LIC – Waiver from NZAX Listing Rule 7.11.1

NZX Regulation Decision
Livestock Improvement Corporation Limited (NS)
(“LIC”) Application for waiver from NZAX Listing Rule
7.11.1








23 July 2018

NZX REGULATION DECISION – 23 July 2018 2 of 6
Waiver from Rule 7.11.1
1. The information on which this decision is based is set out in Appendix One to this
decision. This decision will not apply if this information is not, or ceases to be, full and
accurate in all material respects.
2. The Rule to which this decision relates are set out in Appendix Two to this decision.
3. Capitalised terms that are not defined in this decision have the meanings given to them
in the Rules.
Decision
4. On the conditions in paragraph 5 below, NZXR grants LIC a waiver from Rule 7.11.1 to
the extent that this Rule requires LIC to release to the market details of Nil Paid Shares
which are converted into Fully Paid Shares issued under the Reclassification.
5. The waiver in paragraph 4, above, is provided on the conditions that:
a. LIC must give to NZX for release to the market details of the Nil Paid Shares that are
converted into Fully Paid Shares for a calendar month in the form as required under
Rule 7.11.1, aggregating the number of Nil Paid Shares that have been paid up (if
any) to provide monthly totals;
b. Notices required under paragraph 5a. above must be provided to NZX no later than
on the first business day of the calendar month following the calendar month to which
the notice relates;
c. Every notice made under paragraph 5a. must clearly be identified as payment notice
for Nil Paid Shares and include a reference that the notice is being made in reliance
on this waiver and where a copy of the waiver is available; and
d. A summary of the terms of this waiver and its effect are set out in each LIC Annual
Report, provided LIC relied on this waiver at any stage during the financial period to
which the relevant Annual Report relates.
6. For the avoidance of doubt, LIC does not need to release a notice under Rule 7.11.1 if no
Nil Paid Shares have been fully paid up within the calendar month.
7. The information on which this decision is based is set out in Appendix One to this decision.
This waiver will not apply if that information is not, or ceases to be, full and accurate in all
material respects.
8. The Rule to which this decision relates is set out in Appendix Two to this decision.
Reasons
9. In coming to the decision to provide the waiver set out in paragraph 4 above, NZXR has
considered that:
a. The information provided under Rule 7.11.1 is generally required to inform investors
of the dilutionary effect on their quoted securities when securities are issued, acquired
or redeemed. The structure of the LIC Reclassification is such that each Nil Paid
Share issued to LIC shareholders carry the same dividend and voting rights attached

NZX REGULATION DECISION – 23 July 2018 3 of 6
to the Fully Paid Shares. The Nil Paid Shares were issued to ensure that the relative
values and rights attaching to the two classes of shares were equalised;
b. The number of shares displayed on the NZX register will not include Nil Paid Shares
and that LIC shareholders are not being diluted by any conversion from Nil Paid to
Fully Paid Shares. Therefore, the granting of the waiver in paragraph 4 will not offend
the policy behind Rule 7.11.1;
c. LIC submits, and NZX has no reasons not to accept, that managing approximately
10,500 shareholders and their ability to pay up their respective Nil Paid Shares at any
time (pursuant to LIC’s constitution) would otherwise create unnecessary complexity
and administrative burden to LIC if it had to release daily notices until Rule 7.11.1;
d. This waiver is limited to the Nil Paid Shares which are converted to Fully Paid Shares
issued under the Reclassification only, and will not apply to other issues, acquisitions
or redemptions of units (for example, a bonus issue of units as a result of a bonus
issue in respect of LIC shares), which could affect the value of units;
e. Currently, notifications under Rule 7.11.1 would have to be made on a daily basis.
Notifications under Rule 7.11.1 of events which could have a dilutionary effect on the
value of the units may not be highlighted due to the similarities in the announcements
and, therefore, the policy intention of this Rule is not currently being met; and
f. NZXR considers that notices which would be provided under Rule 7.11.1 to document
the payment of Nil Pad Shares is generally not of any significant value to LIC
shareholders. Further, NZXR considers that there will be no detrimental impact on
shareholders if they receive these notifications on a monthly basis.

