NZL – Waiver from NZX Listing Rule 5.2.1

NZ RegCo

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19 January 2024
NZ RegCo Decision
New Zealand Rural Land Company Limited (NS) (“NZL”)
Application for waiver from NZX Listing Rule 5.2.1

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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 NZX Listing Rules (Rules) to which this decision relates are set out in Appendix Two.
3. Capitalised terms that are not defined in this decision have the meanings given to them in the
Rules.
4. NZX Regulation Limited (NZ RegCo) notes that a revised version of the Major and Related
Parties NZX Guidance Note was published on 18 December 2023. NZ RegCo considered the
guidance when providing NZL with an in principle decision in 2023 and making the decision to
grant this waiver.
Waiver from Listing Rule 5.2.1
Decision
5. Subject to the conditions set out in paragraph 6 below and on the basis that the information
provided by New Zealand Rural Land Company Limited (NS) (NZL) is complete and accurate in
all material aspects, NZ RegCo grants NZL a waiver from Rule 5.2.1 to the extent that this Rule
would otherwise require NZL to seek shareholder approval in relation to the Transaction and
Variation Agreement.
6. The waiver in paragraph 5 above is provided on the conditions that:
a. the Directors of NZL other than any Director who is an Associated Person of the Manager
certify that:
i. the terms and conditions of the Transaction and Variation Agreement have been
negotiated, and the Transaction and Variation Agreement will be entered into, on an
arm’s length commercial basis;
ii. NZL was not unduly influenced to enter into the Transaction and the Variation Agreement
by the Manger; and
iii. entry into the Transaction and Variation Agreement is in the best interests of NZL and the
non-interested shareholders;
b. the waiver, its conditions and implications are disclosed in NZL’s next annual report; and
c. NZL release a statement to NZX through MAP about its entry into the Transaction and
Variation Agreement and why these and the waiver is in the best interests of NZL and the
non-interested shareholders.
Reasons
7. In coming to the decision to provide the waiver set out in paragraph 5 above, NZ RegCo has
considered that:
a. the purpose of Rule 5.2.1 is to ensure that shareholders have an opportunity to consider, and
vote on, Material Transactions where there is, or may be a perception of, the potential for
undue influence by a Related Party on an Issuer’s decision to enter into a transaction or agree
to its terms. The granting of this waiver will not offend the policy behind Rule 5.2.1;

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b. the Manager will not receive favourable consideration due to the Related Party Relationships,
and that the Related Party Relationships have not unduly influenced the decision to enter
intothe terms and conditions of the Transaction and Variation Agreement, as:
i. the Manager will not be obtaining a commercial benefit from the Variation Agreement.
The fees payable by NZL under the Management Agreement are assessed based on the
net asset value of NZL or the value of transactions undertaken by NZL, and the net asset
value will therefore adjust in line with the Transaction;
ii. the terms of the Transaction have been negotiated on an arm’s length commercial basis;
and
iii. the Manager and the Purchaser are not Related Parties of each other,
c. NZL submits, and NZ RegCo has no reason not to accept, that existing NZL shareholders will
not have the value of their investment diluted due to the Transaction occurring. While NZL’s
economic interest in the land portfolio will reduce to 75%, the 25% interest will be replaced by
cash that NZL can utilise;
d. if NZL was not externally managed by the Manager, and therefore did not have the
Management Agreement in place, then the Transaction between NZL and the Purchaser
would not require NZL shareholder approval; and
e. there is precedent for the decision.
Confidentiality
8. NZL applied for this waiver in 2023 as it began negotiating the Transaction. NZL requested this
decision be kept confidential until an announcement of the Transaction is released to the market.
9. In accordance with Rule 9.7.2(a), NZ RegCo granted NZL’s request.

