Explanatory
Statement
In relation to a proposal to staple the shares
in Lend Lease Corporation Limited to the
units in Lend Lease Trust.
This document is issued by Lend Lease
Corporation Limited ABN 32 000 226 228.
Lend Lease
Contents
Important
Notices
Chairman’s letter
Key shareholder actions
Important dates
1 Overview of the Stapling Proposal
2 Rationale for the Stapling Proposal
3 Financial impacts of the Stapling Proposal
4 Mechanics of the Stapling Proposal
5 Tax Report
6 Additional Information
7 Glossary
Annexure A: Summary of proposed amendments
to the Lend Lease constitution
Annexure B: Summary of LLT constitution
What is this document?
This document is an explanatory statement issued by Lend Lease
Corporation Limited (ABN 32 000 226 228) (Lend Lease) dated
12 October 2009 and provides shareholders of Lend Lease with
details of the structure of Lend Lease and Lend Lease Trust
(ARSN 128 052 595) (the Lend Lease Group) following the
stapling of Lend Lease Shares to units in the Lend Lease Trust
(LLT) (if approved). It also sets out details of the rights and liabilities
attaching to LLT Units.
A product disclosure statement in relation to the Stapling
Proposal will not be issued in Australia and this document will
not be lodged or registered with any regulatory body in Australia or
any other country. As detailed in section 6 “Regulatory Consents”,
ASIC has provided relief to Lend Lease from the requirement that
this explanatory statement be issued as a product disclosure
statement. Neither ASIC nor ASX takes any responsibility for
this document or the merits of the Stapling Proposal.
LLT is a managed investment schemed registered under
Chapter 5C of the Corporations Act. Lend Lease Responsible
Entity Limited (ABN 72 122 883 185) (RE) is the responsible
entity of LLT.
This document also contains a tax report by Greenwoods
& Freehills Pty Ltd (see section 5).
No investment advice
The information outlined in this explanatory statement does
not constitute financial product advice and has been prepared
without reference to your particular investment objectives, financial
situation, taxation position and particular needs. It is important that
you read this explanatory statement in its entirety before making
any decision on how to vote on the Stapling Proposal. If you
are in any doubt in relation to these matters, you should consult
your investment, financial, taxation or other professional adviser.
Stapling Proposal Information Line
Within Australia: 1800 256 290
Outside Australia: +61 3 9415 4811
Lease Corporation Limited registered office
Level 4, 30 The Bond
30 Hickson Road
Millers Point NSW 2000
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Defined terms
Capitalised terms used in this explanatory statement are defined
in the Glossary in section 7. The Glossary also sets out some
rules of interpretation which apply to this explanatory statement.
Forward looking statements
Statements of intent in relation to future events should not be
taken to be a forecast or prediction that those events will occur.
Actual events or results may differ materially from the events or
results expressed or implied in any forward looking statement
and deviations are both normal and to be expected. Lend Lease
and the RE, their respective officers, and any person named
in this explanatory statement or involved in the preparation of
this explanatory statement do not make any representation
or warranty (either express or implied) as to the accuracy or
likelihood of fulfilment of any forward looking statement, or any
events or results expressed or implied in any forward looking
statement. Accordingly, you are cautioned not to place undue
reliance on those statements.
Any forward looking statements in this explanatory
statement reflect views held by Lend Lease at the date
of this explanatory statement.
Notice to Lend Lease Shareholders in jurisdictions
other than Australia
The LLT Units have not been registered under the US Securities
Act of 1933, as amended (the Securities Act), or any applicable
United States securities laws. Such securities may not be offered
or sold in the United States, or for the account or benefit of, a
US Person (as defined in Regulation S under the Securities Act)
unless such securities have been registered under the Securities
Act or an exemption from the registration requirements of the
Securities Act and applicable US State securities laws is available.
Lend Lease Shareholders who are subject to taxation outside
Australia should consult their tax adviser as to the applicable tax
consequences of holding Stapled Securities and the transactions
described in this explanatory statement.
Share registry
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney, NSW 2000
Chairman’s
letter
12 October 2009
Dear Shareholder
I have great pleasure in enclosing for your consideration a proposal to amend the Lend Lease constitution
to allow the stapling of your Lend Lease shares to units in a new Lend Lease Trust (LLT).
If approved, you will receive (by way of dividend) one unit in LLT for each of your Lend Lease shares and
the shares and units will be “stapled” to trade together as a single stapled security on ASX. So, for example,
any time you transfer a Lend Lease share, you will also transfer the attached LLT unit. The value of the
dividend will be nominal.
This explanatory statement sets out the information you need to know about the proposal, and I urge you
to read it carefully.
