Prospectus
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ASX MARKET RELEASE
20 November 2018
LODGMENT OF PROSPECTUS
The Agency Group Australia (ASX: AU1) (“The Agency” or “the Company”) is pleased to announce that it has today
lodged with ASIC a Prospectus for the issue of 18,333,333 (post-consolidation) fully paid ordinary shares
(“Shares”) to the shareholders of Top Level Real Estate Pty Ltd (“Top Level”) (“Consideration Shares”) for the
acquisition of all of their Top Level shares by the Company (“Acquisition”). The issue of the Consideration Shares
remains subject to satisfaction (or waiver) of the conditions precedent to the Acquisition (previously announced
on 19 September 2018).
As part of the Acquisition, the Company is seeking shareholder approval to consolidate its capital on a 1:30 basis.
Shareholder approval for the Consolidation (and other matters relating to the Acquisition) will be sought at a
general meeting of Shareholders to be held on 28 November 2018.
Only the Top Level Shareholders may accept the offer set out in the Prospectus (“Offer”). A personalised
Application Form in relation to the Offer will be issued to the Top Level shareholders (or their nominees) together
with a copy of the Prospectus.
The Prospectus also includes an offer of one Share, which shall remain open until the Closing Date of the
cleansing set out in Section 2 (immediately after Settlement) (Cleansing Offer). The Company does not currently
intend to issue Shares under the Cleansing Offer and will therefore not provide an application form for the
Cleansing Offer.
The purpose of the Cleansing Offer is to remove any trading restrictions that may have attached to Shares issued
by the Company between the date of the Prospectus and the Closing Date of the Cleansing Offer (to occur
immediately after settlement of the Acquisition).
The Prospectus also includes an offer of 333,333 post-Consolidation options to Director Adam Davey (or his
nominee), which shall remain open until the Closing Date of the Offer (Options Offer). The issue of the Options
to Mr Davey (or his nominee) is subject to shareholder approval at the general meeting to be held on 28
November 2018.
Conditional Offers
The Offer, the Cleansing Offer and the Options Offer and the issue of securities pursuant to the Prospectus, are
conditional upon:
(a) shareholders approving resolutions 1 to 12 to be put to Shareholders at a general meeting to
be held at 9:00am on 28 November 2018 (which includes the issue of the Consideration
Shares); and
(b) satisfaction (or waiver) of the outstanding conditions precedent to settlement of the
Acquisition.
In the event that the conditions to settlement are not met or waived, the offers will not proceed, and no
securities will be issued pursuant to the Prospectus.
Purpose of the offers
The purpose of the Offer is to remove the need for an additional disclosure document to be issued upon the sale
of any Shares issued to the Top Level shareholders. No funds will be raised by the Offer as the Shares the subject
of the Offer are being issued to the Top Level shareholders as consideration for the Acquisition.
The purpose of the Cleansing Offer is to remove any trading restrictions that may have attached to Shares issued
by the Company prior to the closing of the Cleansing Offer. The purpose of the Options Offer is to ensure that a
disclosure document is not required for the issue or sale of the Shares on the exercise of the Option.
The anticipated timetable for the completion of the Top Level acquisition as previously included in the
Addendum to the Notice of Meeting, as announced with ASX on 14 November and despatched to shareholders
is as follows:
Event Indicative Timing*
General Meeting of Shareholders 28 November 2018
ASX notified whether Shareholders’ approval has been granted for the Resolutions
Capital Raising completed 12 December 2018
Subject to Directors’ satisfaction that the conditions precedent in Amended and Restated 17 December 2018
Option Agreement are satisfied (or waived in accordance with its terms), Settlement, of the
Acquisition including issue of the Shares contemplated by this Notice
Commencement of trading of Shares on ASX 18 December 2018
*The Directors reserve the right to change the above indicative timetable without requiring any disclosure to Shareholders or Option
holders.
If you require further information, please contact:
Investors
The Agency Australia Ltd
Paul Niardone
T: +61 08 9204 7955
Media
Chapter One Advisors
David Tasker / Colin Jacoby
T: +61 433 112 936 / +61 439 980 359
THE AGENCY GROUP AUSTRALIA LTD
ACN 118 913 232
PROSPECTUS
For the offer of 18,333,333 Shares (on a post-Consolidation basis) to the Top Level
Shareholders (Offer).
IMPORTANT NOTICE
This document is important and should be read in its entirety. If after reading this
Prospectus you have any questions about the Securities being offered under this
Prospectus or any other matter, then you should consult your stockbroker, accountant or
other professional adviser.
The Shares offered by this Prospectus should be considered as speculative.
TABLE OF CONTENTS
1. CORPORATE DIRECTORY.............................................................................................. 1
2. TIMETABLE ..................................................................................................................... 2
3. IMPORTANT NOTES ....................................................................................................... 3
4. DETAILS OF THE OFFER.................................................................................................. 5
5. PURPOSE AND EFFECT OF THE OFFER ........................................................................... 7
6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES ................................................. 11
7. RISK FACTORS ............................................................................................................ 15
8. ADDITIONAL INFORMATION ...................................................................................... 22
9. DIRECTORS’ AUTHORISATION .................................................................................... 31
10. GLOSSARY .................................................................................................................. 32
2053091_13 i
1. CORPORATE DIRECTORY
Directors Registered Office
Philip Re (Chairman) Suite 1, GF
Paul Niardone (Managing Director) 437 Roberts Road
John Kolenda (Non-Execuitve Director) Subiaco WA 6008
Adam Davey (Non-Execuitve Director)
Telephone: + 61 8 6141 3500
Facsimile: +61 8 6141 3599
Company Secretary
Email: Stuartu@theagency.com.au
Stuart Usher Website: www.theagencygroup.com.au
Share Registry* Solicitors
Advanced Share Registry Services Steinepreis Paganin
110 Stirling Highway Lawyers and Consultants
Nedlands WA 6009 Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
Auditor*
Bentleys Audit & Corporate (WA) Pty Ltd
London House
216 St Georges Terrace
Perth WA 6000
*This entity is included for information purposes only. It has not been involved in the preparation of
this Prospectus and has not consented to being named in this Prospectus.
2053091_13 1
2. TIMETABLE
Lodgement of Prospectus with the ASIC 20 November 2018
Lodgement of Prospectus & Appendix 3B with ASX 20 November 2018
Closing Date of the Offer 14 December 2018
Issue date, Settlement and Closing Date of the 17 December 2018
Cleansing Offer
Quotation of Shares issued under the Offer 18 December 2018
Notes:
1. The above dates are indicative only and may change without notice. The Company
reserves the right to extend the Closing Date or close the Offer early without prior notice.
The Company also reserves the right not to proceed with the Offer at any time before the
issue of Shares to Applicants.
2. This Prospectus also includes a Cleansing Offer (refer to Section 4.3 for further information)
and an offer of Options to one of the Directors (Adam Davey) or his nominee, the issue of
which is subject to Shareholder approval being received at the General Meeting.
3. The above stated date for Settlement is only a good faith estimate by the Directors and
may have to be extended.
2053091_13 2
3. IMPORTANT NOTES
This Prospectus is dated 20 November 2018 and was lodged with the ASIC on
that date. The ASIC, ASX and their respective officers take no responsibility for
the contents of this Prospectus or the merits of the investment to which this
Prospectus relates.
No Shares may be issued on the basis of this Prospectus later than 13 months
after the date of this Prospectus.
No person is authorised to give information or to make any representation in
connection with this Prospectus, which is not contained in the Prospectus. Any
information or representation not so contained may not be relied on as having
been authorised by the Company in connection with this Prospectus.
It is important that investors read this Prospectus in its entirety and seek
professional advice where necessary. The Shares the subject of this Prospectus
should be considered highly speculative.
Applications for Shares offered pursuant to this Prospectus can only be submitted
on an original Application Form.
