Waiver from NZX Listing Rule 7.8.5(b)

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03.03.2021
NZ RegCo Decision
Promisia Healthcare Limited (PHL)
Application for waivers from NZX Main Board Listing
Rules 7.8.5(b)

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Background
1. 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.
2. The Rule to which this decision relates is set out in Appendix Two.
3. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules.
Waiver from Listing Rule 7.8.5(b)
Decision
4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information
provided by Promisia Healthcare Limited (PHL) is complete and accurate in all material respects,
NZX Regulation Limited (NZ RegCo) grants PHL a waiver from NZX Listing Rule 7.8.5(b) (Rule),
to the extent that this Rule would otherwise require PHL to provide an Appraisal Report to
accompany its notice of special meeting of shareholders dated 24 March 2021 (Notice).
5. The waiver in paragraph 4 is provided on the conditions that:
a. directors of PHL (Directors) who are independent of the Brankin Family Interest Trust
(Independent Directors) certify to NZ RegCo, that in the opinion of each of the Independent
Directors, the Capitalisation Shares and Investment Shares are in the best interest of, and
fair and reasonable to PHL and all non-associated Shareholders;
b. the Board of PHL (the Board) certifies to NZ RegCo, that in the opinion of each of the
Directors, the Director Shares are in the best interests of, and fair and reasonable to PHL and
non-associated Shareholders;
c. the waiver is disclosed in the Notice; and
d. PHL completes its share purchase plan offer (SPP) to all Shareholders at $0.001 per Share
prior to 31 May 2021 to give all Shareholders an opportunity to subscribe for Shares at the
same price as under the Resolutions.
Reasons
6. In coming to the decision to provide the waiver set out in paragraph 4 above, NZ RegCo has
considered that:
a. the policies behind the requirement for an appraisal report under Rule 7.8.5(b) are to ensure
that:
i) shareholders receive an independent evaluation that allows them to understand and
scrutinise the merits of a proposed transaction where directors or their associated
persons are the majority participants in an equity issue;
ii) where directors (and their associated persons) are predominantly participating in an
issue of equity securities, there is independent assurance provided to Shareholders that
the terms of the issue have been set on an arm’s length basis; and
iii) to identify and highlight for Shareholders where Directors (and their associated persons)
may be receiving a benefit or opportunity which Shareholders, generally, are not
receiving.

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b. PHL submits, and NZ RegCo has no reason not to accept, that this policy is not offended
because:
i) the growth strategies that PHL continues to have are consistent with the disclosures
made to Shareholders last year in connection with the Reverse Transaction; and

ii) the purpose of the Share Issues is a linear decision and is not complicated or difficult for
Shareholders to understand. PHL is seeking to preserve and raise cash for the PHL’s
known growth strategies to pay bona fide debts to directors and their associated persons;

c. shareholders had previously approved the issue of up to 25.1 billion shares in PHL (in
aggregate) at $0.001 per share in 11 June 2020;
d. the dilution effects of the Share Issues will be outlined in the Notice so that Shareholders can
make an informed voting decision;
e. Shareholders will have an opportunity to recover dilution, at the same price, through the SPP;
f. the certification conditions in this waiver provide comfort that the Independent Directors and the
Board consider that the Share Issues are in the best interests of PHL and the non-associated
Shareholders;
g. NZ RegCo has reviewed the relevant Notice and is satisfied that it contains sufficient information
regarding Share Issues to enable shareholders to understand the effects of the Share Issues;
and
h. there is precedent for this decision.