The current proposal does not signal an intention to depart from our existing strategy, neither is it our
intention to be included within the Listed Property Trust index. The stapling simply provides greater
flexibility for the optimum holding of assets acquired in the future. Our Annual General Meeting provides an
excellent opportunity for shareholders to consider and vote on this proposal.
Traditionally, Lend Lease targets to earn circa 20% of its EBITDA from recurring earning streams, including
from the ownership of passive assets. If approved, the stapled structure should provide flexibility for
Lend Lease to hold such assets in a more efficient manner, providing opportunities to improve shareholder
returns. Please note that tax restrictions prevent the transfer of existing Lend Lease assets to LLT and
therefore LLT would only acquire assets in the future. There are currently no specific assets identified to
be acquired by LLT.
LLT will initially have only minimal capital. Options for further capitalising LLT will be considered in light of any
acquisition opportunities which may emerge over time, and put to shareholders if necessary at that time.
I believe the Stapling Proposal as outlined in this booklet should further strengthen our existing platform
for the long term future of Lend Lease. The directors unanimously support the proposal and urge you
to vote in favour of the stapling resolutions at our Annual General Meeting on 12 November 2009.
Yours sincerely,
David Crawford AO
Chairman
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Key
shareholder
actions
Important
dates
Read this
document
in full
You should read this explanatory statement in full. It contains important
information to assist you in your voting decision. If you have any questions
about the Stapling Proposal, please contact the Stapling Proposal
Information Line on 1800 256 290 (if in Australia) or +61 3 9415 4811
(if outside Australia).
Vote on the
Stapling
Resolutions
It is important that you vote on the Stapling Resolutions to be considered
at the AGM on 12 November 2009 at the City Recital Hall, Angel Place,
Sydney NSW. The stapling will not proceed unless it is approved by a
75% majority of the votes cast by Lend Lease Shareholders attending
the meeting in person or by proxy.
Directors’
recommendation
The directors believe approval of the Stapling Resolutions
should give Lend Lease greater flexibility and a more efficient
structure in relation to future asset holdings and property
investments, providing opportunities to enhance returns to
investors. The directors unanimously recommend that you vote
in favour of the Stapling Proposal.
Your vote is
important
If you are unable to attend the Lend Lease AGM on 12 November 2009,
you may appoint a proxy to vote your shares on your behalf. If you wish
to appoint a proxy, you need to complete the proxy form enclosed with
this explanatory statement and return it to the address indicated on the
form by no later than 10:00am on 10 November 2009.
SYDNEY TIME
AND DATE 2009
EVENT
10:00 am,
tuesday
10 November
Closing date and time for receipt of completed proxy forms for the
Lend Lease AGM
10:00 am,
thursday
12 November
Lend Lease AGM
thursday
12 November
Last day of trading in Lend Lease Shares separately on ASX*
friday
13 November
Deferred settlement trading commences in Stapled Securities*
5:00 pm,
thursday
19 November
Record time for determining entitlements of Lend Lease Shareholders to
Stapled Securities (i.e. record date both for stapling and dividend in specie)*
friday
20 November
Effective Date
Date and time for determining eligibility to vote at the Lend Lease AGM
Last day for Lend Lease to register transfers on a pre-stapling basis*
– Dividend in specie paid to Lend Lease Shareholders*
– LLT Units and Lend Lease Shares become stapled*
thursday
26 November
Last day of trading on ASX of Stapled Securities on a deferred
settlement basis*
Completion of despatch of holding statements for Stapled Securities
and dividend statements*
friday
27 November
Commencement of normal trading on ASX of Stapled Securities on
a T+3 basis*
All dates and times are indicative only and items marked ‘*’ will only apply if the Stapling Resolutions are approved. The actual times
and dates will depend on factors outside the control of Lend Lease, including approval from ASX. Any changes to the above timetable
will be notified on Lend Lease’s website www.lendlease.com.au and announced to ASX. All times are referenced to the time in Sydney,
New South Wales, except where stated otherwise.
2
1 Overview of the Stapling Proposal
What is the
purpose of
this booklet?
Lend Lease Shareholders are being asked to approve amendments to the
Lend Lease constitution (by special resolution) to allow the stapling of
Lend Lease Shares to LLT Units. This booklet provides information to shareholders about LLT and the Stapling Proposal.
What is the
reason for
the Stapling
Proposal?
Lend Lease is proposing to establish LLT to allow Lend Lease the flexibility
to hold property investment assets in the future in a more efficient structure,
aimed at enhancing returns to investors from any such investments as may arise.
Currently, there are no plans to buy any such assets, but the current economic
environment may present opportunities. LLT will be established with only minimal
capital. If appropriate assets are identified in the future, the Lend Lease Group
will seek to reallocate capital from Lend Lease to LLT to ensure an appropriate
spread of capital across the entities in the Lend Lease Group. If necessary,
Lend Lease Shareholders will be approached further at that time to approve the
proposal. Full information would be provided at the relevant time. Further details
on possible capitalisation options are set out in section 2.