This Prospectus is a transaction specific prospectus for an offer of continuously
quoted securities (as defined in the Corporations Act) and has been prepared in
accordance with section 713 of the Corporations Act. It does not contain the
same level of disclosure as an initial public offering prospectus. In making
representations in this Prospectus regard has been had to the fact that the
Company is a disclosing entity for the purposes of the Corporations Act and
certain matters may reasonably be expected to be known to investors and
professional advisers whom potential investors may consult.
3.1 Risk factors
Potential investors should be aware that subscribing for Shares in the Company
involves a number of risks. The key risk factors of which investors should be aware
are set out in Section 7. These risks together with other general risks applicable to
all investments in listed securities not specifically referred to, may affect the
value of the Shares in the future. Accordingly, an investment in the Company
should be considered highly speculative. Investors should consider consulting
their professional advisers before deciding whether to apply for Shares pursuant
to this Prospectus.
3.2 Forward-looking statements
This Prospectus contains forward-looking statements which are identified by
words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or
‘intends’ and other similar words that involve risks and uncertainties.
These statements are based on an assessment of present economic and
operating conditions, and on a number of assumptions regarding future events
and actions that, as at the date of this Prospectus, are expected to take place.
Such forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties, assumptions and other
important factors, many of which are beyond the control of our Company, the
Directors and our management.
2053091_13 3
The Company cannot and do not give any assurance that the results,
performance or achievements expressed or implied by the forward-looking
statements contained in this prospectus will actually occur and investors are
cautioned not to place undue reliance on these forward-looking statements.
The Company has no intention to update or revise forward-looking statements,
or to publish prospective financial information in the future, regardless of
whether new information, future events or any other factors affect the
information contained in this prospectus, except where required by law.
These forward looking statements are subject to various risk factors that could
cause our actual results to differ materially from the results expressed or
anticipated in these statements. These risk factors are set out in Section 7.
2053091_13 4
4. DETAILS OF THE OFFER
4.1 The Offer
As previously disclosed by the Company, in consideration for the acquisition of
all of the Top Level Shares by Ausnet, the Company has agreed, subject to
satisfaction (or waiver) of certain conditions precedent, to issue the Top Level
Shareholders with 18,333,333 post-Consolidation Shares.
This Prospectus includes an offer of 18,333,333 Shares (on a post-Consolidation
basis) to the Top Level Shareholders which will be issued to the Top Level
Shareholders in accordance with the Amended and Restated Option
Agreement. The material terms and conditions of the Amended and Restated
Option Agreement are summarised at Section 8.4.
As part of the Acquisition, the Company is seeking Shareholder approval to
consolidate its capital on a 1:30 basis. Shareholder approval for the
Consolidation (and other matters relating to the Acquisition) will be sought at a
general meeting of Shareholders to be held on 28 November 2018.
Only the Top Level Shareholders may accept the Vendor Offer. A personalised
Application Form in relation to the Offer will be issued to the relevant Minority
Shareholders (or their nominees) together with a copy of this Prospectus.
All of the Shares offered under this Prospectus will rank equally with the Shares on
issue at the date of this Prospectus. Please refer to Section 6.1 for further
information regarding the rights and liabilities attaching to the Shares.
The purpose of the Offer is set out in Section 5.1.
4.2 Minimum subscription
The minimum subscription in respect of the Offer is the full subscription, being
18,333,333 post-Consolidation Shares.
4.3 Cleansing Offer
This Prospectus also includes an offer of one Share, which shall remain open until
the Closing Date of the Cleansing Offer set out in Section 2 (immediately after
Settlement) (Cleansing Offer). The Company does not currently intend to issue
Shares under the Cleansing Offer and will therefore not provide an application
form for the Cleansing Offer.
The purpose of the Cleansing Offer is to remove any trading restrictions that may
have attached to Shares issued by the Company between the date of this
Prospectus and the Closing Date of the Cleansing Offer set out in Section 2 (to
occur immediately after Settlement).
4.4 Options Offer
This Prospectus also includes an offer of 333,333 post-Consolidation Options to
Director Adam Davey (or his nominee), which shall remain open until the Closing
Date of the Offer set out in Section 2 (Options Offer). The issue of the Options to
Mr Davey (or his nominee) is subject to Shareholder approval at the General
Meeting and the terms of the Options are set out in Section 6.2.
2053091_13 5
Only Adam Davey (or his nominee) may accept the Options Offer. A
personalised Application Form in relation to the Options Offer will be issued
together with a copy of this Prospectus.
The purpose of the Options Offer is to ensure that a disclosure document is not
required for the issue or sale of the Shares on the exercise of the Option.
4.5 Conditional Offers
The Offer, the Cleansing Offer and the Options Offer and the issue of Securities
pursuant to this Prospectus, are conditional upon:
(a) Shareholders approving resolutions 1 to 12 to be put to Shareholders at
the General Meeting (which includes the issue of the Shares to the Top
Level Shareholders); and
(b) satisfaction (or waiver) of the outstanding conditions precedent to
Settlement.
Details of the outstanding conditions to Settlement are set out in Section
8.4(a)(ii). In the event that the conditions to Settlement are not met or waived,
the Offer and the Cleansing Offer will not proceed, and no Shares will be issued
pursuant to this Prospectus.
4.6 Acceptance
Only the Top Level Shareholders may accept the Offer. A personalised
Application Form in relation to the Offer will be issued to the relevant Minority
Shareholders together with a copy of this Prospectus.
Detailed instructions on how to complete paper Application Forms are set out
on the reverse of those forms. Applicants are not required to sign the Application
Form. Only the Top Level Shareholders may accept the Offer.
4.7 ASX listing and issue of Shares
Application will be made to the ASX within seven days after the date of this
Prospectus for Official Quotation of the Shares offered pursuant to this
Prospectus. However, Applicants should be aware that ASX will not commence
Official Quotation of any Shares until the Company has settled the Acquisition.
The fact that ASX may grant Official Quotation to the Shares is not to be taken in
any way as an indication of the merits of the Company or the Shares now
offered for subscription.
Shares issued pursuant to the Offer will be issued in accordance with the ASX
Listing Rules and timetable set out at the commencement of this Prospectus.
4.8 Overseas shareholders
This Offer does not, and is not intended to, constitute an offer in any place or
jurisdiction in which, or to any person to whom, it would not be lawful to make
such an offer or to issue this Prospectus.
4.9 Enquiries
Any questions concerning the Offer should be directed to Stuart Usher,
Company Secretary, on +61 8 6141 3500.
2053091_13 6
5. PURPOSE AND EFFECT OF THE OFFER
5.1 Purpose of the Offers
The purpose of the Offer is to remove the need for an additional disclosure
document to be issued upon the sale of any Shares issued to the Top Level
Shareholders.
No funds will be raised by the Offer as the Shares the subject of the Offer are
being issued to the Top Level Shareholders as consideration for the acquisition
by Ausnet of their Top level Shares.
The Offer is made to the Top Level Shareholders only. Accordingly, you should
not complete an Application Form in relation to the Offer unless specifically
directed to do so by the Company.
The purpose of the Cleansing Offer is to remove any trading restrictions that may
have attached to Shares issued by the Company prior to the Closing Date of the
Cleansing Offer.
5.2 Effect of the Offers
The principal effect of the Offer will be to increase the number of Shares on issue
from 85,475,629 (on a post-Consolidation basis) as at completion of the
Consolidation and the issues set out in Section 5.4 to 103,808,962 Shares.
The Cleansing Offer will not have any effect on the Company as the Company
does not currently intend to issue Shares under the Cleansing Offer.
5.3 Pro-forma balance sheet
The unaudited balance sheet as at 31 August 2018 and the unaudited pro-
forma balance sheet as at 31 August 2018 shown below have been prepared
on the basis of the accounting policies normally adopted by the Company and
reflect the changes to its financial position.
The pro-forma balance sheet has been prepared assuming full subscription
under the Offer and including expenses of the Offer.