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Appendix One
1. PHL is a Listed Issuer with Equity Securities Quoted on the NZX Main Board.
2. PHL operates in the aged care industry and currently owns three aged care facilities and leases a
fourth (the Facilities). The acquisition of the Facilities (as a reverse listing transaction) was
approved by the shareholders of PHL (the Shareholders) in June 2020 and completed in October
2020 (the Reverse Transaction).
3. On 16 December 2020, PHL advised the market that it intended to put to Shareholders resolutions
to authorise the issue of fully paid ordinary shares in PHL (Shares) at an issue price of $0.001 per
Share (Issue Price) being:
a. an issue up to 1,557,683,100 Shares to the Brankin Family Interest Trust (a trust associated
with Mr. Thomas Brankin) (the Trust) to capitalise a loan outstanding to the Trust (the
Capitalisation Shares);
b. an issue up to 300,000,000 Shares to the Trust for a cash subscription of $300,000 (the
Investment Shares); and
c. an issue up to 92,683,333 Shares to certain directors of the Company in part satisfaction of
accrued but unpaid directors’ fees (the Director Shares),
(together, the Share Issues).
4. Shareholder approval for the issue of Capitalisation Shares is required under Rule 4.2.1(a) given
that the Trust is an Associated Person of Mr. Thomas Brankin, a director of PHL. Shareholder
approval for the issue of Investment Shares is required under Rule 4.2.1(a) on the same basis.
Shareholder approval for the issue of Director Shares is required under Rule 4.2.1(a) given that a
Listed Issuer may only, in limited circumstances that are not applicable here, issue shares to a
director without shareholder approval. As a result, PHL proposes to obtain shareholder approvals
for each of the Share Issues by way of ordinary resolutions pursuant to Rule 4.2.1(a) (the
Resolutions).
5. Rule 7.8.5(b) requires that a notice of meeting to consider a resolution for an issue of Equity
Securities be accompanied by an appraisal report, if that issue is intended or is likely to result in
more than 50% of those Equity Securities being issued to a director or an Associated Person of a
director. The Resolutions outlined in the Notice contemplate that 100% of the shares to be issued
will be issued to PHL’s directors and/or an Associated Person of a director.
6. In connection to the Reverse Transaction, shareholders received:

a. a notice of meeting including resolutions to authorise the issue of up to 25.1 billion shares in
PHL (in aggregate) at $0.001 per share (the 2020 Approval);

b. an appraisal report / independent advisers report from Simmons Corporate Finance on the
merits and fairness of the Reverse Transaction;

c. a listing profile on PHL as owner of the Facilities; and

d. audited financial statements of the Facilities, and pro forma financial information for PHL, for
the period ending 31 March 2020.

7. Under the 2020 Approvals, approvals were given for Shares to be issued at $0.001 per Share being:

a. 6.75 billion Shares to wholesale investors for cash;

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b. 4 billion Shares to the owner of a Facility being leased by PHL in accordance with an option to
purchase; and

c. 5 billion shares to Shareholders under the SPP scheduled for 3 March 2021.

8. Given the SPP being offered in March 2021 at $0.001 per Share, Directors are not receiving an
opportunity that will not be available to all Shareholders.
9. The Brankin Family Interest Trust may increase its control percentage of voting securities in PHL
through the Share Issues, however:

a. any increase is limited by the Trust’s creep right under the Takeovers Regulations 2000;

b. any increase will be offset by further issuances made under the 2020 Approvals; and

c. strong demand for the SPP will cause the Trust’s control percentage to ultimately decrease.

10. Any potential negative effects will be appropriately disclosed to shareholders through the Notice.
11. Detailed information on the Resolutions can be found in the Notice.

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Appendix Two
Rule 7.8 Notices of Meeting
7.8.5 A notice of meeting to consider a resolution of the nature referred to in Rule 7.8.4 (other than
a resolution to permit an issue under Rule 4.7.1) must be accompanied by an Appraisal
Report if:
(a) the resolution is required by Rule 4.13,
(b) more than 50% of the Financial Products to be issued are intended or likely to be
acquired by Directors or Associated Persons of Directors, or
(c) more than 50% of the Financial Products to be acquired or redeemed or the financial
assistance to be given is intended or likely to go to Directors or Associated Persons
of Directors.