that this was not a material term to the transaction. How was the market informed without this information?

1. While the Company continued (and continues) to engage with Wade to complete the sale of the Assets, after Wade's request for an extension to complete the purchase of the Assets, the Company, as a matter of good governance, began considering alternative transactions in the event the sale of the Assets to Wade did not proceed.
2. Has AZZ now conducted due diligence on the Wade. Can AZZ now answer the following questions
   1. Information about the financial standing of Wade, its ability to complete the purchase of the Assets and whether it had completed transactions of a similar nature previously
   2. The structure of the Wade, particularly it reliance on private equity financiers. Furthermore, why was the financing by Wade’s private equity financiers not stated as a condition precedent?
   3. the name of the private equity financiers of Wade;
   4. the financial capacity of Wade to complete the purchase of the Assets;
   5. the enquiries made by the Company into the financial capacity of Wade and an explanation of the confidence the Company had in Wade being able to complete the purchase of the Assets under the amended Sale Agreements;
   6. a summary of the material amendments to the Sale Agreements which included the omission of conditions precedents under the original Sale Agreements;
   7. the extent and purpose of the Company's continued engagement with Wade

1. The Company's decision to issue the March 2016 Notice of Meeting was made at the last practical date to comply with the minimum 21 days' notice period required under the Note Trust Deed.

1. The last practical day would be the 10^th March 2016. The March 2016 Notice of Meeting was made

67.5 The Company informed the market of the alternative sale process in its December 2015 Quarterly Report.
Does AZZ consider ‘Whilst working upon this process Antares has also been engaged with other parties concerning both outright sale and joint venture opportunities’ to be a sufficient given that the following had occurred:

• On 17 December 2015, the Company engaged advisors to conduct a confidential sale process for the Assets to identify alternative purchasers.
• On 25 January 2016, a confidential data room was opened to parties involved in the sale process. All parties involved in the sale process were subject to non-disclosure agreements

1. Please confirm why the quarterly report as at 30 June 2015 (or any prior or subsequent quarterly reports) does not state that the convertible notes have a reset date of 31 October 2015 in the notes to the convertible notes?
2. I am not sure AZZ have answered the question 4. ASX wants to know how ABW released the following on 29 February 2016 when AZZ only updated the market about the sale process on 4 March 2016.

“The Master Fund holds Antares Energy Limited Convertible Notes (ASX Code: AZZG)(Antares Notes) which have been suspended from trading and are, consequently, currently illiquid. The note is due to be repaid on 31st March 2016, but information has become available to us which leads us to believe there is a possibility that replayment will not occur on this date and therefore we are unable to accurately determine a value for the Antares Notes.”