The pro-forma balance sheet has been prepared to provide investors with
information on the assets and liabilities of the Company and pro-forma assets
and liabilities of the Company as noted below. The historical and pro-forma
financial information is presented in an abbreviated form, insofar as it does not
include all of the disclosures required by Australian Accounting Standards
applicable to annual financial statements.
2053091_13 7
Un-Audited Pro forma
31-Aug 31-Aug
2018 2018
$ S
Current Assets
Cash and cash equivalents 853,278 6,387,941
Trade and other receivables 3,423,825 6,353,700
Current tax asset 191,102 214,774
Total Current Assets 4,468,205 12,956,415
Non Current Assets
Property, Plant and Equipment 670,607 3,078,063
Intangible Assets 4,462,505 31,877,280
Deferred tax - 3,610,916
Financial Assets 408,182 528,653
Total Non Current Assets 5,541,294 39,094,912
Total Assets 10,009,499 52,051,327
Current Liabilities
Trade and Other Payables 8,243,557 11,807,514
Borrowings 1,100,000 250,000
Provisions 354,420 767,420
Total Current Liabilities 9,697,977 12,824,934
Non Current Liabilities
Borrowings - 17,639,350
Lease incentives - 779,279
Trade and other creditors - 396,146
Deferred tax liabilities 188,220 350,464
Provisions 63,940 542,381
Total Non Current Liabilities 252,160 19,707,620
Total Liabilities 9,950,137 32,532,554
Net Assets/(Liabilities) 59,362 19,518,773
Equity
Contributed Equity 11,480,382 30,928,382
Reserves 566,430 566,430
Accumulated Losses (11,987,450) (11,976,039)
Total Equity/(Net Deficiency) 59,362 19,518,773
2053091_13 8
5.4 Effect on capital structure
The effect of the Offer on the capital structure of the Company (and other
matters for which Shareholder approval will be sought at the General Meeting) is
set out below.
Shares
Number
Shares currently on issue 683,793,034
Shares on issue following the Consolidation 22,793,101
Bonus offer of Shares to current Shareholders1 13,675,861
Shares to be issued to settle certain Top Level loans2 16,666,667
Shares to be issued for the Capital Raising3 28,000,000
Shares to be issued to the lead manager of the Capital 840,000
Raising (or its nominee)4
Shares to be issued to Paul Niardone5 833,333
Shares to be issued to the vendors of Vicus Residential Pty 2,666,667
Ltd6
Shares offered pursuant to the Offer 18,333,333
Total Shares on issue after completion of the Offers 103,808,962
Notes:
1. On 17 October 2018 the Company announced that it would conduct a bonus issue of
Shares to all Shareholders on the register as at the record date of 3 December 2018.
2. The Company has agreed to issue, subject to Shareholder approval, 16,666,667 Shares to
settle certain loans owing by Top Level.
3. It is a condition of Settlement that the Company complete a capital raising of no less than
$8,400,000 via the issue of Shares at an issue price of no less than $0.30 per Share (on a
post-Consolidation basis).
4. The Company has agreed to issue up to 840,000 Shares to the lead manager of the
Capital Raising (or its nominee) as consideration for acting as lead manager of the
Capital Raising.
5. Subject to Shareholder approval, the Company will issue its Managing Director, Paul
Niardone (or his nominee) with these Shares.
6. The Company has entered into a terms sheet with the shareholders of Vicus Residential
Pty Ltd (Vicus Residential) to acquire all of the shares of Vicus Residential. Shareholder
approval for this issue was obtained on 15 November 2018. These Shares will be issued at
Settlement.
2053091_13 9
Options
Number
Options currently on issue:
Unquoted Options currently on issue 162,666,667
24,076,072
Quoted Options currently on issue
Options on issue post-Consolidation:
Unquoted Options
5,422,223
Quoted Options
802,536
Options offered pursuant to the Options Offer 333,333
Total Options on issue after completion of the Offers 6,558,092
Performance Shares
Number
Performance Shares currently on issue 113,333,334
Performance Shares on issue following the Consolidation 3,777,778
Performance Shares offered pursuant to the Offer Nil
Total Performance Shares on issue after completion of the 3,777,778
Offers
Notes:
1. Consisting of 66,666,667 Consideration Performance Shares (on a pre-Consolidation basis)
and 46,666,667 Incentive Performance Shares (on a pre-Consolidation basis).
2. The Directors have referred confirmation of satisfaction of the milestone attached to
Consideration Performance Shares (which is also one of the limbs of the milestones
attached to the Incentive Performance Shares) to an independent auditor and are
awaiting the auditor’s final report.
The capital structure on a fully diluted basis as at the date of this Prospectus
would be 983,869,107 Shares and on completion of the Offer (assuming that the
Consolidation and bonus issue of Shares have completed) would be 114,144,832
Shares.
5.5 Details of substantial holders
Based on publicly available information as at the date of this Prospectus, those
persons which (together with their associates) have a relevant interest in 5% or
more of the Shares on issue are set out below:
Shareholder Shares %
Finsure Holdings Pty Ltd 42,718,332 6.25
There will be no change to the substantial holders on completion of the Offer.
2053091_13 10
6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES
The following is a summary of the more significant rights and liabilities attaching
to Securities being offered pursuant to this Prospectus. This summary is not
exhaustive and does not constitute a definitive statement of the rights and
liabilities of Shareholders. To obtain such a statement, persons should seek
independent legal advice.
Full details of the rights and liabilities attaching to Shares are set out in the
Constitution, a copy of which is available for inspection at the Company’s
registered office during normal business hours.
6.1 Shares
(a) General meetings and notices
Each member is entitled to receive notice of, and to attend and vote
at, general meetings of the Company and to receive all notices,
accounts and other documents required to be sent to members under
the Constitution, the Corporations Act or the Listing Rules.
(b) Voting rights
Subject to any rights or restrictions for the time being attached to any
class or classes of shares, at a general meeting of the Company every
holder of fully paid ordinary shares present in person or by an attorney;
representative or proxy has one vote on a show of hands (unless a
member has appointed 2 proxies) and one vote per share on a poll.
A person who holds a share which is not fully paid is entitled, on a poll,
to a fraction of a vote equal to the proportion which the amount paid
bears to the total issue price of the share.
Where there are 2 or more joint holders of a share and more than one of
them is present at a meeting and tenders a vote in respect of the share,
the Company will count only the vote cast by the member whose name
appears first in the Company's register of members.
(c) Issues of further Shares
The Directors may, on behalf of the Company, issue, grant options over
unissued shares to any person on the terms, with the rights, and at the
times that the Directors decide. However, the Directors must act in
accordance with the restrictions imposed by the Constitution, Listing
Rules, the Corporations Act and any rights for the time being attached
to the shares in any special class of those shares.
(d) Variation of Rights
Unless otherwise provided by the terms of issue of a class of shares and
subject to the Corporations Act, the rights attached to the shares in any
class may be varied or cancelled only with the written consent of the
holders of at least three-quarters of the issued shares of the affected
class, or by special resolution passed at a separate meeting of the
holders of the issued shares of the affected class.
2053091_13 11
(e) Transfer of Shares
Subject to the Constitution, the Corporations Act and Listing Rules,
Shares are freely transferable.
The Shares may be transferred by a proper transfer effected in
accordance with the ASX Settlement Operating Rules, by any other
method of transferring or dealing with Shares introduced by ASX and as
otherwise permitted by the Corporations Act or by a written instrument
of transfer in any usual form or in any other form approved by either the
Directors or ASX that is permitted by the Corporations Act.
The Directors may decline to register a transfer of Shares (other than a
proper transfer in accordance with the ASX Settlement Operating Rules)
where permitted to do so under the Listing Rule. If the Directors decline
to register a transfer, the Company must, within 5 business days after the
transfer is delivered to the Company, give the party lodging the transfer
written notice of the refusal and the reason for the refusal. The Directors
must decline to register a transfer of Shares when required by law, by
the Listing Rules or by the ASX Settlement Operating Rules.
(f) Dividends
The Directors may from time to time determine dividends to be
distributed to members according to their rights and interests. The
Directors may fix the time for distribution and the methods of distribution.
