CNU – Re-document Waiver from NZX Listing Rules and Ruling

NZ RegCo

0


9 November 2026
NZ RegCo Decision
Chorus Limited (CNU)

Application for waiver from NZX Listing Rules 2.3.2, 4.1.1,
4.1.2, 4.2.1 and ruling from NZX Listing Rule 4.9.1

NZ RegCo

1


Background
1. This waiver decision re-documents a prior waiver and ruling decision granted by NZX Regulation dated
3 April 2020.
2. The information on which these decisions are based is set out in Appendix One. These waivers will not
apply if that information is not, or ceases to be, full and accurate in all material respects.
3. The NZX Listing Rules (Rules) to which these decisions relate are set out in Appendix Two.
4. Capitalised terms that are not defined in these decisions have the meanings given to them in the Rules.
Waivers from Rules 2.3.2(c) and 2.3.2(d)
Decision
5. Subject to the condition in paragraph 6 below, and on the basis that the information provided to NZ
RegCo by CNU is complete and accurate in all material aspects, NZ RegCo grants CNU waivers from
Rules 2.3.2(c) and 2.3.2(d), to enable CNU’s constitution to include a restriction on who can be a
Director of CNU, namely prohibiting Associated Persons of Telecommunications Services in New
Zealand from being CNU Directors.
6. The waiver in paragraph 5 is granted on the condition that this waiver is summarised in each annual
report of CNU (or the annual report contains a reference to where this information can be found on
CNU’s website), and any announcement made by CNU under Rule 2.3.2(c) and 2.3.2(d).
Reasons
7. In coming to the decision to provide the waiver set out in paragraph 6 above, NZ RegCo has
considered that:
a. the Crown required CNU to enter into a Deed as a condition to CNU’s participation in the UFB
initiative which provides for restrictions on who can be a CNU Director; and
b. the restrictions on CNU Director nominations will be appropriately highlighted to CNU
shareholders by virtue of the condition contained in paragraph 6 above.
Waivers from Rules 4.1.1, 4.1.2 and 4.2.1.
Decision
8. On the basis that the information provided to NZ RegCo by CNU is complete and accurate in all
material aspects, NZ RegCo grants CNU waivers from the requirement contained in Rules 4.1.1, 4.1.2
and 4.2.1 for CNU to obtain specific shareholder approval, by Ordinary Resolution, for the issue of
NIFFCo Equity Securities and NIFFCo Warrants.
Reasons
9. In coming to the decision to provide the waiver set out in paragraph 8 above, NZ RegCo has
considered that:
a. CNU submitted, and NZ RegCo has no reason not to accept, that it would be impossible for
shareholders to vote separately on the issue of the NIFFCo Equity Securities and NIFFCo
Warrants as the issue of those Securities was a condition of the Demerger;
b. the Demerger was undertaken to allow CNU to participate in the UFB initiative;

NZ RegCo

2


c. the NIFFCo Equity Securities and NIFFCo Warrants were an integral part of the successful bid for
CNU to participate in the UFB initiative;
d. the terms and conditions of the issue of the NIFFCo Equity Securities and NIFFCo Equity
Warrants have been settled following extensive negotiations between TEL and NIFFCo; and
e. all material details of the NIFFCo Equity Securities and NIFFCo Warrants, including all material
details of their terms of issue, and conversion and exercise, and the fact that in certain
circumstances CNU shares could be issued pursuant to the terms of the NIFFCo Equity
Securities and/or the NIFFCo Warrants in a manner that is dilutive to CNU shareholders were
disclosed in the Scheme Booklet.
Ruling on Rule 4.9.1(b)
Decision
10. On the basis that the information provided to NZ RegCo by CNU is complete and accurate in all
material aspects, for the purpose of Rule 4.9.1(b) in relation to CNU, NZ RegCo rules that:
a. any conversion of NIFFCo Equity Securities into CNU ordinary shares;
b. any conversion of NIFFCo Equity Securities into Preference Shares;
c. any conversion of Preference Shares into CNU ordinary shares; and
d. any exercise of the NIFFCo Warrants in relation to which CNU issues CNU ordinary shares;
falls within the ambit of Rule 4.9.1(b)
Reasons
11. In coming to the decision to provide the ruling set out in paragraph 10 above, NZ RegCo has
considered that:
a. CNU submitted that the NIFFCo Equity Securities are convertible into CNU ordinary shares and
into voting preference shares (which carry the right to convert into ordinary CNU shares on
equivalent terms to the NIFFCo Equity Securities);
b. CNU also submitted that the NIFFCo Warrants provide the holder of a NIFFCo Warrant with a
right to purchase CNU ordinary shares at a specified strike price;
c. the material terms of the conversion of each of the NIFFCo Equity Securities and exercise of the
NIFFCo Warrants were appropriately disclosed in the Scheme Booklet;
d. Rule 4.9.1(b) allows an Issuer to issue Equity Securities upon conversion of an Equity Security, if
the terms of those securities provide for conversion to the kind of security issued;
e. as the issue of the NIFFCo Equity Securities and NIFFCo Warrants was an integral part of the
Demerger and TEL shareholders voted on the Demerger, it would not be appropriate for the
conversion of the NIFFCo Equity Securities and NIFFCo Warrants to be individually voted on by
CNU shareholders; and
f. the ruling would align with the above sought waivers from Rules 4.1.1, 4.1.2, and 4.2.1.

