Adequate Track Record.  |
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|---|---|
| Rule: | 2B 3.6 |
| Date Requested: | Thursday, January 24, 2002 |
| Requested By: | AWX |
| Date Approved: | Friday, January 25, 2002 |
| Approved By: | NSX BOARD |
| Issuer: | AWX |
| Securities: | All AWX Securities |
| Description of Rule: | “A new applicant must have an adequate track record under substantially the same management which must be of known character and integrity. For this purpose, an adequate track record will normally be at least two financial years but the Exchange may accept a shorter period if the public offering is fully underwritten on a firm basis by an underwriter approved by the Exchange, at least to the extent of the minimum amount required to be raised by the issue in order to purchase any assets to be acquired out of the proceeds of the sale.” |
| Waiver Requested: | AWX Capital Limited is a new company, incorporated on 15 March 2001. AWX Capital Limited (as issuer of wine class shares) does not satisfy this Listing Rule and issues proposed by the applicant will not be underwritten. The applicant's ordinary shares are fully owned by Australian Wine Exchange Pty Ltd ("AWEPL"). For the purpose of the NSX Listing Rules, AWEPL is the “holding entity” for AWX Capital Limited. AWEPL was incorporated on the 8th of April 1999 and has been under the same management since that time. The directors of AWEPL and the applicant are the same. The Board of each consists of Clive Batrouney (Deputy Chairman ASX and Chairman of the Securities Exchanges Guarantee Corporation Ltd, which is the trustee of the National Guarantee Fund), Mark Rowsthorn (TOLL Holdings Executive Director and largest shareholder), Bob Watson (Director of SEEK Communications and FreeOnLine) and Stephen Thompson (Founder of the holding entity). It is requested that NSX waive Section IIB Listing Rule 3.6 on the basis that the “holding entity” of the applicant has an adequate track record, which shall be disclosed within the applicant’s listing application and prospectus. |
| Effect of Waiver: | In agreeing to this waiver, NSX may be permitting the listing of a class of debt security in a new entity, which is not yet able to provide historical financial information and is not fully underwritten. However, wine class shares are in essence a financial product that provides the holder with an absolute entitlement to wine. Therefore, investors and NSX are not being asked to assess the capacity (via a track record) of the issuer to repay the debt security, as the debt security will never be repaid. Instead, the investor receives its absolute entitlement to the wine upon allotment of the security. In addition, the holding entity of the applicant does have two years track record and as mentioned, the directors of AWEPL and the company are the same. Therefore, it is submitted that NSX will be able to extrapolate from the track record of AWEPL that the applicant has management of known character and integrity and is likely to perform at a similar level as AWEPL. The Board of directors of the holding entity will be profiled in the listing application and the prospectus. Consequently the NSX and investors will still be able to assess the character and integrity of the management of the applicant. |