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Appendix One
1. New Zealand Rural Land Company Limited (NS) (
NZL
) is a Listed Issuer with ordinary shares
and warrants quoted on the NZX Main Board.
2. NZL will be entering into a transaction with an Australia-based private equity firm, ROC Partners
(
Purchaser
), in which it will acquire a direct 25% equity interest in NZL’s land portfolio for
consideration of approximately $44.2 million (
Transaction
).
3. Prior to the Transaction taking effect, NZL will undertake an intra-group restructure of its assets
and liabilities. NZL’s wholly owned subsidiary, NZRLC Dairy Holdings Limited (
NZRLC Dairy
),
currently owns NZL’s land portfolio and is the landlord under all of the leases of that land.
NZRLC Dairy will transfer all of the land and leases to a new limited partnership registered under
the Limited Partnerships Act 2008 (
New LP
). On registration and at the time of these transfers,
the limited partnership will have a general partner (
GP
) that is a wholly owned subsidiary of NZL
and one limited partner that is a wholly owned subsidiary of NZL.
4. Once the intra-group restructuring is complete, the Transaction will occur under which:
a) the Purchaser will subscribe for new units in the New LP that are equivalent to 25% of all
units on issue in the New LP (immediately following the subscription); and
b) the Purchaser will subscribe for new shares in the GP that are equivalent to 25% of all
shares on issue in the GP (immediately following the subscription),
for consideration of approximately NZ$44.2 million (
Consideration
).
5. At completion of the Transaction the Purchaser will enter into a management agreement with
New Zealand Rural Land Management Limited Partnership (Manager) to manage New LP on its
behalf (Purchaser Management Agreement).
6. The Manager manages NZL’s assets under an existing management agreement (Management
Agreement) that has been in place since NZL’s initial public offer.
7. NZL will enter into a variation (Variation Agreement) of the Management Agreement, amending
it from allowing for the management of its wholly owned subsidiaries of NZL, to entities that NZL
has a controlling interest in and to ensure any fees payable under the Management Agreement
are proportionate to NZL’s interests in the New LP. The Manager will perform the same duties,
for the same remuneration calculation for NZL as presently exists.
8. The Manager is a Related Party of NZL as it is an Associated Person of NZL. The Manager is an
Associated Person as it is the sole and exclusive manager of NZL and is able to directly or
indirectly exert a substantial degree of influence over the activities of NZL.
9. Through the Purchaser Management Agreement, the Manager will become an indirect party to
the Transaction. The Manager is a direct party to the Variation Agreement. These together are
the “Related Party Relationships”.
10. As at the date of this waiver decision, NZL’s Average Market Capitalisation (AMC) is
approximately $117 million.
11. The Transaction is a Material Transaction under limb (a) of the definition as the Consideration is
approximately $44.2 million, being over 10% of the Company’s AMC as at the date of this
Application.
12. The Variation Agreement is a Material Transaction under limb (e) of the definition as NZL pays
over 1% of its AMC as fees to the Manager over a 12-month period.

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Appendix Two
Rule 5.2 Transactions with Related Parties
5.2.1 An Issuer must not enter into a Material Transaction if a Related Party is, or is likely
to become:
a. a direct party to the Material Transaction, or
b. a beneficiary of a guarantee or other transaction which is a Material
Transaction,
unless that Material Transaction is approved by an Ordinary Resolution (such
resolution being subject.
Definitions
Material Transaction
means a transaction, or a related series of transactions, whereby an Issuer:
(a) buys, acquires, gains, leases (as lessor or lessee), sells or otherwise disposes of, assets
having an Aggregate Net Value above 10% of the Issuer’s Average Market Capitalisation,
...
(e) provides or obtains any services (including the underwriting of Financial Products or services
as an Employee) where the gross cost to the Issuer in any financial year is likely to exceed an
amount equal to 1% of the Average Market Capitalisation of the Issuer, or...
Related Party
means a person who, at the time of a Material Transaction, or at any time within the previous six
months, was:
(a) a Director or Senior Manager of the Issuer or any of its Subsidiaries,

(b) the holder of a Relevant Interest in 10% or more of a Class of Equity Securities of the Issuer
carrying Votes,

(c) an Associated Person of the Issuer or any of the persons referred to in (a) or (b), except
where the person becomes an Associated Person as a consequence of the Material
Transaction, ...

Associated Person
a person (A) is associated with, or an Associated Person of, another person (B) if:
(a) A is able, directly or indirectly, to exert a substantial degree of influence over the activities of
B (or vice versa), ...