NZ RegCo

3


Waiver from Rule 4.14.1(e).
Decision
12. On the basis that the information provided to NZ RegCo by CNU is complete and accurate in all
material aspects, NZ RegCo grants CNU a waiver from Rule 4.14.1(e) to the extent necessary to allow
CNU to redeem the NIFFCo Equity Securities in accordance with their terms of issue.
Reasons
13. In coming to the decision to provide the waiver set out in paragraph 12 above, NZ RegCo has
considered that:
a. the NIFFCo Equity Securities provide CNU with a right of redemption in certain prescribed
circumstances, but given the waiver granted to CNU in respect of Rules 4.1.1, 4.1.2, and 4.2.1
above, will not be issued in accordance with Rule 4.14.1(e);
b. the material terms of the NIFFCo Equity Securities (including the material terms relating to the
ability for CNU to redeem the NIFFCo Securities) were appropriately disclosed in the Scheme
Booklet; and
c. NZ RegCo accepts the redemption of the NIFFCo Equity Securities could have been effected
pursuant to Rule 4.14.1(e) but for the fact that approval of the terms of issue were effectively
given by TEL shareholders in the approval of the overall Demerger resolution, rather than specific
approval being provided under Rule 4.14.1(e).

NZ RegCo

4


Appendix One
1. Chorus Limited (CNU) demerged from Telecom Corporation of New Zealand Limited (TEL) (now Spark
New Zealand Limited) in 2011 to become a publicly listed network services operator. This demerger
(Demerger) was a condition of the agreements providing for CNU’s participation in the New Zealand
Government’s ultra-fast broadband (UFB) initiative.
2. The Demerger was implemented by way of a High Court Scheme of Arrangement under Part XV of the
Companies Act 1993 following approval by TEL shareholders at its 2011 Annual Meeting (the
Demerger AGM). TEL shareholders were provided with a Scheme Booklet (the Scheme Booklet)
which was approved by NZX Regulation prior to the Demerger AGM.
3. National Infrastructure Funding and Financing Limited (NIFFCo) (formerly Crown Infrastructure
Partners and Crown Fibre Holdings Limited) is the entity that was formed by the Government to,
amongst other things, manage the UFB initiative. NIFFCo invested, at CNU’s election, up to
approximately $1.33 billion in CNU as the network was built via subscription for securities funded and
issued in different build phases. For the first phase of the UFB network build (UFB1), the total funding
received by CNU over the period of UFB1 network construction was $924 million in return for the
following securities (NIFFCo Securities):
a. Non-voting redeemable preference shares, which entitle the holder to a right to a repayment
preference on liquidation and include the right to dividends in certain circumstances, and which
are convertible into ordinary CNU shares in certain circumstances (NIFFCo Equity Securities);
b. Non-interest bearing repayable debt securities (the NIFFCo Debt Securities);
c. Warrants issued for nil consideration which allow the holder to subscribe for CNU shares on
certain exercise dates, where the strike price is based on a total shareholder return on CNU
shares of 16% per annum (NIFFCo Warrants).
4. For the second phase of the UFB network build (UFB2 and UFB2+), different funding rates applied.
Total NIFFCo funding received by CNU for the second phase was $411 million. In return for the
NIFFCo funding for UFB2 and UFB2+, NIFFCo Equity Securities and NIFFCo Debt Securities were
issued on similar terms as UFB1 securities but have different dividend entitlement dates (for NIFFCo
Equity Securities) and different redemption dates (for NIFFCo Debt Securities). There are no NIFFCo
Warrants in relation to UFB2 and UFB2+ funding.
5. The Crown required that CNU enter into a Deed Relating to Certain Operational and Governance
Undertakings (Deed) to protect the Crown’s interest in its investment into CNU in the context of the
UFB initiative.
6. Accordingly, CNU’s Constitution currently reflects certain provisions of the Deed as follows:
a. restrictions on candidates for director nominations – these are reflected in clause 17.3 of CNU’s
Constitution as follows: “No person who is an Associated Person of a person which provides
Telecommunications Services in New Zealand (other than the services to be provided by Chorus)
shall be appointed or hold office as a director.”; and
b. the issue of certain Equity Securities to NIFFCo, including the NIFFCo Equity Securities and
NIFFCo Warrants.
Removal of Ownership Threshold and Transfer Restrictions
7. As part of the Demerger, certain restrictions in respect of the ownership and transfer of CNU shares
were included in CNU’s constitution (Ownership and Transfer Restrictions). These constitutional
arrangements were permitted by way of waivers from the Rules and required CNU, as a condition of
these waivers, to bear a non-standard designation.

