business associations ii

1. Business Associations II Paul Ali LAWS1092

3. Sources of equity finance ?Private equity ?On-shore public equity (ASX) ?Off-shore public equity (ADRs) or private placements (PIPES)

5. Equity vs Debt

30. Preference Shares - ASX LR 6.3 6.3 The holder of a preference share must be entitled to a right to vote in each of the following circumstances and in no others. 6.3.1 During a period during which a dividend (or part of a dividend) in respect of the share is in arrears. 6.3.2 On a proposal to reduce the entity�s share capital. 6.3.2A On a resolution to approve the terms of a buy-back agreement. 6.3.3 On a proposal that affects rights attached to the share. 6.3.4 On a proposal to wind up the entity. 6.3.5 On a proposal for the disposal of the whole of the entity�s property, business and undertaking. 6.3.6 During the winding up of the entity.

31. Types of preference shares Redeemable pref shares ?Shares redeemed via return of capital: Part 2H.2 (esp s 254K) ? Redemption can be (a) automatic, (b) at option of Co, or (c) at option of shareholder: s 254A(3) Cumulative pref shares ?Dividend entitlements carried forward to the next year if dividends are not declared in a particular year Participating pref shares ?Shareholders have a right to additional dividends (beyond fixed rate) and share in residue on a winding-up

32. Prefs (cont) Converting pref shares ?Automatic conversion of pref shares into ordinary shares Convertible pref shares ?Shareholder has option to convert pref shares into ordinary shares Reset pref shares ?Co can adjust dividend

33. Some examples CBA $700m PERLS (Preferred Exchangeable Resettable Listed Shares) Village Roadshow US$120m PRIDES (Preferred Redeemable Increased Dividend Equity Securities) QBE Insurance US$150m Feline PRIDES (Flexible Equity-Linked Exchangeable PRIDES) St George Bank $300m PRYMES (Preferred Resetting Yield Marketable Equity Securities) Coles Myer $700m ReCAPS (Reset Converting Preference Shares) Bank of Queensland $40m RePS (Reset Preference Shares) ANZ US$750m TrUEPrS (Trust Units Exchangeable for Preference Shares) Southern Cross Airports Corp $600m FLIERS (Floating rate IPO Exchangeable Reset Securities) AMCOR $300m PACRS (Perpetual Amcor Convertible Reset Securities) AMP US$900m STRYPES (Structured Yield Product Exchangeable for Stock)

38. Transfers of shares ?Shares are presumed to be freely transferable New Lambton Land & Coal Co Ltd v London Bank of Australia Ltd (1904) 1 CLR 524 ?Constitution can give directors a discretion to refuse to register a transfer of shares BUT: shareholders can seek a court order to enforce transfers, where there is no �just cause� for the refusal: s 1071F Listed Cos cannot block the transfer of shares (unless the Co is exercising a remedy in respect of an unpaid call): ASX LR 8.10

39. Transfers (cont) What about partly-paid shares? ?Assignment or novation? ?Although the Co�s constitution can confer on directors the power to refuse to register transfers, the consent of the Co is not required for transfers per se ?Both past and present members are liable in respect of the unpaid amount: s 516 ?Transferor�s liability for unpaid amount continues for up to one year after cessation of membership: s 521