✨ Financial Determination Examples
1 MARCH 2012 NEW ZEALAND GAZETTE, No. 26 761
(5) The base price adjustment required for the 2021 income year will be as follows:
EXAMPLE A
| Description | Amount |
|---|---|
| Consideration | |
| Paid/payable to the Issuer | 100,000,000.00 |
| Less paid/payable by the Issuer | 100,000,000.00 |
| Total CPI Adjustment* | 21,472,063.33 |
| Total interest | 44,157,430.48 |
| 165,629,493.81 | |
| Consideration | –65,629,493.81 |
| Less income | 0.00 |
| Plus expenditure | |
| CPI Adjustment | 19,072,689.04 |
| Total interest | 39,334,852.73 |
| Total expenditure | 58,407,541.77 |
| Plus amount remitted | 0.00 |
| Base price adjustment | –7,221,952.04 |
Notes
A deduction will be available to the Issuer in the 2021 tax year of $7,221,952.04 (which is the current year’s coupon interest and CPI adjustment).
*The initial investment plus the total CPI Adjustment will equal the Adjusted Principal Amount.
Example B: Adjusted Principal Amount is equal to or less than the value of Shareholder’s Shares
(1) This example proceeds on the same basis as Example A, except that on conversion, the Adjusted Principal Amount will be equal to, or less than, the total value of the Shareholder’s Shares.
(2) The deductions allowed are the same as in Example A.
(3) The base price adjustment is the same as in Example A.
(4) All other amounts will be attributable to the equity component of the MCNs. In particular (and this is the point of this example), the difference between the value of the Noteholder Shares and the Adjusted Principal Amount will be attributable to the equity component of the MCNs.
Example C: Extension of term
(1) This example proceeds on the same basis as Example A, except that the Issuer elects to extend the term of the MCNs by three years (as contemplated by the Deed Poll).
(2) The Issuer will be allowed deductions in the same way as described in Example A except that the coupon interest will be calculated at a higher rate for the period after the extension. The expenditure during the three-year extension period, for which deductions will be allowed, is set out in the table in Appendix 2.
(3) As with Example A, all other amounts will be attributable to the equity component of the MCNs.
(4) The base price adjustment required if the period is extended will be as follows:
EXAMPLE C: Extension of term
| Description | Amount |
|---|---|
| Consideration | |
| Paid/payable to the Issuer | 100,000,000.00 |
| Less paid/payable by the Issuer | 100,000,000.00 |
| Total CPI Adjustment* | 28,964,194.40 |
| Total interest | 62,980,811.38 |
| 191,945,005.78 | |
| Consideration | –91,945,005.78 |
| Less income | 0.00 |
| Plus expenditure | |
| CPI Adjustment | 26,416,831.95 |
| Total interest | 56,580,737.65 |
| Total expenditure | 82,997,569.60 |
| Plus amount remitted | 0.00 |
| Base price adjustment | –8,947,436.18 |
Notes
A deduction will be available to the Issuer for the 2024 tax year of $8,947,436.18 (which is the current year’s coupon interest and CPI adjustment).
*The initial investment plus the total CPI Adjustment will equal the Adjusted Principal Amount.
Next Page →
NZ Gazette 2012, No 26
✨ LLM interpretation of page content
💰
Special Determination S19: Mandatory Conversion Convertible Notes with Consumer Price Index Adjustments to Face Value
(continued from previous page)
💰 Finance & RevenueTax Administration Act 1994, Financial Arrangements Rules, Convertible Notes, Consumer Price Index, CPI Adjustment, Base Price Adjustment, Deductions, Issuer, Shareholder, MCNs