NEW ZEALAND GAZETTE

No. 147

(c) Year Ended 31 March 1997

Apportionment of coupon payment due on 27/6/96.
There are a total of 182 days in the period between payments. Of these, 88 are in the year ended 31 March 1997.

88/182 × $4.50

Coupon payment due on 27/12/96.

$2.18

Apportionment of coupon payment due on 27/6/97.
There are a total of 182 days in the period between payments. Of these, 94 are in the year ended 31 March 1997.

94/182 × $4.50

Income/Expenditure

$2.32

$9.00

(d) Year Ended 31 March 1998

Apportionment of coupon payment due on 27/6/97.
There are a total of 182 days in the period between payments. Of these, 88 are in the year ended 31 March 1998.

88/182 × $4.50

Coupon payment due on 27/12/97.

$2.18

Apportionment of coupon payment due on 27/6/98.
There are a total of 182 days in the period between payments. Of these, 94 are in the year ended 31 March 1998.

94/182 × $4.50

Income/Expenditure

$2.32

$9.00

(e) Year Ended 31 March 1999

Apportionment of coupon payment due on 27/6/98.
There are a total of 182 days in the period between payments. Of these, 88 are in the year ended 31 March 1999.

88/182 × $4.50

Coupon payment due on 27/12/98.

$2.18

Apportionment of coupon payment due on 27/6/99.
There are a total of 182 days in the period between payments. Of these, 94 are in the year ended 31 March 1999.

94/182 × $4.50

Income/Expenditure

$2.32

$9.00

(f) Year Ended 31 March 2000

As the Note matures in this year the base price adjustment (section EH 4 of the Act) is required in respect of both the holder and amalgamated issuer. The formula a – (b + c) is applied:

(i) Expenditure for the Amalgamated Issuer

a = sum of all amounts paid (8 × $4.50 × $36.00)
b = acquisition price (calculated pursuant to FE 7 (b) = $2.34)
c = income/expenditure in previous years ($4.48 + $9.00 + $9.00 + $9.00 = $31.48)

As all the amounts other than the coupon payments are attributable to the underlying shares, the issue price and share market value can be ignored for the purposes of calculating income and expenditure. This effectively gives the Note an acquisition price, calculated pursuant to FE 7 (b), of $2.34 (for accrual purposes).

Expenditure

= a – (b + c)
= $36.00 – ($2.34 + $31.48)
= $2.18

(ii) Income for the New Holder

a = sum of all amounts paid to (1 × $2.16 + 7 × $4.50 = $33.66)
b = acquisition price
c = income/expenditure in previous years (1 × $4.48 + 3 × $9.00 = $31.48)

Income

= a – (b + c)
= $33.66 – (0 + $31.48)
= $2.18.

Example C

The new (post-amalgamation) Holder (“Holder Two”) of the Notes described in Example B sells the Notes on 3 August 1996, for $120, to a new holder (“Holder Three”).

The sale of the Notes takes place part way through an interest period, so it is necessary to apportion the Coupon Interest Payment between the seller and the purchaser.

The Coupon Interest Payment for this period amounts to $4.50. Using a straight-line apportionment, $0.91 of the $4.50 is attributable to that portion of the period ending 3 August 1996 during which the Notes were owned by Holder Two ($4.50 × 37/183). There are 183 days in the coupon period, and there are 37 days from the beginning of the period until the day that the Notes are sold. This amount of $0.91 is income to Holder Two and acquisition price to Holder Three. Holder Two would be considered to have sold the equity portion of the convertible Notes for $119.09.

Holder Three elects on 27 April 1998 to convert the Notes on 27 June 1998. Interest is not payable for the 56 day period prior to any conversion arising before the specified maturity date. 27 June 1999. The last coupon payable on conversion is therefore reduced from $4.50 to $3.12. (183 - 56 = 127. 127/183 × $4.50 = $3.12)

(a) Year Ended 31 March 1995

As for Example B.
Income/Expenditure

$6.82

(b) Year Ended 31 March 1996

As for Example B.
Income for Original Holder

$4.52
Income for New Holder (Holder Two)

$4.48
Expenditure for the Original Issuer

$4.52
Expenditure for the Amalgamated Issuer

$4.48

(c) Year Ended 31 March 1997

(i) Income for the Original Holder

Since this is the final year of the arrangement from the point of view of Holder Two, the base price adjustment is applied to the sale on 3 August 1996, using the following values:

a = the sum of all amounts paid ($2.16 + $4.50 + $0.91)
b = acquisition price
c = income/expenditure in previous years ($4.48)

Income

= a – (b + c)
= $7.57 – (0 + $4.48)
= $3.09

(ii) Income for the New Holder

Coupon Payment Due on 27/12/96.

$4.50

From this, the holder subtracts the acquisition price.

($0.91)

$3.59

Apportionment of coupon payment due on 27/6/97.
There are a total of 182 days in the period between payments. Of these, 94 are in the year ended 31 March 1997.

94/182 × $4.50

Income

$2.32

$5.91

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