Peter Costello

Media Releases

Canwest/TNQ Float Proposal

NO. 025

EMBARGO

Immediate Release

Foreign Investment Policy: Ownership Structure for the Ten Group Ltd (TGL) - Canwest/TNQ float proposal

The Treasurer has informed both CanWest Global Communications Corp (CanWest) and Telecasters North Queensland Limited (TNQ) that the Government has no objections to the CanWest/TNQ float proposal in relation to the Ten Group Limited (TGL) as now amended as a consequence of earlier objections.

The Government informed the parties on 27 February 1998 that the proposal, as then structured, contained unacceptable provisions which were not consistent with the Government’s foreign investment policy. Following further discussions, both CanWest and TNQ subsequently agreed to remove the unacceptable provisions and to comply with the Government’s requirements.

The Government’s specific concerns related to components of the float proposal that constrained Ten Network Holdings (TNH) shareholders’ voting in relation to TGL, provided certain pre-emptive rights for CanWest to acquire TGL shares and affected the operation of the 90 per cent majority requirement for special resolutions to change TNH’s articles. These unacceptable provisions have now been removed.

Under the Government’s foreign investment policy, a foreign person must not be able to exercise control of a television broadcasting licence or own more than 15 per cent of a free to air television broadcaster. In addition, aggregate foreign investment is limited to 20 per cent. CanWest’s scope to have up to a 57.5 per cent interest in TGL (through convertible debentures in addition to holding shares) reflects the special circumstances prevailing at the time of CanWest’s initial investment in TGL as determined by the Government. The use of quasi equity in this particular case is not a precedent for the application of the Government’s foreign investment policy.

 

Canberra ACT
6 March 1998

Contact Mr Tony Hinton
Treasury/FIRB
(02) 6263 3755

 

6 Mar 1998

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