Entitlements of holder of Preference Securities.  |
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|---|---|
| Rule: | 2A 5.8 |
| 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: | “The holder of a preference security must be entitled to: (1) a dividend in preference to holders of ordinary securities; (2) return of capital in preference to holders of ordinary shares when the issuer is wound up; and (3) the same rights as a holder of an ordinary share in relation to receiving notices, reports and audited accounts and attending meetings” |
| Waiver Requested: | The product structure of the applicant involves investors subscribing for a class of redeemable preference securities which provides holders with rights in wine. In essence, the funds raised will be used to procure wine on behalf of each holder (of wine class shares) by the AWX Trust. Holders of the wine class shares will have an absolute entitlement to the wine, held under a bare trust structure, and on the redemption date their beneficial interest in that wine will merge with legal title. The product structure does not entitle holders of wine class shares to monetary dividends or any return of capital, other than the wine to which they have absolute entitlement, in preference to ordinary shareholders. Conversely, ordinary shareholders of the applicant will not receive any of the entitlements of the wine class share. The entitlements of a holder of a wine class share shall be disclosed in the prospectus and listing application. It is requested that NSX waive Section IIA Listing Rule 5.8(1) and 5.8(2), on the proviso that the holder of the wine class share maintains absolute entitlement to the wine that relates to the wine class share. |
| Effect of Waiver: | In agreeing to the waiver of rule 5.8(1) and 5.8(2), NSX may be permitting the listing of a class of a preference security which does not provide the holder with preferences to monetary dividends or a return of capital of the company on winding up. However, investors in wine class shares (a redeemable preference share) will subscribe to specific rights to bottled wine, which shall not be available to ordinary shareholders or creditors, and these rights will be disclosed within each prospectus. |