Subject to the terms of issue of shares, the Company may pay a
dividend on one class of shares to the exclusion of another class.
Each share carries the right to participate in the dividend in the same
proportion that the amount for the time being paid on the share (not
credited) bears to the total amounts paid and payable (excluding
amounts credited) in respect of such shares.
(g) Dividend reinvestment and Share plans
Subject to the requirements in the Corporations Act and the Listing
Rules, the Directors may implement and maintain dividend reinvestment
plans (under which any member may elect that dividends payable by
the Company be reinvested by way of subscription for fully paid shares
in the Company).
(h) Winding-up
Subject to the rights of holders of shares with special rights in a winding-
up and the Corporations Act, if the Company is wound up all monies
and property that are to be distributed among Shareholders on a
winding-up, shall be distributed in proportion to the Shares held by them
respectively, irrespective of the amount paid-up or credited as paid-up
on the Shares.
(i) Shareholder liability
As the Shares issued will be fully paid shares, they will not be subject to
any calls for money by the Directors and will therefore not become
liable for forfeiture.
2053091_13 12
(j) Alteration of constitution
In accordance with the Corporations Act, the Constitution can only be
amended by a special resolution passed by at least three quarters of
Shareholders present and voting at the general meeting. In addition, at
least 28 days written notice specifying the intention to propose the
resolution as a special resolution must be given.
6.2 Options
The terms and conditions of the Options the subject of the Options Offer are as
follows:
(a) Entitlement
Each Option entitles the holder to subscribe for one Share upon exercise
of the Option.
(b) Exercise Price
Subject to paragraph (i), the amount payable upon exercise of each
Option will be $0.30 (Exercise Price).
(c) Expiry Date
Each Option will expire at 5:00 pm (WST) on that date which is three (3)
years from the date of issue (Expiry Date). An Option not exercised
before the Expiry Date will automatically lapse on the Expiry Date.
(d) Exercise Period
The Options are exercisable at any time on or prior to the Expiry Date
(Exercise Period).
(e) Notice of Exercise
The Options may be exercised during the Exercise Period by notice in
writing to the Company in the manner specified on the Option
certificate (Notice of Exercise) and payment of the Exercise Price for
each Option being exercised in Australian currency by electronic funds
transfer or other means of payment acceptable to the Company.
(f) Exercise Date
A Notice of Exercise is only effective on and from the later of the date of
receipt of the Notice of Exercise and the date of receipt of the payment
of the Exercise Price for each Option being exercised in cleared funds
(Exercise Date).
(g) Timing of issue of Shares on exercise
Within 15 Business Days after the Exercise Date, the Company will:
(i) issue the number of Shares required under these terms and
conditions in respect of the number of Options specified in the
Notice of Exercise and for which cleared funds have been
received by the Company;
2053091_13 13
(ii) if required, give ASX a notice that complies with section
708A(5)(e) of the Corporations Act, or, if the Company is unable
to issue such a notice, lodge with ASIC a prospectus prepared
in accordance with the Corporations Act and do all such things
necessary to satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not require
disclosure to investors; and
(iii) if admitted to the official list of ASX at the time, apply for official
quotation on ASX of Shares issued pursuant to the exercise of
the Options.
If a notice delivered under (g)(ii) for any reason is not effective to ensure
that an offer for sale of the Shares does not require disclosure to
investors, the Company must, no later than 20 Business Days after
becoming aware of such notice being ineffective, lodge with ASIC a
prospectus prepared in accordance with the Corporations Act and do
all such things necessary to satisfy section 708A(11) of the Corporations
Act to ensure that an offer for sale of the Shares does not require
disclosure to investors.
(h) Shares issued on exercise
Shares issued on exercise of the Options rank equally with the then
issued shares of the Company.
(i) Reconstruction of capital
If at any time the issued capital of the Company is reconstructed, all
rights of an Optionholder are to be changed in a manner consistent
with the Corporations Act and the ASX Listing Rules at the time of the
reconstruction.
(j) Participation in new issues
There are no participation rights or entitlements inherent in the Options
and holders will not be entitled to participate in new issues of capital
offered to Shareholders during the currency of the Options without
exercising the Options.
(k) Change in exercise price
An Option does not confer the right to a change in Exercise Price or a
change in the number of underlying securities over which the Option
can be exercised.
(l) Transferability
The Options are transferable subject to any restriction or escrow
arrangements imposed by ASX or under applicable Australian securities
laws.
2053091_13 14
7. RISK FACTORS
7.1 Introduction
The Shares offered under this Prospectus are considered highly speculative. An
investment in the Company is not risk free and the Directors strongly recommend
potential investors to consider the risk factors described below, together with
information contained elsewhere in this Prospectus and to consult their
professional advisers before deciding whether to apply for Shares pursuant to this
Prospectus.
There are specific risks which relate directly to the Company’s business. In
addition, there are other general risks, many of which are largely beyond the
control of the Company and the Directors. The risks identified in this section, or
other risk factors, may have a material impact on the financial performance of
the Company and the market price of the Shares.
The following is not intended to be an exhaustive list of the risk factors to which
the Company is exposed.
7.2 Company specific
(a) Risks associated with the proposed acquisition of Top Level Real Estate
Pty Ltd
As announced on 19 September 2018, the Company, Ausnet, Top Level
and the Majority Shareholders have executed the Amended and
Restated Option Agreement. Ausnet exercised the option to acquire
the Top Level Shares on 11 February 2018. Settlement remains subject to
satisfaction (or waiver) of the outstanding conditions precedent set out
in Section 8.4(a)(ii).
(b) Contractual risk
Pursuant to the Amended and Restated Option Agreement Ausnet has
agreed to acquire 100% of Top Level Shares subject to the fulfilment of
certain conditions precedent.
The ability of the Company to achieve its stated objectives will depend
on the performance by the parties of their obligations under the
Amended and Restated Option Agreement. If any party defaults in the
performance of their obligations, it may be necessary for the Company
to approach a court to seek a legal remedy, which can be costly.
(c) Integration risk
Following completion of the acquisition of the Top Level Shares, the
Company’s business activities will change. The integration of the Top
Level business may take longer than anticipated. Also, the expected
synergies and savings resulting from the integration of the businesses
may not eventuate or may be less than anticipated.
(d) Geographical risk
The acquisition of the Top Level Shares will result in the Company’s
operations expanding from Western Australia to Victoria and
Queensland. The Company will be subject to risks associated with
2053091_13 15
operating its business across Australia such as: compliance with specific
statutory requirements across the various states.
(e) Reliance on key personnel
The responsibility of overseeing the day-to-day operations and the
strategic management of the Company depends substantially on their
senior management and key personnel. There can be no assurance
given that there will be no detrimental impact on the Company if one or
more of these employees cease their employment or if one or more of
the directors of the Company leaves the Board.
(f) Lenders' willingness to employ third-party distribution channels
The Company’s mortgage business and the mortgage broking industry
generally, is reliant on lenders' willingness to employ third-party
distribution channels as a means of marketing their loan products.
Depending on the relative cost of other distribution methods in the
future, lenders may also decide to decrease their reliance on (or not to
use) third-party channels, develop competing distribution channels or
reduce current upfront or trail commission terms, any of which would
have a significant adverse effect on the industry generally and on the
Company. The Company is also reliant on receiving access to
competitive products from the Finsure Lending Panel (a suite of lending
institutions in Australia) to enable brokers to attract customers in an
increasingly competitive mortgage market. There can be no assurance
that Finsure Lending Panel will continue to be able to access
competitive products.
(g) Supplier risk
The Company sources a number of products and services from
outsourced suppliers. Examples include mortgage aggregator services
through Finsure. Any material changes in trading terms and/or supply
from outsourced suppliers may impact the Company's ability to provide
the current suite of products and services to its customers at the current
pricing and gross margin on mortgage lines.