More detail on the reasons for the Stapling Proposal is also set out below under
the heading ‘Rationale for the Stapling Proposal’.
Who will
manage LLT?
LLT will be managed by its “responsible entity” – Lend Lease Responsible Entity
Limited (ABN 72 122 883 185) (RE).
Who owns LLT?
LLT is currently 100% owned by Lend Lease. However, if the Stapling Proposal
is approved, the units in LLT will be distributed to Lend Lease Shareholders
as an “in specie” dividend. This means that the ownership of the units will
be transferred from Lend Lease to its shareholders so that LLT will become
100% owned by Lend Lease Shareholders.
What is an “in
specie” dividend?
An “in specie” dividend is a dividend of specific assets, as opposed to cash.
How many LLT
Units will
I receive?
If the Stapling Proposal is approved, you will receive a dividend of one LLT Unit
for every one of your Lend Lease Shares.
What will happen
after I receive my
LLT Units?
Following approval of the Stapling Proposal and payment of the dividend, the
LLT Units will become “stapled” to Lend Lease Shares.
When a company pays a dividend it distributes part of its assets to its
shareholders. Usually a company pays dividends in the form of cash. Dividends
can also be paid in the form of non-cash assets, where the company distributes
actual property to shareholders. The Lend Lease constitution authorises the
company to pay dividends “in specie”. The value of this dividend will be nominal,
(approximately 0.1 cents per share).
For example, if you hold 1,000 Lend Lease Shares then, following the dividend,
you will hold 1,000 Lend Lease Shares and 1,000 LLT Units.
Lend Lease Shares and LLT Units will then trade together on ASX as a single
security, and will not be able to be dealt with separately.
Following the stapling, Lend Lease and LLT will operate as a coordinated
economic group.
3
1
Overview of
the Stapling
Proposal
continued
What does it
mean to “staple”
LLT Units to
Lend Lease
Shares?
LLT Units are issued on particular terms which are contained in the LLT trust
deed. These terms provide that each unit is stapled to a Lend Lease Share.
Each unit must be dealt with as if it were “stapled” to the corresponding number
of shares. For example, each unit can only be transferred if the share to which it
is stapled is transferred to the same person. The proposed amendments to the
Lend Lease constitution impose the same requirements on Lend Lease Shares.
This will mean that you can’t separately deal with your Lend Lease Shares and
LLT Units.
How much are LLT
Units worth?
LLT will hold a cash amount of $460,768.61 paid to establish LLT, but no other
assets. LLT has not undertaken any business activities.
Accordingly, LLT Units have a nominal value only. As indicated above, the
stapling provides the opportunity for the future acquisition of assets in the Trust
through a more efficient structure, aimed at enhancing returns to investors from
passive property investments which may be identified.
When do I receive
my LLT Units?
Lend Lease will distribute LLT Units to eligible shareholders as an “in-specie”
dividend if the Stapling Proposal is approved.
The record date and time for determining entitlements to the LLT Units will
be 5:00pm on 19 November 2009 and the distribution will be paid to eligible
shareholders after close of trade on ASX on 20 November 2009.
You do not have to pay anything (or complete any forms) to receive your units.
After stapling, LLT will send you a form that you can use to re-supply your TFN
or ABN or exemption so that tax is not withheld on your distributions. Your
shareholding details will be updated automatically when the units are distributed.
What are the tax
consequences?
An overview of the Australian tax consequences of the Stapling Proposal for
Lend Lease Shareholders is set out in the Tax Report from Greenwoods &
Freehills in section 5.
However, you should consult your own tax adviser for tax advice tailored
to your own particular circumstances. Lend Lease Shareholders who are
subject to taxation outside Australia should obtain their own advice as to the
tax consequences of the Stapling Proposal, which may be different to those
applicable to Australian Lend Lease Shareholders.
What are the
functions of
the RE?
The RE is wholly owned by Lend Lease and holds an Australian Financial
Services License (AFSL). The RE will be responsible for managing LLT in
accordance with the LLT constitution (summarised in Annexure B) and the
Corporations Act.
Who are the
directors of
the RE?
The directors of the RE will be the same as the directors of Lend Lease.
Information about the Lend Lease directors has previously been disclosed
to Lend Lease Shareholders.
STRUCTURE
DIAGRAM
Set out below is a diagram that shows the relationships between Lend Lease,
LLT and Lend Lease Shareholders, before and after the stapling.