NZ RegCo

5


8. On 4 August 2026, CNU and the Crown executed an unconditional variation to the Deed to enable the
removal of the Ownership and Transfer Restrictions from CNU’s constitution subject to shareholder
approval by special resolution at CNU’s 2026 annual shareholders meeting.
9. On 4 November 2026, CNU’s shareholders approved removal of the Ownership and Transfer
Restrictions by adopting a replacement CNU constitution which became effective on 9 November. As
the Ownership and Transfer Restrictions no longer apply, CNU does not require any waivers in relation
to the Ownership and Transfer Restrictions.

NZ RegCo

6


Appendix Two
Rule 2.3.2 An Issuer must comply with the following Director nomination process:
(a) the closing date for nominations must be no more than two months before the
date of the relevant meeting at which the election is to take place,
(b) the closing date for nominations must be announced to the market at least 10
Business Days prior to such closing date,
(c) there must be no restriction on who may be nominated as a Director, unless:
(i) the Governing Document requires Directors to hold certain Financial
Products to qualify as a Director, or
(ii) applicable legislation restricts who may be a Director of the Issuer,
(d) subject to (c) above, there must be no precondition to the nomination of a Director
other than compliance with the time limits in this Rule, and
(e) details of all nominations received prior to the closing date (and not later
withdrawn) must be included in the notice of the relevant meeting.
Rule 4.1 Issue of New Equity Securities
Rule 4.1.1 Except as provided in Rule 4.1.2, an Issuer must only issue Equity Securities with approval
by Ordinary Resolution in accordance with Rule 4.2.1.
Rule 4.1.2 An Issuer may issue Equity Securities, without approval by Ordinary Resolution, by way of:
(a) a pro-rata Rights offer, bonus issue or a Share Purchase Plan in accordance with
Rule 4.3 and, if applicable, Rule 4.4,
(b) an issue under an Issuer’s 15% placement capacity in accordance with
Rule 4.5.1,
(c) an issue to Employees, in accordance with Rule 4.6, or
(d) other issues for dividend reinvestment plans, director remuneration, takeovers,
amalgamation, conversions and Minimum Holdings in accordance with Rules 4.7
to 4.9.
Rule 4.2.1 Shareholder approval for Issues by Ordinary Resolution
For the holders of Equity Securities to approve an issue of Equity Securities by the Issuer,
the precise terms and conditions of the issue must have been approved by:
(a) separate Ordinary Resolutions of each Class of Quoted Equity Securities whose
rights or entitlements could be affected, or