(h) Technology risk
The Company's real estate business "The Agency" is built around
technology that gives the Company's sales representatives the ability to
work from any location with a few large regional offices for support. Any
interruption to the daily service, operation and maintenance of this
technology plus failure or delay continuing to develop new functionality
to the technology may have a material impact on the Company's
current and future revenues. The Company also relies on a number of
management information systems to enable the efficient running of the
business. Whilst standard back-up, storage and recovery procedures are
implemented, including offsite storage of back-up data, any event that
causes harm or destroys the original and back-up data may have a
material impact on the Company's ability to maintain continuous
operations for the period of time required to remedy the cause of
business interruption.
2053091_13 16
(i) Security risk
The Company relies upon the security of its management information
systems, payment systems, website and client database. Any breaches
of security including cyberattacks to the website or database that may
cause damage, loss of operation or access to customer records by
unauthorised parties could cause material impact or interruption to the
Company's continuous operation and therefore financial results.
Damage, loss or misuse of client records may cause a loss of confidence
in the Company by its clients as well as reputational damage.
(j) Customer service
Ausnet relies upon both the continuous operation of its website as well
as the ability to provide an acceptable level of customer assistance
and service via its own staff and/or outsource providers. Any event that
causes customer service to fall to inadequate or unacceptable levels
may cause reputational damage and consequently a reduction in the
Company's ability to retain existing customers and attract new
customers. Any loss of existing or new customers will impact the
Company's revenues.
(k) Infringement of Intellectual Property Rights
Should the Company be accused of infringing a third-party's intellectual
property rights or trademarks and commence legal proceedings
against the Company, the Company may incur significant costs in
defending such proceedings, regardless of the outcome. Defending
legal proceedings can often be defocusing for management and
possibly other staff, which may divert their attention from the optimal
management of the Company and results. Should a third-party obtain
injunctive or other relief, it may prevent the Company from further use of
the related intellectual property or trademark. Should such litigation be
successful, the Company may also be caused to pay damages to the
third-party and incur additional cost in the future to use or replace the
functionality of the related intellectual property or trademark.
(l) IT systems
The Company’s ability to manage service and pay its client database is
dependent on its information technology systems (including its customer
relationship management software) and relationships with service
providers. Interruptions, failure or delay in the provision of services could
severely impact the business operations of the Company as damaging
the Company’s reputation. Any issues with Ausnet's information
technology systems may also impact on the Company's operational
capabilities and financial performance.
(m) Dependency on Licences for financial services businesses
The Company’s mortgage broking and financial services businesses are
dependent on relevant government licences and can be revoked if
certain conditions are breached. If theses licences were revoked, this
would have an adverse effect on revenue for these business units.
2053091_13 17
(n) Reliance on external software providers
The Company’s mortgage business is reliant on software provided by
Finsure to facilitate their business including its customer relationship
management software). There is a risk that a transfer to a new
aggregator, and with it new software systems, could cause some
disruption to the business.
7.3 Industry specific
(a) Competition risks
The Company operates in a highly competitive market. Therefore, it
faces the risk that increasing levels of competition, including
competition from business models using new technology platforms,
could result in, among other things, the Company foregoing a greater
proportion of its profit margin to retain volumes of mortgages written,
reduced upfront commissions and trail commissions and changes to the
structure of upfront commissions and trail commissions by lenders (such
as the replacement of trail commissions with up-front commissions). This
may result in reduced revenue, reduced operating margins and a loss
of market share, which may have a material adverse effect on the
Company's business, operating and financial performance and position
and future prospects.
(b) Importance of licences for the Company’s core business activities
The Company currently holds an ACL licence to engage in mortgage
broking activities, in order to conduct its business. This licence enables
the Company to engage and facilitate mortgage activities.
Compliance with the obligations of the licences is the responsibility of
the licensee. If the Company does not comply with the conditions of
their licences or meet regulatory requirements, it could be subject to
penalties, more onerous licence conditions and the imposition of
licence restrictions for the loss of that licence. If the Company is unable
to retain its licence or has restrictions imposed on this licence, it may not
be able to continue to operate its business, or aspects of its business, in
its current form. This would have a material adverse impact on the
financial performance and position of the business.
(c) Regulatory risks
In Australia, the mortgage broking industry is primarily regulated by ASIC
and the National Consumer Credit Protection Act 2009 (Cth) (NCCP
Act). The industry is also subject to a variety of other laws including
privacy, financial transaction reporting and money laundering. If the
Company does not meet regulatory requirements, such as various
responsible lending obligations under the NCCP Act, it may suffer
penalties or the ability to maintain its current ACL. Therefore, the
Company’s operating activities may be affected, which is likely to have
a material impact on the Company's business and financial
performance. These penalties may include (but are not limited to): fines,
compensation, and cancellation or suspension of authority to carry on
business. In addition, the regulatory framework governing the mortgage
broking industry is subject to change. This could have an impact on the
mortgage broking industry or on the Company's operations. Depending
on the nature of any such changes, they may adversely impact the
2053091_13 18
operations or future financial performance of the Company. The
repercussions of the Banking Royal commission are still unknown from a
regulatory perspective as well as the effect it may have on the
availability of credit. A tightening of the availability of credit may cause
an adverse effect on the real estate market.
(d) Conduct of mortgage brokers and credit representatives
The Company’s mortgage business faces a number of risks arising from
the conduct of mortgage brokers. It is noted that under the NCCP Act,
the Company is liable to customers for any loss or damage they suffer as
a result of a mortgage broker's conduct. This applies to conduct that
relates to credit activity on which the customer could reasonably be
expected to rely and in fact relied in good faith. Where the Company is
responsible for the conduct of its credit representative, the customer has
the same remedies against the Company as it has against the credit
representative. This means that customers can take action against the
Company in respect of a mortgage broker's conduct.
7.4 General risks
(a) Interest Rates
Australian consumers and residential borrowers currently enjoy
historically low interest rates which have contributed to the growth of
the Company’s loan book. In the event interest rates significantly
increase, potential borrowers' willingness and ability to borrow may be
greatly reduced and the volume of loans settled could significantly
decrease, affecting the Company’s loan book and the associated
financial performance of the Company.
(b) Funding Risks
If the Company incurs unexpected costs or is unable to generate
sufficient operating income, further funding may be required. The
Company may require additional funding to carry out the full scope of
its plans.
The Company's ability to effectively implement its business and
operations plans in the future, to take advantage of opportunities for
acquisitions, joint ventures or other business opportunities and to meet
any unanticipated liabilities or expenses which the Company may incur
may depend in part on its ability to raise additional funds. The Company
may seek to raise further funds through equity or debt financing or other
means. Failure to obtain sufficient financing for the Company's activities
may result in delay and indefinite postponement of the development of
key software products or sales and marketing activities. There can be no
assurance that additional finance will be available when needed or, if
available, the terms of the financing might not be favourable to the
Company and might involve substantial dilution to Shareholders.
Loan agreements and other financing rearrangements such as debt
facilities, convertible note issue and finance leases (and any related
guarantee and security) that may be entered into by the Company
may contain covenants, undertakings and other provisions which, if
breached, may entitle lenders to accelerate repayment of loans and
there is no assurance that the Company would be able to repay such
loans in the event of an acceleration. Enforcement of any security
2053091_13 19
granted by the Company or default under a finance lease could also
result in the loss of assets.
The Company is exposed to risks associated with its financial instruments
(consisting of cash, receivables, accounts payable and accrued
liabilities due to third parties from time to time). This includes the risk that
a third-party to a financial instrument fails to meet its contractual
obligations; the risk that the Company will not be able to meet its
financial obligations as they fall due; and the risk that market prices may
vary which will affect the Company's income.
(c) Economic
General economic conditions, introduction of tax reform, new
legislation, movements in interest and inflation rates and currency
exchange rates may have an adverse effect on the Company’s
business activities and potential research and development
programmes, as well as on their ability to fund those activities. The real
estate markets in Western Australia, New South Wales, Victoria and
Queensland have been declining and the rate of decline is unknown
with both number of transactions reducing and values of properties. The
Agency operates in all these markets.
