Waiver from NZX Listing Rule 5.1.1(b)

NZ RegCo





18.10.2021
NZ RegCo Decision
New Zealand Rural Land Company Limited (NS) (NZL)
Application for waiver from NZX Listing Rule 5.1.1(b)

NZ RegCo





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 5.1.1(b)
Decision
4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information New
Zealand Rural Land Company Limited (NS) (NZL) is complete and accurate in all material
respects, NZX Regulation Limited (NZ RegCo) grants NZL a waiver from NZX Listing Rule (Rule)
5.1.1 to the extent required to allow NZL to enter into and perform the Transaction without
needing to obtain shareholder approval.
5. The waiver in paragraph 4 is provided on the following conditions:
a. that the Board of NZL must certify that in the opinion of each of the non-interested directors
that the Transaction:
i) is in the best interests of, and is fair and reasonable to, all shareholders of NZL;
ii) was negotiated on an arms’ length basis;
iii) does not significantly change the nature of NZL’s business, and is in accordance with the
strategy and terms set out in NZL’s Product Disclosure Statement; and
iv) is not a major transaction for NZL requiring shareholder approval for the purposes of the
Companies Act 1993.
Reasons
6. In coming to the decision to provide the waiver set out in paragraph 4 above, NZ RegCo has
considered that:
a. The policy behind Rule 5.1.1 is to regulate those transactions which will significantly change
the nature of an Issuer's business or which have a value that represents a majority of the
equity that investors hold in the Issuer and, as a result, are deemed to be so significant to the
Issuer, and therefore so likely to impact shareholders' interests, that shareholders should have
an opportunity to consider the transaction and exercise their right to vote before the
transaction can take effect. NZL has submitted, and NZ RegCo has no reason not to accept,
that the granting of this waiver will not offend the policy behind Rule 5.1.1.
b. The entry into or performance of the Transaction by NZL is aligned with NZL’s stated business
strategy and is within the ordinary course of NZL’s business, rather than being a transaction
that would change the essential nature of the business of NZL.
c. The Transaction will be funded using cash from the Capital Raise (which was raised for the
express purpose of further acquisitions of NZ dairy sector rural land), and debt facilities
provided by Rabobank, which have previously been considered and approved by
shareholders as part of the approval of the VLG Acquisition.

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d. NZL has submitted, and NZ RegCo has no reason not to accept, that obtaining shareholder
approval is undesirable and the costs of doing so would outweigh the benefits, as obtaining
shareholder approval would cause delays and there is material risk that the Vendor will go to
the open market to transact instead of entering the sale and purchase agreement with NZL. In
addition, having to seek shareholder approval for an acquisition consistent with the business
strategy endorsed by shareholders already is unduly onerous and puts the Transaction at a
material risk.
e. NZL submits, and NZ RegCo has no reason not to accept, that the Transaction is in the best
interests of the shareholders. The conditions of the waiver require the directors of NZL to give
a certification to this effect.
f. NZL will announce details of the Transaction in relation to the due diligence undertaken and
valuations of the Transaction in accordance with continuous disclosure obligations.
g. The Transaction has been negotiated on an arms’ length basis, with NZL’s independent
directors making the final decision whether to enter into the Transaction. The conditions of the
waiver require the directors of NZL to give a certification to this effect.
h. There is precedent for this decision.
Confidentiality
7. NZL has requested this decision be kept confidential until an announcement of the Transaction is
released to market.
8. In accordance with Rule 9.7.2(a), NZ RegCo grants NZL’s request.

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Appendix One
1. NZL is a Listed Issuer with Equity Securities Quoted on the NZX Main Board.
2. NZL’s main business strategy is the acquiring of New Zealand rural land and leasing it to
tenant/operators under long term leases.
3. In May 2021, NZL obtained shareholder approval under Rule 5.1.1 and section 129 of the
Companies Act 1993 to acquire the majority of its rural land assets, being fourteen large scale
dairy assets for $114 million (VLG Acquisition).
4. In June 2021, NZL performed a capital raise where NZL advised shareholders that the express
purpose of the capital raise was to acquire further New Zealand rural land, predominantly in the
dairy sector (Capital Raise).
5. After undertaking due diligence through its manager, NZL now proposes to enter into a sale and
purchase agreement with DF1, Limited and DF3, Limited as partners of the Dairy Farms
Partnership (the Vendor) to acquire six dairy assets of approximately 3,522 hectares located in
the South Island (the Transaction) for consideration of $60.64 million (subject to final
adjustments and transaction fees).
6. The Transaction will be paid wholly in cash and will consist of $26.7 million from the Capital Raise
and $34.2 million from debt facilities with Rabobank.
7. The Vendor will be the initial tenant of the dairy assets on a short-term lease until 31 May 2022.
From 1 June 2022, entities associated with Williams Holdings Limited (WHL) will commence a 10-
year lease for the dairy assets. Both the short-term and long-term lease will yield an annual gross
lease rate of over 5%, which is consistent with NZL’s minimum gross lease rate of 4.5% (which
was advised during the company’s Initial Public Offering in December 2020).
8. The Transaction has been negotiated on an arms’ length basis and does not constitute a related
party transaction under the Rules. The Transaction represents implementation of NZL’s business
strategy that has previously been voted on by shareholders and significantly invested against.
9. The Transaction constitutes a Major Transaction for the purposes of Rule 5.1.1 due to the Gross
Value of the Transaction exceeding 50% of NZL’s AMC. However, the Gross Value of the
Transaction represents approximately 33% of the value of NZL’s total assets.
10. The Board of NZL submit that the unanimous shareholder approval received for the VLG
Acquisition and subsequent shareholder participation in NZL’s recent capital raisings shows an
endorsement for NZL entering into transactions that materially align with NZL’s strategies.
11. NZL submits that there is a material risk that the Transaction would not proceed if it became
contingent on shareholder approval.

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Appendix Two
Rule 5.1 Disposal or Acquisition of Assets
5.1.1 An Issuer must not enter into any transaction, or a related series of transactions, to acquire,
sell, lease (whether as lessor or lessee), exchange, or otherwise (except by way of charge)
dispose of assets where the transaction or related series of transactions:
(a) would significantly change, either directly or indirectly, the nature of the Issuer‘s
business, or
(b) involves a Gross Value above 50% of the Average Market Capitalisation of the
Issuer,
unless the transaction, or related series of transactions, is:
(c) approved by an Ordinary Resolution, or a special resolution if approval by way of
special resolution is required under section 129 of the Companies Act 1993, or
(d) conditional upon such approval required by paragraph (c) above.