Rubicon shareholder meeting – 12 January 2018

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Rubicon Shareholders’ Meeting – 12 January 2018



Stephen Kasnet – Chairman’s address

FORWARD-LOOKING STATEMENTS
There are forward-looking statements included in this document. As forward-looking statements are predictive in nature, they are subject to a number of risks
and uncertainties relating to Rubicon, its operations, the markets in which it competes and other factors (some of which are beyond the control of Rubicon).
As a result, actual results and conditions may differ materially from those expressed or implied by such statements.
All references in this document to $ or “dollars” are references to United States dollars unless otherwise stated.


Good morning ladies and gentlemen, and welcome to this Shareholders’ Meeting of Rubicon.

It is a pleasure to be here with you today – albeit by electronic link. I hope you all are able to hear me just
fine. For those of you who don’t know me, I am Steve Kasnet, an Independent Director and Chairman of
Rubicon.

With me today, by teleconference, is George Karaplis, who is also an independent director of your Board. In
the room with you today are directors Hugh Fletcher and Luke Moriarty (our CEO), and selected Rubicon
management. For reasons that I will discuss shortly, directors Ranjan Tandon and David Knott are not here
today.

I confirm that a quorum is present and that the Meeting is duly constituted. All shareholders have been sent
the Notice of Meeting and you have also been sent Rubicon’s latest financial results by way of our Annual
Report for the 15 month period ended 30 September 2017.

KPMG (our auditors) are here with us today, and they will act as scrutineers in relation to votes cast at this
Meeting.

By way of clarification – this is not our Annual Meeting, where we report on the results of operations for the
period and update you on progress in the new-year. That meeting will be held in early March.

Rather, the sole purpose of today’s Meeting, and the only business before you, is to consider the Proposed
Transaction involving the sale of our 44.88% interest in the Tenon Clearwood Partnership, which as you
know is made up of a large clearwood sawmill and remanufacturing operations at Taupo, and its related
global sales and marketing business.

David Knott and Ranjan Tandon are principals of Knott Partners and Libra Fund LP respectively, and are also
Rubicon’s major shareholders (who in aggregate own 45.9% of our issued shares). Given they will be acquiring
40% of TCLP under the proposed transaction, they are ‘interested’ parties under the NZX Listing Rules.
Accordingly, it was not appropriate for them to be involved in approving the transaction as Rubicon directors.
As a result, the board established a sub-committee made up of Independent Directors who did not already
own TCLP shares and who were not interested in this transaction - being myself and George Karaplis. George
and I have led the negotiation and decision-making for the Proposed Transaction on behalf of the Company,
and have done so without the input of any of the interested Board directors. The recommendation before
you today is your independent directors’ recommendation to you, supported by an independent report
from Grant Samuel which we commissioned for shareholders.

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Let’s turn to the only resolution today, which is –

To consider and, if thought fit, pass the following as an ordinary resolution under NZX Main Board Listing
Rules 9.1 and 9.2 - That the Sale of Rubicon TC Holdings LP’s 44.88% ownership interest in TCLP, on the
terms described in the Notice of Meeting, be approved.

The Notice of Meeting contains a full description of the transaction, so I don’t propose to go into that
today.

Instead, I thought I would summarise the strategic rationale behind our recommendation that you vote in
favour of the Proposed Transaction.

The rationale is three-fold –

 Firstly, Rubicon needs to make the final two deferred-settlement payments in relation to the recent
acquisition of ArborGen, totalling US$15 million. In addition, Rubicon also needs to repay US$6 million
of subordinated debt notes on 1 July 2018. Rubicon Limited had unrestricted cash of US$12.5 million as
at 30 September 2017 (i.e. as per our year-end Audited Financial Statements). Closing of the Proposed
Transaction will ensure there are no funding calls on Rubicon shareholders in order to be able to make
these payments, which in turn should remove any share-price ‘overhang’ that might exist today in
relation to funding uncertainty;

 Secondly, once our TCLP investment is sold, Rubicon will be 100% focused on ArborGen, as that will then
be our only investment. The Sale will then make Rubicon a ‘pure-play’ for investors on the ArborGen
business upside, and with Rubicon’s financials moving forward then only being ArborGen-based,
investors will have greater transparency of ArborGen’s financial results. These two factors should
enhance the attractiveness of the stock to a wider pool of investors; and

 Finally, although not yet finalised, we believe that once the Sale of our TCLP investment has been settled,
we will then be in a position to achieve significant cost-out / savings of up to US$2 million pa (pre
restructuring costs), depending on the final operating structure and model chosen ... which we will set
about doing once we know the outcome of this meeting.
We believe that these three factors – the removal of any overhang in the stock price relating to uncertainty
as to funding source of the deferred ArborGen acquisition and subordinated debt payments, simplifying
Rubicon to be a pure-play on the ArborGen business, and the achievement of cost savings, will all be
beneficial to building positive momentum in the RBC share price ... which is already up more than 20%
following the announcement of this transaction and the recent share register ownership changes.