NZ RegCo

7


(b) if a Class of Quoted Equity Securities were issued on terms that the holders
would vote together with the holders of another Class or Classes of Equity
Securities on a resolution of the nature referred to in Rule 4.2.1(a), a single
resolution of all such Classes of Equity Securities voting together.
Rule 4.9 Issues relating to takeovers, conversions, minimum holdings and
amalgamations
Rule 4.9.1 An Issuer may issue Equity Securities if:
(a) the issue is in consideration of an offer made by the Issuer in accordance with:
(i) the Takeovers Code or a scheme of arrangement under Part 15 of the
Companies Act 1993, or
(ii) the takeover regime of a jurisdiction other than New Zealand which NZX
considers provides a similar or greater level of protection to the recipients
of the offer as the Takeovers Code or Appendix 3, and
the offer is made to all holders (other than the Issuer) of any Equity Securities in
any other entities Listed on the Main Board or on another stock exchange, except
if the other entity is an Associated Person of the Issuer or of any Director of the
Issuer,
(b) the issue of Equity Securities (Security B) is made on Conversion of any
Financial Product (Security A), and
(i) the terms of issue of Security A provided for the Conversion to Security B
and the issue of Security A was approved in the manner set out in
Rule 4.2.1 or Security A was issued in accordance with any of Rules 4.3,
4.5.1, 4.6, 4.8 or 4.9.1(a) (whether or not any of the Rules quoted applied
to the issue of Security A), or
(ii) the issue of Security B is approved in the manner set out in Rule 4.2.1, or
Security B is issued in accordance with Rule 4.5.1 or Rule 4.6,
(c) the issue is made to bring an existing holder’s holding up to a Minimum Holding,
or
(d) the issue is made under an arrangement, amalgamation or compromise effected
through Part 13 or Part 15 of the Companies Act 1993 or an equivalent statutory
regime in a jurisdiction other than New Zealand which NZX considers is at least
as useful to the recipients.

NZ RegCo

8


Rule 4.14 Buy Backs and Redemption of Equity Securities
Rule 4.14.1 An Issuer may only acquire or redeem Equity Securities of that Issuer by:
(a) an acquisition effected through NZX’s order matching market or through the order
matching market of an Issuer’s Home Exchange,
(b) an acquisition effected in compliance with:
(i) section 60(1)(a) (read together with section 60(2)) of the Companies Act
1993,
(ii) section 60(1)(b)(ii) (read together with section 61) of the Companies Act
1993, and:
(A) not made from a Director, or an Associated Person of a
Director, of the Issuer, and
(B) not of a size which would cause the number of Equity
Securities of the same Class acquired under this
Rule 4.14.1(b)(ii) either in the 12 months preceding the date
of the acquisition or since the issuer was listed, whichever is
earlier, to exceed 15% of the total number of Equity
Securities of the same Class on issue at the commencement
of that period,
(iii) section 61(7) of the Companies Act 1993, or
(iv) sections 110 or 118 of the Companies Act 1993, or other applicable
legislation, if required by a shareholder pursuant to such sections or
legislation,
(c) a redemption in compliance with section 69(1)(a) of the Companies Act 1993,
(d) an acquisition or redemption:
(i) approved in accordance with Rule 4.16.1,
(ii) of Equity Securities that were issued under Rule 4.6, or
(iii) from a holder who holds less than a Minimum Holding, or
(e) a redemption of Equity Securities issued in compliance with Rule 4.2.1 or 4.3,
where the Issuer is bound or entitled to redeem those Equity Securities pursuant
to their terms of issue,
provided that for the purposes of Rule 4.14.1(b)(ii)(B):
(f) Financial Products which may convert to Quoted Equity Securities are deemed to
be of the same Class as the Quoted Equity Securities into which they may
convert, and
(g) the Financial Products referred to in paragraph (f) are deemed to be of the same
number as the Quoted Equity Securities to which they may Convert, except that
for the purpose of this calculation:

NZ RegCo

9


(i) in relation to the conversion ratio or conversion price, any reference
to the market price (however described) of the underlying Quoted
Equity Securities will instead be to the Average Market Price, and
(ii) any provisions for early Conversion at the option of a holder
exercisable in limited circumstances (such as due to an event of
default or change of control or similar) using a different formula or
method will be disregarded.