(d) Insurance risks
The Company intends to insure its operations in accordance with
industry practice. However, in certain circumstances, such insurance
may not be of a nature or level to provide adequate insurance cover.
The occurrence of an event that is not covered or fully covered by
insurance could have a material adverse effect on the business,
financial condition and results of the Company effected.
(e) Litigation risks
The Company is exposed to possible litigation risks. Further, the
Company may be involved in disputes with other parties in the future
which may result in litigation. Any such claim or dispute if proven, may
impact adversely on the Company’s operations, financial performance
and financial position. The Company is not currently engaged in any
litigation.
(f) Market conditions
Share market conditions may affect the value of the Company’s
quoted securities regardless of the Company’s operating performance.
Share market conditions are affected by many factors such as:
(i) general economic outlook;
(ii) introduction of tax reform or other new legislation;
(iii) interest rates and inflation rates;
(iv) changes in investor sentiment toward particular market sectors;
(v) the demand for, and supply of, capital; and
(vi) terrorism or other hostilities.
2053091_13 20
The market price of securities can fall as well as rise and may be subject
to varied and unpredictable influences on the market for equities in
general and technology related stocks in particular. Neither the
Company nor the Directors warrant the future performance of the
Company or any return on an investment in the Company.
7.5 Speculative investment
The above list of risk factors ought not to be taken as exhaustive of the risks
faced by the Company or by investors in the Company. The above factors, and
others not specifically referred to above, may in the future materially affect the
financial performance of the Company and the value of the Shares offered
under this Prospectus.
Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee
with respect to the payment of dividends, returns of capital or the market value
of those Shares.
Potential investors should consider that the investment in the Company is highly
speculative and should consult their professional advisers before deciding
whether to apply for Shares pursuant to this Prospectus.
2053091_13 21
8. ADDITIONAL INFORMATION
8.1 Litigation
As at the date of this Prospectus, the Company is not involved in any legal
proceedings and the Directors are not aware of any legal proceedings pending
or threatened against the Company.
8.2 Continuous disclosure obligations
The Company is a “disclosing entity” (as defined in section 111AC of the
Corporations Act) for the purposes of section 713 of the Corporations Act and,
as such, is subject to regular reporting and disclosure obligations. Specifically,
like all listed companies, the Company is required to continuously disclose any
information it has to the market which a reasonable person would expect to
have a material effect on the price or the value of the Company’s securities.
This Prospectus is a “transaction specific prospectus”. In general terms a
“transaction specific prospectus” is only required to contain information in
relation to the effect of the issue of securities on a company and the rights
attaching to the securities. It is not necessary to include general information in
relation to all of the assets and liabilities, financial position, profits and losses or
prospects of the issuing company.
This Prospectus is intended to be read in conjunction with the publicly available
information in relation to the Company which has been notified to ASX and does
not include all of the information that would be included in a prospectus for an
initial public offering of securities in an entity that is not already listed on a stock
exchange. Investors should therefore have regard to the other publicly
available information in relation to the Company before making a decision
whether or not to invest.
Having taken such precautions and having made such enquires as are
reasonable, the Company believes that it has complied with the general and
specific requirements of ASX as applicable from time to time throughout the 3
months before the issue of this Prospectus which required the Company to notify
ASX of information about specified events or matters as they arise for the
purpose of ASX making that information available to the stock market
conducted by ASX.
Information that is already in the public domain has not been reported in this
Prospectus other than that which is considered necessary to make this
Prospectus complete.
The Company, as a disclosing entity under the Corporations Act states that:
(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company
(not being documents referred to in section 1274(2)(a) of the
Corporations Act) may be obtained from, or inspected at, the offices of
the ASIC; and
(c) it will provide a copy of each of the following documents, free of
charge, to any person on request between the date of issue of this
Prospectus and the Closing Date:
2053091_13 22
(i) the annual financial report most recently lodged by the
Company with the ASIC;
(ii) any half-year financial report lodged by the Company with the
ASIC after the lodgement of the annual financial report referred
to in (i) and before the lodgement of this Prospectus with the
ASIC; and
(iii) any continuous disclosure documents given by the Company to
ASX in accordance with the ASX Listing Rules as referred to in
section 674(1) of the Corporations Act after the lodgement of
the annual financial report referred to in (i) and before the
lodgement of this Prospectus with the ASIC.
Copies of all documents lodged with the ASIC in relation to the Company can
be inspected at the registered office of the Company during normal office
hours.
Details of documents lodged by the Company with ASX since the date of
lodgement of the Company’s latest annual financial report and before the
lodgement of this Prospectus with the ASIC are set out in the table below.
Date Description of Announcement
15/11/2018 Vicus acquisition approved and Bonus Share issue update
15/11/2018 Results of Meeting
14/11/2018 Addendum to Notice of General Meeting / Proxy Form
14/11/2018 Top Level Acquisition Update
14/11/2018 Update – Consolidation/Split – AU1
31/10/2018 Appendix 4C – Quarterly and commentary
26/10/2018 Notice of Annual General Meeting/Proxy Form
22/10/2018 Consolidation/Split – AU1
17/10/2018 Notice of General Meeting/Proxy Form
17/10/2018 Letter to Optionholders – Bonus Issue
17/10/2018 Bonus Issue and Appendix 3B
01/10/2018 Appendix 4G
ASX maintains files containing publicly available information for all listed
companies. The Company’s file is available for inspection at ASX during normal
office hours.
The announcements are also available through the Company’s website
www.theagencygroup.com.au.
8.3 Market price of shares
The Company is a disclosing entity for the purposes of the Corporations Act and
its Shares are enhanced disclosure securities quoted on ASX.
The highest, lowest and last market sale prices of the Shares on ASX during the
three months immediately preceding the date of lodgement of this Prospectus
with the ASIC and the respective dates of those sales were:
2053091_13 23
Highest $0.017 3 September 2018 and 4 September 2018
Lowest $0.009 29 October 2018
Last $0.01 19 November 2018
8.4 Material contracts
The following are summaries of the significant terms of the material agreements
which relate to the business of the Company.
(a) Amended and Restated Option Agreement
The key terms of the Amended and Restated Option Agreement are as
follows:
(i) (Option) The Majority Shareholders each agreed to irrevocably
grant to Ausnet the exclusive Option to purchase all of the Top
Level Shares they respectively each hold on certain terms and
conditions. The option was exercised by Ausnet on 11 February
2018.
(ii) (Conditions Precedent) The outstanding conditions precedent
which must be satisfied prior to the Company completing the
acquisition of the Top Level Shares are:
(A) (Shareholder Approvals): Shareholders approving the
transactions contemplated by the Amended and
Restated Option Agreement at the General Meeting,
including resolutions authorising:
(I) the issue of the Consideration Shares in
accordance with the ASX Listing Rules and the
Corporations Act;
(II) the acquisition of the Top Level Shares pursuant
to ASX Listing Rule 11.1.2;
(III) the issue of the Shares in repayment of certain
Top Level loans;
(IV) consolidation of the Company’s issued capital
on the basis that every thirty (30) Shares is
consolidated into one (1) Share;
(V) the issue of 833,333 post-Consolidation Shares
to Paul Niardone;
(VI) the issue of 333,333 post-Consolidation Options;
and
(VII) the issue of 28,000,000 post-Consolidation
Shares the subject of the Capital Raising.
