Special Meeting Report, March 18th 2022
Click here for NZSA Assessment and Voting intentions
A very good summary of the reasons for this meeting were published by NZSA in its Proxy Voting Intention, and by the company, in its notice of meeting.
It was disappointing to shareholders that a capital injection was required so soon after purchase of King Honey, but NZSA decided to support the resolutions on the basis that both seller and buyer were subscribing new shares, and that the issue was at a 37.5% premium to the current price. The dilution of existing holdings is to be 8.8%. The Chairman’s letter to shareholders made it clear that the company had considered taking legal action against the seller, but had decided that it was in the company’s best interests to settle for a share issue. We agreed with that.
The two resolutions were:
- That existing shareholder MTL be issued 42.6m shares at 8.8c each
- That Jarvis Trust be issued 25.5m shares at 8.8c each.
The independent report by Simmons concluded that the issue was fair to existing shareholders. The disclosure to NZX after the meeting showed that the resolutions were carried by 99.9% of eligible votes.
The conduct of the meeting unfortunately reflected the assumption that it was a mere formality. Grant Baker as Chair simply referred to the Simmons report and put the resolutions.
In spite of our support for the resolutions, we had reservations about the meeting. Firstly, it was an audio-only meeting; presumably because this was the cheapest way to tick off the listing rule requirements. In the event, the landline reception and the cellphone reception was so static-laden that we could barely make out what the Chair was saying. Although there was an opportunity to ask questions nobody was able to brave the unusual access system.
Secondly, the usual system for proxy holder access could not be employed, and so we had to email the registry to include our votes, and the meeting was wrapped up so quickly that our votes really needed to be emailed before the discussion to be counted.
In short, this was not a true meeting of shareholders and we concluded that even in these situations, and now that Zoom-style meetings are so accessible, audio meetings should not be employed for any shareholder meetings in future.