NZX REGULATION DECISION – 23 July 2018 4 of 6
Appendix One
1. Livestock Improvement Corporation Limited (NS) (LIC) is a Listed Issuer with a non-
standard designation on the NZX Alternative Board (NZAX).
2. LIC is a registered co-operative company under the Co-operative Companies Act 1996,
and 100% of its shares carrying voting rights are held by customers of LIC who spend
more than the prescribed minimum expenditure on qualifying products and services in a
season and employees of LIC (up to a maximum of 5%)
3. LIC until 19 July 2018 had two classes of shares on issue:
a. Co-operative Control shares which are not Quoted but have voting rights attached,
as well as the right to a specified nominal priority dividend (
Co-operative Control
Shares
); and
b. Investment shares which are Quoted on the NZAX and do not carry voting rights,
but do carry a right to a dividend which is subordinate to the priority dividend paid
on Co-operative Control Shares (
Investment Shares
).
4. Co-operative Control Shares had a nominal value of $1.00. Investment Shares did not
have a nominal value, and traded at the market price on the NZAX. As at 13 July 2018,
LIC Investment Shares were traded at $3.00.
5. LIC has altered its capital structure to reclassify the two classes of shares into a single
class of ordinary shares to be Quoted on the NZAX (
Reclassification
).
6. The objective of the Reclassification was to create a sustainable capital structure that
aligns LIC’s economic and voting rights. Due to the difference in value and rights attaching
to the two classes of shares, they needed to be equalised before the reclassification can
occur.
7. In order to equalise the two classes of shares, LIC issued three nil paid Co-operative
Control shares for every one Co-operative Control Share held. Once reclassified into
Ordinary Shares, nil paid shares will carry full dividend and voting rights but will retain an
outstanding liability (Nil Paid Shares).

8. LIC also subdivided every Investment Share held into four fully paid Investment Shares.
9. LIC was placed into trading halt on market close Friday 13 July 2018 for the
Reclassification to take place between 18 and 20 July 2018.
10. The Investment Shares and Co-operative Control Shares were reclassified into ordinary
shares, following the issuance of Nil Paid Shares, maintaining the pre-restructure
shareholding proportions.
11. On Monday 23 July 2018, LIC will resume trading with a single class of ordinary shares
listed on the NZAX Board. However, the Nil Paid Shares will not be counted as part of the
number of LIC ordinary shares on nzx.com because they are not tradeable until they are
paid up by their respective shareholders.
12. Shareholders with Nil Paid Shares will be required to pay these up over time, with all
dividends paid on the Nil Paid Shares and any Ordinary Shares required to be held to
satisfy LIC’s shareholding requirement being used for this purpose. LIC shareholders may
also choose to make additional payments on their Nil Paid Shares at other times.
13. Link Market Services will maintain the register of Nil Paid Shares as these securities are

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not counted on the NZX register until they become Fully Paid Shares.
14. LIC is undertaking shareholder engagement to provide information and encourage its
shareholders to only make voluntary payments for their Nil Paid Shares on a quarterly
basis to reduce the cost and complexity of LIC’s administration. However, LIC
shareholders are able to pay up their Nil Paid Shares at any time as permitted by its
constitution.

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Appendix Two

Rule 7.11.1 Announcements
If an Issuer issues, acquires or redeems Quoted Securities, or an Issuer with Equity Securities
Quoted issues, acquires or redeems Equity Securities or Securities Convertible into Equity
Securities, then the Issuer shall give to NZX for release to the market details of the issue,
acquisition or redemption, including:
(a) Class of Security and ISIN; and
(b) the number issued, acquired or redeemed; and
(c) the nominal value (if any) and issue price, acquisition price or redemption price; and
(d) whether payment was in cash; and
(e) any amount paid up (if not in full); and
(f) the percentage of the total Class of Securities issued, acquired or redeemed; and
(g) the reason for the issue, acquisition or redemption; and
(h) the specific authority for the issue, acquisition or redemption (if any); and
(i) any terms or details of the issue, acquisition or redemption (such as an escrow
provision); and
(j) the total number of Securities of the Class in existence after the issue, acquisition or
redemption; and
(k) in the case of an acquisition of shares by an Issuer which is a company registered
under the Companies Act 1993, whether those shares are to be held as Treasury Stock;
and
(l) the dates of issue, acquisition or redemption.
Notices required by this Rule must be given to NZX for public release forthwith after the issue,
acquisition or redemption, and in respect of an acquisition effected by an Issuer through NZX's
order matching market or through the order matching market of a Recognised Stock Exchange,
no later than the end of the Business Day on which the acquisition took place. For the purposes
of Rule 7.11.1 the sale or transfer of Treasury Stock by an Issuer shall be deemed to be an
issue of Securities.