14 DECEMBER
NEW ZEALAND GAZETTE
4779

The original issuer, the amalgamated company and the holder all use a 31 March balance date and apply Determination GIA on a 365 day basis when apportioning daily income and expenditure.

The Coupon Interest Payments are made as follows:

27 December 1994 $4.50
27 June 1995 $4.50
27 December 1995 $4.50
27 June 1996 $4.50
27 December 1996 $4.50
27 June 1997 $4.50
27 December 1997 $4.50
27 June 1998 $4.50
27 December 1998 $4.50
27 June 1999 $4.50
$45.00

(a) Year Ended 31 March 1995
Coupon Payment due on 27/12/94 $4.50
Apportionment of Coupon Payment due on 27/6/95.
There are a total of 182 days in the period between payments. Of these, 94 are in the year ended 31 March 1995.
94/182 × $4.50 $2.32
Income/Expenditure $6.82

(b) Year Ended 31 March 1996
The Trust Deed, as varied for the amalgamation, provides for the coupon payment relating to the period in which the issuer amalgamates to be split between the holder prior to the amalgamation and the holder after the amalgamation.

(i) Income for the Original Holder
Since this is the final year of the arrangement from the point of view of the original Holder, the base price adjustment is applied to the transfer of the Notes on the amalgamation date, 30 September 1995, using the following values:
a = all consideration paid ($4.50 + $4.50 + $2.34* = $11.34)

• see below
  b = acquisition price
  c = income/expenditure returned in previous years ($6.82)
  Income = a – (b + c)
  = $11.34 – (0 + $6.82)
  = $4.52

As all amounts other than the coupon payments are attributable to the underlying shares, the issue price and value attributable to the underlying shares on amalgamation can be ignored for the purposes of calculating accrual income and expenditure. This effectively gives the Notes an acquisition price of nil (for calculation purposes). Therefore, in this example “b” has the value of zero.

The coupon payment due on 27/6/95 is paid to the Holder prior to the amalgamation.
(88/182 × $4.50 = $2.18) $2.18

• Of the coupon payment due on 27/12/95 the holder prior to the amalgamation is paid the portion that relates to the period prior to the amalgamation. (95/183 × $4.50 = $ 2.34) $2.34
  Income for the original Holder $4.52

(ii) Income for the New Holder
The portion of the coupon payable on 27/12/95 that relates to the period after the amalgamation is paid to the new Holder. (88/183 × $4.50 = $2.16) $2.16

The coupon payment due on 27/6/96 is paid to the new Holder. (94/182 × $4.50 = $2.32) $2.32
Income for the new Holder $4.48
Total income (both holders) in year ending 31 March 1996 $9.00

(iii) Expenditure for the Original Issuer
As amalgamation occurs in this year income and expenditure will need to be apportioned between the original issuer and the amalgamated issuer, in a manner consistent with the provisions of section FE 7 (b). That section deems the consideration for the succession to be such an amount which results in a fair and reasonable allocation of expenditure or income.

Allocation
Apportionment of the coupon payment due 27/6/95. There are a total of 182 days in the period between payments. Of these, 88 are in the year ended 31 March 1996.
88/182 × $4.50 $2.18
Apportionment of the coupon payment due 27/12/95. There are a total of 183 days in the period between payments. Of these, 95 days are in the period to 30 September 1995 (being the date of amalgamation). 95/183 × $4.50 $2.34
Fair and Reasonable Allocation $4.52

The formula a – (b + c) is applied so as to result in such allocation:
a = the sum of all amounts paid ($11.34)
b = acquisition price
c = income/expenditure in previous years ($6.82)

As all amounts other than the coupon payments are attributable to the underlying shares, the issue price and value attributable to the underlying shares on amalgamation can be ignored for the purposes of calculating income and expenditure. This effectively gives the Notes an acquisition price of nil (for calculation purposes). Therefore, in this example “b” has a value of zero. Similarly the sum of all amounts paid is $11.34 as it excludes amounts attributable to the underlying shares.

Expenditure = a – (b + c)
= $11.34 – (0 + $6.82)
= $4.52

(iv) Expenditure for the Amalgamated Issuer
Coupon Payment due on 27/12/95. $4.50
From this, the issuer subtracts the acquisition price (after excluding amounts attributable to the underlying shares) calculated above pursuant to section FE 7 (b). That section provides that the consideration for the succession is deemed to be an amount that will result in a fair and reasonable allocation of the expenditure between the amalgamating and amalgamated companies. The original issuer is treated as having paid the new issuer an amount ($2.34) equal to the outstanding accrued interest prior to the amalgamation date, ($2.34) for taking over its obligations under the Notes.

Apportionment of the coupon payment due 27/6/96. There are a total of 182 days in the period between payments. Of these, 94 are in the year ended 31 March 1996.
94/182 × $4.50 $2.32
Expenditure $4.48