Notification of issue of CIP securities

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

18 June 2020


Notification of issue of CIP securities and warrants

Chorus Limited has issued further Crown Infrastructure Partners (CIP) securities and
warrants as per the attached notice.

Authorised By:

David Collins
Chief Financial Officer

ENDS

For further information:

Steve Pettigrew
Head of External Communications
Mobile +64 (27) 258 6257
Email: Steve.Pettigrew@chorus.co.nz
Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

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Capital Change Notice
Updated as at 8 May 2019
Page 1 of 4

Section 1: Issuer information
Name of issuer Chorus Limited
NZX ticker code CNU
Class of financial product
CIP1 Equity Securities (unquoted) & CIP1 Warrants
(unquoted)
ISIN N/a
Currency NZD
Section 2: Capital change details
Number issued/acquired/redeemed 1,219,738 CIP1 Equity Securities (unquoted).
38,097 CIP1 Warrants (unquoted).
Nominal value (if any) N/a.
Issue/acquisition/redemption price per
security
NZ
$1.000000 per CIP1 Equity Security.
Nil per CIP1 Warrant.
Nature of the payment (for example,
cash or other consideration)
Cash for CIP1 Equity Securities.
Amount paid up (if not in full) N/a.
Percentage of total class of Financial
Products issued/acquired/redeemed/
(calculated on the number of Financial
Products of the Class, excluding any
Treasury Stock, in existence)
0.26% CIP1 Equity Securities
0.27% CIP1 Warrants
For an issue of Convertible Financial
Products or Options, the principal terms
of Conversion (for example the
Conversion price and Conversion date
and the ranking of the Financial Product
in relation to other Classes of Financial
Product) or the Option (for example, the
exercise price and exercise date)
CIP1 Equity Securities are redeemable preference
shares carrying no right to vote at meetings of
holders of ordinary Chorus shares, but entitle the
holder to a right to a repayment preference on
liquidation. Dividends will become payable on a
portion of the CIP1 Equity Securities from 2025
onwards, with the portion of CIP1 Equity Securities
that attract dividends increasing over time.

Chorus may redeem CIP1 Equity Securities at any
time:

• by cash payment of the total issue price of
CIP1 Equity Securities to be redeemed; or
• by the issue of ordinary Chorus shares of a
value equal to the total issue price of the CIP1
Equity Securities to be redeemed (with those
ordinary Chorus shares valued at a 5%
discount to the 20-day VWAP for Chorus
shares traded in ordinary trading on NZX).

Page 2 of 4
In the event that the Network Infrastructure Project
Agreement dated 24 May 2011 (NIPA1) between
Chorus and Crown Infrastructure Partners Limited
(CIP) is terminated, either for a material breach by
Chorus or for a challenge by Chorus to the
enforceability of liquidated damages, service default
payments or material breach liquidated damages
under NIPA1, or in the event that the Chorus Board
resolves to pay a dividend on the CIP1 Equity
Securities but that dividend is not paid, a holder of
CIP1 Equity Securities can elect to:

• continue to hold the CIP1 Equity Securities;
• exchange the CIP1 Equity Securities for
voting preference shares; or
• exchange the CIP1 Equity Securities for
ordinary Chorus shares of a value equal to
the lesser of the "fair value" and the issue
price of the CIP1 Equity Securities (with those
ordinary Chorus shares valued at a 5%
discount to the 20-day VWAP for ordinary
Chorus shares traded in ordinary trading on
NZX).

CIP1 Warrants are an option to acquire ordinary
Chorus shares on a specified exercise date at a set
strike price.

CIP1 Warrants are issued for no consideration with
each tranche of CIP1 Equity Securities.

Each CIP1 Warrant gives the holder the right, on a
specified exercise date, to purchase an ordinary
Chorus share at a set strike price. The strike price is
based on a total shareholder return of 16% per
annum on ordinary Chorus shares over the relevant
period. Therefore, a holder of a CIP1 Warrant is only
likely to exercise the CIP1 Warrant if total
shareholder return on ordinary Chorus shares has
exceeded 16% per annum over that period.

The exercise dates correspond to the repayment
dates for the CIP1 Debt Securities and the dates on
which dividends become payable on an increased
proportion of CIP1 Equity Securities, and will
therefore be between 2025 and 2036.

Further information regarding the terms of the CIP1
Equity Securities and the CIP1 Warrants is set out in
the summary of CIP1 Securities which is available at
https://company.chorus.co.nz/reports
.

Page 3 of 4
Reason for issue/acquisition/redemption
and specific authority for
issue/acquisition/redemption/ (the
reason for change must be identified
here)
The funds are to be used by Chorus in the
construction of the Ultra-Fast Broadband network in
New Zealand.

The CIP1 Equity Securities and CIP1 Warrants have
been issued pursuant to:

• the terms of the subscription agreement
between Chorus and CIP dated
9 November 2011, as amended by
agreements between Chorus and CIP dated
18 September 2016 and 26 January 2017
(UFB1 Subscription Agreement);
• a call notice issued by Chorus to CIP on
15 June 2020 pursuant to the terms of the
UFB1 Subscription Agreement; and
• a Chorus Board resolution passed on
3 April 2012.
Total number of Financial Products of
the Class after the
issue/acquisition/redemption/Conversio
n (excluding Treasury Stock) and the
total number of Financial Products of
the Class held as Treasury Stock after
the issue/acquisition/redemption.
462,052,071 CIP1 Equity Securities (unquoted)
14,216,213 CIP1 Warrants (unquoted)
No CIP1 Equity Securities or CIP1 Warrants are held
as treasury stock.
In the case of an acquisition of shares,
whether those shares are to be held as
treasury stock
N/a.
Specific authority for the issue,
acquisition, or redemption, including a
reference to the rule pursuant to which
the issue, acquisition, or redemption is
made
Board resolution passed on 3

April

2012.

The CIP1 Equity Securities and CIP1 Warrants have
been issued under listing rule 4.2 pursuant to a
waiver dated 30 November 2011.
Terms or details of the issue,
acquisition, or redemption (for example:
restrictions, escrow arrangements)
The terms of issue are as set out in the UFB1
Subscription Agreement. Further information
regarding the terms of the CIP1 Equity Securities is
set out in the summary of CIP1 Securities which is
available at https://company.chorus.co.nz/reports
.
Date of issue/acquisition/redemption 17 June 2020
Section 3: Authority for this announcement and contact person
Name of person authorised to make this
announcement
Elaine Campbell
General Counsel & Company Secretary
Contact person for this announcement
Brett Jackson
Investor Relations Manager
Contact phone number +64 4 896 4039
+64 27 488 7808
Contact email address Brett.Jackson@chorus.co.nz

Page 4 of 4


Date of release through MAP 18 June 2020