We did not deem it necessary to run a third party sales process in relation to Rubicon’s 44.88% interest in
TCLP. The rationale for that decision was based on the fact that Tenon had earlier this year been through an
exhaustive 18-month sales process for the Clearwood business, supported by an international investment
banker, and which then concluded that the TCLP consortium provided the best value outcome.

In terms of value of Rubicon’s stake today, I would make the following points -
 the consideration offered under the Proposed Transaction is the same as that which Rubicon invested
into TCLP on 28 April 2017, adjusted upwards for Rubicon’s share of the reduction in TCLP’s Net Debt
that has occurred since, and

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 the Purchase Price of US$14.9 million falls towards the middle of the Grant Samuel value range, which,
when adjusted for the actual TCLP 31 December ’17 debt level, is a range of US$13.2 – US$17.8 million,
and
 the Rubicon stake is a non-strategic block in a Limited Partnership structure.

Grant Samuel’s conclusion on the transaction before you, is as follows –

“In Grant Samuel’s opinion, based on the analysis of the merits outlined above, the terms of the Proposed
Transaction are fair and reasonable to the shareholders of Rubicon not associated with Knott and Libra. In
Grant Samuel’s opinion, the information to be provided by Rubicon to its shareholders is sufficient to enable
holders of those shares to understand all the relevant factors and make an informed decision as to the sale
of Rubicon’s interest in TCLP.”

Given all of the above, I am sure you will understand that there was no benefit whatsoever to be gained for
Rubicon shareholders (only considerable cost and time delay) from running another extended sales process.

So that is how we reached the unanimous recommendation that we have.

If the sale is approved, ArborGen will then be Rubicon’s sole asset.

We have great belief in the potential future upside in ArborGen –

 It is a global leader in advanced forestry genetics, operating in the world’s major commercial tree species
(pine and eucalyptus), in geographies with high annual planting rates (Brazil, the US, and Australasia). It
sells to major forestry players in those countries, and has a leading market position in its largest
commercial market, the US.
 It has a pre-eminent intellectual property position, which includes an industry-leading germplasm
repository (i.e. genetic library), a proprietary ‘tree machine’ platform, an extensive database of global
trials, varietal and transgenic technology, and a genomics platform - all protected by a patent portfolio
and a ‘bank’ of trade secrets.
 It has a portfolio of advanced products that do not require regulatory approval, which are currently being
commercialised.
 In its last fiscal year, ArborGen turned EBITDA positive, and its forecasts are for it to be cash-positive from
now onwards.
 The considerable investment in research, capability and customer preparation has been made. ArborGen
is now all about commercialising that investment by converting its customers to its advanced genetics
products.
 We believe it is well positioned to do so, and that this will be reflected in its future earnings, and hence
in its value for Rubicon shareholders.

That concludes my comments today Ladies and Gentlemen.

This is a good point for me to stop, and ask if there are any questions on anything that I have said so far, or
indeed anything at all on the Resolution before I formally put it to the Meeting to vote on?

Thank you ...

I will now formally move the Resolution -

To consider and, if thought fit, to pass the following as an ordinary resolution under NZX Main Board Listing
Rules 9.1 and 9.2 - That the Sale of Rubicon TC Holdings LP’s 44.88% ownership interest in the Tenon
Clearwood Limited Partnership, on the terms described in the Notice of Meeting, be approved.

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Resolution 1 is proposed as an ordinary resolution to satisfy Listing Rules 9.1 and 9.2.

Knott and Libra can vote on Resolution 1 for the purposes of the approval required under Listing Rule 9.1,
which relates to the approval as a major transaction.

However, Knott and Libra’s votes cannot be including in the voting on Resolution 1 for the purposes of the
approval required under Listing Rule 9.2, which relates to transactions with related parties.

So we are going to count votes on Resolution 1 twice, once including any votes cast by Knott and Libra to
satisfy listing rule 9.1 and once excluding the Knott and Libra votes in order to satisfy listing rule 9.2

Approval is required under both Listing Rules 9.1 and 9.2, so if shareholders do not pass the resolution under
either of Listing Rules 9.1 or 9.2 the resolution will not be effective.

Before I ask you to vote, do we have any final questions on this resolution that we have not already covered?

Thank you. Please mark your ballot papers accordingly.

That completes the formal business today. If you hold up your voting papers they will be collected now.

Thank you ladies and gentlemen - the formal results will be announced to the NZX later today upon final
tallying.

