Originally Posted by
Bilo
Onthemoney a question for you.
On what point of law do you say that "NZO can only buy back shares"?
And how do you see that stopping NZO buying back the 2008 Options?
Secondly what is to stop NZO offering to convert options to shares, buy them back for (say)15c, and cancel that share?
I didn't see anything that would stop the company from buying the options back on market, but that may be what you are referring to.
I had a look at my prospectus and it was difficult to tell (without a complete knowledge of company constitution, the Companies Act and NZX rules). The prospectus refered me to Brian Roulston (are you following Brian?) if I had a problem with this investment. And I do.
A few snippets from the Prospectus indicate (to me anyway) that change to option terms is up to us:
"NZ PART A 7. Can the investment be altered?
The rights and obligations attaching to 2008 Options and/or Shares can only be altered by special resolutions passed at a general meeting of Option holders and Shareholders of NZOG, respectively.
Australia PART B 7.9
“Under the companies Act 1993, NZOG can cancel its shares
“Buyback of Shares
Subject to the Companies Act 1993, the Constitution and the Listing Rules, NZOG may repurchase its shares from Shareholders.
Variation of Rights Attaching to Shares (and other securities)
The rights attaching to a class of Shares can only be varied with the sanction of a special resolution passed at a separate general meeting of the holders of that class of shares and any other class of securities (for example 2008 Options) which are affected. ……A variation of the rights attached to the 2008 Options will be treated as also affecting the rights attached to the Shares.”
Some danger that this is taken out of context, and the prospectus may have to be read in conjunction with NZOG’s Constitution but anything seems possible. This includes waiting until next year and letting us shareholders (and option holders) elect not to take up our options.
Surely as shareholders, given that the company doesn't need to touch us for the couple of hundred million NZD, and has no stated use for it, we would vote to have the 2008 share options cancelled for this small amount instead?