(B) (Regulatory Approvals): Ausnet and the Company
obtaining all necessary regulatory approvals or waivers
pursuant to the ASX Listing Rules, Corporations Act or
any other law to allow Ausnet lawfully to complete the
2053091_13 24
matters set out in the Amended and Restated Option
Agreement;
(C) (Minority Shareholder Offer): All Minority Shareholders
accepting the Minority Shareholder Offer;
(D) (Capital Raising): The Company completing the
Capital Raising;
(E) (New Board members):
(I) Matt Lahood entering into an executive
services agreement in agreed form with the
Company and consenting to act as an
executive director of Company; and
(II) the appointment by the Board of the
Company of an additional, non-executive
director nominated by Top Level prior to
Settlement;
(F) (Top Level debt): immediately prior to Settlement, the
total debts of Top Level are no more than $26,993,812,
and, for the avoidance of doubt, the debts of Top
Level immediately following Settlement will therefore be
$18,760,100; and
(G) (Transfer of Daring Investments’ Top Level Shares): the
following is delivered or caused to be delivered to MAK
and Ben Collier Investments:
(I) share certificates in respect of the Top Level
Shares held by Daring Investments;
(II) instruments of transfer in registrable form for the
Top Level Shares held by Daring Investments in
favour of MAK and Ben Collier Investments as
transferees in accordance with the transfers
anticipated in the Amended and Restated
Option Agreement which have been duly
executed by Daring Investments (as transferor),
(together, the Conditions).
(iii) (Consideration) Subject to the satisfaction (or waiver) of the
Conditions, in consideration for the Acquisition, the Company
will issue 18,333,333 post-Consolidation Shares amongst the Top
Level Shareholders; and
(iv) (Settlement) Following the exercise of the Option, settlement of
the Acquisition will occur on that date which is 5 business days
after the satisfaction (or waiver by Ausnet or the Majority
Shareholders, as permitted by the Amended and Restated
Option Agreement) of the Conditions.
2053091_13 25
(b) Lead Manager Agreement with Aura Capital
The Company has entered into a lead manager agreement with Aura
Capital Pty Ltd (Aura Capital) pursuant to which Aura Capital has
agreed, subject to certain terms and conditions, to act as lead
manager of the Capital Raising. In consideration for Aura Capital acting
as lead manager to the Capital Raising the Company will issue Aura
Capital (or its nominee) with 840,000 Shares at a deemed issue price of
$0.30 per Share on completion of the Capital Raising.
(c) Loan Agreements
Amended and restated loan agreements have been entered into
between each of Teldar Real Estate, MAK, SEMC2, Ben Collier
Investments and Daring Investments and Top Level and letters to amend
the amended and restated loan agreements have been be entered
into agreements between each of the Top Level Loan Holders, Top
Level and the Company (Amendment Letters). Pursuant to the
Amendment Letters, the Company will issue 16,666,667 Shares to the Top
Level Loan Holders at Settlement.
8.5 Interests of Directors
Other than as set out in this Prospectus, no Director or proposed Director holds,
or has held within the 2 years preceding lodgement of this Prospectus with the
ASIC, any interest in:
(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in
connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,
and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to a Director or proposed Director:
(d) as an inducement to become, or to qualify as, a Director; or
(e) for services provided in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.
Security holdings
The relevant interest of each of the Directors in the securities of the Company as
at the date of this Prospectus, together with their respective Entitlement, is set
out in the table below.
All figures in the table below are presented on a pre-Consolidation basis.
2053091_13 26
Director Shares Options Performance
Shares
Philip Re 4,069,9731 Nil 11,648,3242
John Kolenda 42,718,3323 Nil 22,239,4454
Adam Davey 917,1445 142,8586 8,000,0007
Paul Niardone 10,463,2928 Nil 15,820,4329
Notes
1. Consisting of 3,944,973 held indirectly through Mr Philip Re <Re Super Fund> and 125,000
held directly by Mr Re.
2. Held indirectly through Mr Re’s <Re Super Fund>.
3. Held indirectly through Finsure Holdings Pty Ltd.
4. Comprising 8,000,000 held directly by Mr Kolenda and 14,239,445 held indirectly through
Finsure Holdings Pty Ltd.
5. Comprising 609,643 Shares held indirectly by Court Securities Pty Ltd, 2500 Shares held by
A Davey <Tony Lelbowitz & Noah Davey>, 302,000 Shares held by A Davey & M Davey
<The Davey Super Fund A/C>, 2,001 Shares held by A Davey <Shenton Park Investments
A/C> and 1,000 Shares held by Mr Davey’s spouse.
6. Held indirectly through Court Securities Pty Ltd and exercisable at 30 April 2019.
7. Held directly by Mr Davey.
8. Comprising 1,000 held directly by Mr Niardone, 10,461,292 held indirectly through Trindis
Pty Ltd and 1,000 held indirectly through Mr Niardone’s spouse.
9. Comprising 12,333,334 Performance Shares held directly by Mr Niardone and 3,487,098
Performance Shares held indirectly through Trindis Pty Ltd.
As set out in the Company’s Notice of General Meeting dated 17 October 2018,
John Kolenda’s associated entity, Daring Investments Pty Ltd, is a Top Level
Shareholder and will, subject to satisfaction of all conditions precedent to the
Acquisition, receipt of the requisite shareholder approvals and Settlement
occurring, receive 1,827,599 Shares as part of the Acquisition. Daring Investments
Pty Ltd will therefore participate in the Offer.
Adam Davey, or his nominee, will participate in the Options Offer, and be issued
with 333,333 Options (on the terms and conditions set out in Section 6.2) subject
to receipt of Shareholder approval at the General Meeting.
No other Directors or any of their associates intend to participate in the Offer,
Options Offer or the Cleansing Offer.
Remuneration
The remuneration of an executive Director is decided by the Board, without the
affected executive Director participating in that decision-making process. The
total maximum remuneration of non-executive Directors is initially set by the
Constitution and subsequent variation is by ordinary resolution of Shareholders in
general meeting in accordance with the Constitution, the Corporations Act and
the ASX Listing Rules, as applicable. The determination of non-executive
Directors’ remuneration within that maximum will be made by the Board having
regard to the inputs and value to the Company of the respective contributions
by each non-executive Director.
2053091_13 27
A Director may be paid fees or other amounts (i.e. non-cash performance
incentives such as Options, subject to any necessary Shareholder approval) as
the other Directors determine where a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a
Director. In addition, Directors are also entitled to be paid reasonable travelling,
hotel and other expenses incurred by them respectively in or about the
performance of their duties as Directors.
The following table shows the annual remuneration paid to both executive and
non-executive Directors inclusive of superannuation for the past financial year
and the proposed remuneration for financial year 2018.
Director Financial year Financial year ending
ending 30 June 30 June 2018
2017
Philip Re1 $51,000 $60,000
John Kolenda2 $24,000 $48,000
Adam Davey3 $24,000 $48,000
Paul Niardone4 $340,802 $347,576
8.6 Interests of experts and advisers
Other than as set out below or elsewhere in this Prospectus, no:
(a) person named in this Prospectus as performing a function in a
professional, advisory or other capacity in connection with the
preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial services
licensee named in this Prospectus as a financial services licensee
involved in the issue,
holds, or has held within the 2 years preceding lodgement of this Prospectus with
the ASIC, any interest in:
(d) the formation or promotion of the Company;
(e) any property acquired or proposed to be acquired by the Company in
connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(f) the Offer,
and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to any of these persons for services provided
in connection with:
(g) the formation or promotion of the Company; or
(h) the Offer.
2053091_13 28
Steinepreis Paganin has acted as the solicitors to the Company in relation to the
Offer. The Company estimates it will pay Steinepreis Paganin $15,000 (excluding
GST and disbursements) for these services. During the 24 months preceding
lodgement of this Prospectus with the ASIC, Steinepreis Paganin has been paid
fees totalling $280,738 (excluding GST and disbursements) for legal services
provided to the Company.
8.7 Consents
Chapter 6D of the Corporations Act imposes a liability regime on the Company
(as the offeror of the Securities), the Directors, the persons named in the
Prospectus with their consent as Proposed Directors, any underwriters, persons
named in the Prospectus with their consent having made a statement in the
Prospectus and persons involved in a contravention in relation to the Prospectus,
with regard to misleading and deceptive statements made in the Prospectus,
Although the Company bears primary responsibility for the Prospectus, the other
parties involved in the preparation of the Prospectus can also be responsible for
certain statements made in it.