I now declare the Meeting formally closed.

On behalf of the board and management team I would like to thank you for your attendance today and also
for your continued support.

We would be delighted if you are available to stay for a while now and have a tea or coffee with us.


Thank you.

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12 January 2018
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Special Shareholders’ Meeting –2018
Special Shareholders’ Meeting –2018
Stephen Kasnet
Chairman of the Meeting

12 January 2018
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George Karaplis(teleconference)
Hugh Fletcher
Luke Moriarty
KPMG (Auditors) as scrutineers
Special Shareholders’ Meeting –2018
Sole Purpose of Meeting
Consider Proposed Transaction
Sale of Rubicon’s 44.88% interest in TCLP
Large clearwoodsawmill and remanufacturing activities in
Taupo, NZ
Related global sales and marketing business

12 January 2018
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Sub-committee of Independent Directors
Knott and Libra –
Own ~46% of Rubicon’s shares
Will acquire 40% of TCLP under the Proposed Transaction
Considered ‘interested’ parties under NZX Listing Rules
Independent Committee of RBC Board was established
Steve Kasnet/ George Karaplis
Lead the negotiation of the Proposed Transaction
Recommendation today, is recommendation of Independent Committee
Grant Samuel independent report commissioned for shareholders
Resolution
Notice of Meeting contains a full description of the
Proposed Transaction
Resolution 1 –Proposed Transaction
That the sale of Rubicon TC Holdings LP’s 44.88% ownership
interest in Tenon ClearwoodLimited Partnership, on the terms
described in the Notice of Meeting, be approved.

12 January 2018
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TCLP Sale –Strategic Rationale
1.Raise $ to meet Rubicon’s immediate funding requirements
•ArborGenacquisition deferred settlement payments (US$15m)
•Repayment of subordinated debt notes (US$6m)
•No shareholder funding calls
•Removal of any share price ‘overhang’ due to funding uncertainty
2.Refine focus solely to ArborGen
•RBC will then be a ‘pure play’ on the ArborGenvalue-upside
•Greater transparency of ArborGen’sresults in Rubicon financials
•Increase attractiveness of RBC to potential value investors
3.Extract up to US$2m pa in cost-out / savings
TCLP Sale –Sale Price
Not deemed necessary to run another exhaustive sales process
Tenon had been through a 18-month process with the TCLP business
Supported by an international investment banker
Only completed that deal in April this year
TCLP was the winning bidder, best value outcome
Purchase Price under today’s Proposed Transaction
Same price as Tenon transaction, adjusted upwards for cash since
Price of US$14.9m is within the G.S. value range
G.S. assessed value (adjfor actual 31/12 debt) at US$13.2m –US$17.8m
Rubicon stake is a non-control block in a limited partnership structure

12 January 2018
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TCLP Sale –Sale Price (cont)
Grant Samuel conclusion –
“In Grant Samuel’s opinion, based on the analysis of the merits outlined [above], the
terms of the Proposed Transaction are fair and reasonable to the shareholders of Rubicon
not associated with Knott and Libra.
In Grant Samuel’s opinion, the information [to be] provided by Rubicon to its shareholders
is sufficient to enable holders of those shares to understand all the relevant factors and
make an informed decision as to the sale of Rubicon’s interest in TCLP.”
Rubicon post TCLP sale –a ‘pure play’ on ArborGen
We have great belief in the upside potential of ArborGen
Global leader in advanced forestry genetics
Operating in world’s major commercial tree species
In geographies with high annual tree planting rates
Selling to major forestry players
A leading market position in the US, its largest market
Pre-eminent intellectual property position
Industry-leading germplasm
Proprietary ‘tree machine’ platform
Extensive database of global field trials
Varietal and transgenic technology
Genomics platform
Portfolio of advanced products not requiring regulatory consent
Turned EBITDA positive last year, to be cash positive from now on
Value will be reflected in future earnings and RBC share price

12 January 2018
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Resolution
Resolution 1 –Proposed Transaction
That the sale of Rubicon TC Holdings LP’s 44.88%
ownership interest in Tenon ClearwoodLimited
Partnership, on the terms described in the Notice of
Meeting, be approved.
Forward-Looking Statements
There are forward-looking statements included in this document. As forward-looking statements are predictive in
nature, they are subject to a number of risks and uncertainties relating to Rubicon, its operations, the markets in
which it competes and other factors (some of which are beyond the control of Rubicon). As a result, actual results
and conditions may differ materially from those expressed or implied by such statements.
All references in this document to $ or “dollars” are references to United States dollars unless otherwise stated.
An exchange rate of 0.70 has been used to calculate any NZ$ equivalents of US$ amounts.