Telecom has formally applied to the NZX for a waiver from the Exchange’s listing rules, due to the pending structural split and spin-off of Chorus.
The exemption being sought is to NZSX Listing Rule 3.3.11, which requires that at least one third of the directors of an issuer who are the longest standing in office retire at each annual meeting.
Telecom’s request notes: “TEL has sought a waiver from Rule 3.3.11, to allow the one-third of TEL’s directors who are retiring by rotation and standing for re-election at the Demerger AGM to not be those who have been longest standing in office.
In support of that application TEL submits that:
a. The directors of TEL as at the date of the Demerger AGM will have been involved in an extensive preparatory and due diligence process in respect of the Demerger which, provided shareholders vote in favour of the proposal, will occur just over a month after the Demerger AGM. It is extremely important that the appropriate TEL directors continue in office until the implementation of the Demerger, otherwise the extensive governance arrangements which have been put in place with respect to the demerger could be jeopardised; and
b. In the context of the consideration of such a massive change in the company, TEL shareholders will not be disadvantaged by the directors not being rotated in accordance with Rule 3.3.11. Shareholders will have the opportunity to consider the boards of TEL at the next annual meeting of each company.”
The request is posted on the NZX website and follows the mailing last week of an extensive document to Telecom shareholders outlining the demerger plans and process.
The waiver request notes that Chorus was officially incorporated on July 1, pending a shareholder vote on the spin-off.
Among the requests in the waiver application is that Telecom’s current directors be regarded as newly-elected directors of the new entity, dubbed Telecom2, that will result once Chorus is separated.