Each of the parties referred to in this Section:
(a) does not make, or purport to make, any statement in this Prospectus
other than those referred to in this Section;
(b) in light of the above, only to the maximum extent permitted by law,
expressly disclaim and take no responsibility for any part of this
Prospectus other than a reference to its name and a statement
included in this Prospectus with the consent of that party as specified in
this Section.
Steinepreis Paganin has given its written consent to being named as the solicitors
to the Company in this Prospectus. Steinepreis Paganin has not withdrawn its
consent prior to the lodgement of this Prospectus with the ASIC.
8.8 Expenses of the Offer
The total expenses of the Offer are estimated to be approximately $22,577
(excluding GST) and are expected to be applied towards the items set out in the
table below:
$
ASIC fees 3,206
ASX fees 4,371
Legal fees 15,000
Total 22,577
8.9 Electronic Prospectus
If you have received this Prospectus as an electronic Prospectus, please ensure
that you have received the entire Prospectus accompanied by the Application
Form. If you have not, please phone the Company on +61 8 6141 3500 and the
Company will send you, for free, either a hard copy or a further electronic copy
of the Prospectus, or both. Alternatively, you may obtain a copy of this
Prospectus from the Company’s website at www.theagencygroup.com.
2053091_13 29
The Company reserves the right not to accept an Application Form from a
person if it has reason to believe that when that person was given access to the
electronic Application Form, it was not provided together with the electronic
Prospectus and any relevant supplementary or replacement prospectus or any
of those documents were incomplete or altered.
8.10 Financial forecasts
The Directors have considered the matters set out in ASIC Regulatory Guide 170
and believe that they do not have a reasonable basis to forecast future earnings
on the basis that the operations of the Company are inherently uncertain.
Accordingly, any forecast or projection information would contain such a broad
range of potential outcomes and possibilities that it is not possible to prepare a
reliable best estimate forecast or projection.
8.11 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship
The Company will not be issuing share certificates. The Company is a participant
in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker.
Investors who do not wish to participate through CHESS will be issuer sponsored
by the Company. Because the sub-registers are electronic, ownership of
securities can be transferred without having to rely upon paper documentation.
Electronic registers mean that the Company will not be issuing certificates to
investors. Instead, investors will be provided with a statement (similar to a bank
account statement) that sets out the number of Shares issued to them under this
Prospectus. The notice will also advise holders of their Holder Identification
Number or Security Holder Reference Number and explain, for future reference,
the sale and purchase procedures under CHESS and issuer sponsorship.
Further monthly statements will be provided to holders if there have been any
changes in their security holding in the Company during the preceding month.
8.12 Privacy Act
If you complete an application for Shares, you will be providing personal
information to the Company (directly or by the Company’s share registry). The
Company collects, holds and will use that information to assess your application,
service your needs as a holder of equity securities in the Company, facilitate
distribution payments and corporate communications to you as a Shareholder
and carry out administration.
The information may also be used from time to time and disclosed to persons
inspecting the register, bidders for your securities in the context of takeovers,
regulatory bodies, including the Australian Taxation Office, authorised securities
brokers, print service providers, mail houses and the Company’s share registry.
You can access, correct and update the personal information that we hold
about you. Please contact the Company or its share registry if you wish to do so
at the relevant contact numbers set out in this Prospectus.
Collection, maintenance and disclosure of certain personal information is
governed by legislation including the Privacy Act 1988 (Cth) (as amended), the
Corporations Act and certain rules such as the ASX Settlement Operating Rules.
You should note that if you do not provide the information required on the
application for Shares, the Company may not be able to accept or process your
application.
2053091_13 30
9. DIRECTORS’ AUTHORISATION
This Prospectus is issued by the Company and its issue has been authorised by a
resolution of the Directors.
In accordance with section 720 of the Corporations Act, each Director has
consented to the lodgement of this Prospectus with the ASIC.
______________________________
PHILIP RE
CHAIRMAN
For and on behalf of
THE AGENCY GROUP AUSTRALIA LTD
2053091_13 31
10. GLOSSARY
$ means the lawful currency of the Commonwealth of Australia.
Acquisition means the acquisition of the Top Level Shares in accordance with
the terms and conditions of the Amended and Restated Option Agreement.
Amended and Restated Option Agreement means the amended and restated
option agreement between the Company, Ausnet, Top Level and the Majority
Shareholders dated 14 September 2018 (as amended).
Applicant means a Top Level Shareholder who applies for Shares pursuant to the
Offer.
Application Form means the application form either attached to or
accompanying this Prospectus.
ASIC means the Australian Securities and Investments Commission.
Ausnet means Ausnet Real Estate Services Pty Ltd (ACN 093 805 675).
Aura means Aura Principal Investments Pty Ltd (ACN 145 010 653).
ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it
as the context requires.
ASX Listing Rules means the listing rules of the ASX.
ASX Settlement Operating Rules means the settlement rules of the securities
clearing house which operates CHESS.
Ben Collier Investments means Ben Collier Investments Pty Ltd (ACN 149 089 154).
Board means the board of Directors unless the context indicates otherwise.
Business Day means Monday to Friday inclusive, except New Year’s Day, Good
Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX
declares is not a business day.
Capital Raising means the offer of 28,000,000 Shares at an issue price of $0.30
per Share for the Company to raise $8,400,000.
Cleansing Offer has the meaning given in Section 4.3.
Closing Date means the date specified in the timetable set out at the
commencement of this Prospectus (unless extended).
Company means The Agency Group Australia Ltd (ACN 118 913 232).
Consideration Shares means 18,333,333 post-Consolidation Shares.
Consideration Performance Share means a performance share issued on the
terms and conditions for Consideration Performance Shares as approved by
Shareholders at the Company’s general meeting held on 20 July 2016.
Consolidation means the consolidation of the Company’s issued capital on a
one (1) for thirty (30) basis.
2053091_13 32
Constitution means the constitution of the Company as at the date of this
Prospectus.
Corporations Act means the Corporations Act 2001 (Cth).
Daring Investments means Daring Investments Pty Ltd (ACN 059 818 807).
Directors means the directors of the Company as at the date of this Prospectus.
General Meeting means the general meeting of Shareholders to be held on 28
November 2018.
Incentive Performance Share means a performance share issued on the terms
and conditions for Incentive Performance Shares as approved by Shareholders
at the Company’s general meeting held on 20 July 2016.
Majority Shareholders means Aura, Daring Investments, Teldar Real Estate, MAK
Property Group, SEMC2 and Ben Collier Investments.
Minority Shareholder Offer means an offer to be made to the Minority
Shareholders by Ausnet under a short form agreement. such as a share transfer
form, for the acquisition by Ausnet of the Minority Shareholders’ Top Level Shares.
Minority Shareholders means all shareholders of Top Level other than the Majority
Shareholders.
Offer means the offer of Shares to the Top Level Shareholders pursuant to this
Prospectus.
Offers means the Offer, Cleansing Offer and Options Offer.
Official Quotation means official quotation on ASX.
Option means an option to acquire a Share.
Optionholder means a holder of an Option.
Performance Share means a Consideration Performance Share or an Incentive
Performance Share.
Prospectus means this prospectus.
Section means a section of this Prospectus.
Security means an Option or a Share, as the context requires.
SEMC2 means SEMC2 Pty Ltd (ACN 126 492 733) ATF The Chen Asset Trust.
Settlement means settlement of the Acquisition in accordance with the terms
and conditions of the Amended and Restated Option Agreement.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a holder of a Share.
Teldar Real Estate means Teldar Real Estate Pty Ltd (ACN 061 660 375) ATF MJ
Lahood Family Trust.
Top Level means Top Level Real Estate Pty Ltd (ACN 615 413 879).
2053091_13 33
Top Level Loan Holders means Teldar Real Estate, MAK, SEMC2, Ben Collier
Investments and Daring Investments.
Top Level Share means a share in Top Level.
Top Level Shareholders means the Majority Shareholders and the Minority
Shareholders.
WST means Western Standard Time as observed in Perth, Western Australia.
2053091_13 34