Before stapling:
LEND LEASE SHAREHOLDERS
100%
LEND LEASE CORPORATION LIMITED
100%
LEND LEASE TRUST1
After stapling:
LEND LEASE SHAREHOLDERS
100%
Stapled entities
LEND LEASE TRUST1
LEND LEASE CORPORATION LIMITED
1The responsible entity of Lend Lease Trust is Lend Lease Responsible Entity Limited, a wholly
owned subsidiary of Lend Lease.
4
Explanatory Statement Lend Lease Corporation
2Rationale for the Stapling Proposal
Efficient
structure to
hold passive
assets
Lend Lease’s vision is to be the leading international property company. We are
committed to creating and building innovative and sustainable solutions, forging
partnerships and delivering strong investment returns. The proposed change
in corporate structure will not mean we will be digressing from our existing
business strategy and model.
Traditionally, Lend Lease targets to earn circa 20% of EBITDA from recurring
earnings, including from passive asset ownership. From time to time it is likely
we will be an acquirer of passive real estate assets. Given the tax transparent
nature of a trust, a stapled structure should improve the efficiency of returns from
passive asset ownership.
Lend Lease currently owns passive assets in a corporate structure. Stapled
structures are quite common in Australia. The directors believe there are benefits
that should flow to shareholders from having a trust stapled to the company.
Primarily the stapling allows the Lend Lease Group to acquire property
assets and to distribute earnings to investors on a pre-tax basis. A portion
of distributions may also be tax deferred (see below).
Income generated from passive property investment assets acquired by LLT
could be distributed to Stapled Security Holders without deduction of tax at the
company tax rate of 30%, which is the rate which would apply if the assets were
held by Lend Lease.
Initially, while LLT holds no material assets, the stapling will have minimal impact.
Taxation restrictions prevent a transfer of existing Lend Lease assets to LLT.
Once assets (yet to be identified) are acquired and LLT is capitalised, potential
benefits which are targeted to flow from the stapling are:
–– more predictable distributions on income generated from passive assets;
–– yield enhancement from income streams on passive assets;
–– enhanced cash position of investors where distributions are treated as tax
deferred (see below); and
–– improved liquidity.
Distributions to Stapled Security Holders from LLT will be taxable in the hands
of the Stapled Security Holders at the tax rates applicable to them. Following
capitalisation of LLT, a portion of these distributions may also be “tax deferred”.
Tax deferred distributions are generally not taxable immediately, but reduce the
cost base of the relevant securities. This reduction of cost base is then taken into
account in calculating taxable gains when the securities are sold. However, if the
amount of the distribution is greater than the Stapled Security Holder’s current
cost base, the cost base will be reduced to zero and any excess will be taxable
as a gain on receipt. If the securities have been held for more than 12 months,
discounted capital gains tax treatment may be available on any gains. It is noted
that the cost base of LLT Units will initially be minimal, but the intention is that this
would be substantially increased (if possible) on capitalisation of LLT. For further
detail, see discussion under heading “Tax deferred distributions” in section 3.
5
2
Rationale for
the Stapling
Proposal
continued
6
Future intentions
for asset
acquisitions
There are currently no specific property assets proposed for acquisition.
The company’s AGM simply provides a good opportunity for the introduction
of the Stapling Proposal with a shareholder vote.
Future
capitalisation
of LLT
If the Stapling Proposal is approved, LLT will have minimal capital. If suitable
property assets are acquired in the future, the intent is that LLT will be
further capitalised.
This may be effected by way of a reallocation of capital from LLC to LLT.
Potentially this could involve a capital reduction (requiring further Lend Lease
Shareholder approval) with the amount of the reduction being applied as capital
of LLT on behalf of Lend Lease Shareholders.
Any capital reduction of Lend Lease would be equally applied to all Lend Lease
Shareholders and would require a shareholder vote and taxation approvals.
The proceeds of any such reduction would be applied on behalf of Lend Lease
Shareholders to further capitalise LLT, so that the relevant capital of Lend Lease
would from that time become capital of LLT, to be applied pro-rata across
each of the existing stapled units. The constitution of LLT and the proposed
amendments to the LLC constitution provide flexibility for this mechanism to
be effected with majority shareholder approval.
Another capitalisation mechanism could be by LLT issuing Unstapled Units
to LLC. Any issue of such units would be subject to all necessary approvals
and waivers, including ASX and taxation (with ASX already having provided in
principle approval). If issued, the rights of the Unstapled Units would be the same
as for LLT Units but they would not be stapled to Lend Lease Shares while held
by Lend Lease or any of its subsidiaries and would not be quoted for trading
on ASX. The Unstapled Units (if issued) would be a solely intra-staple funding
mechanism, with transfers not permitted outside the group. Consistent with
this, voting of Unstapled Units would also be restricted so that they would only
be voted in the same proportions that Stapled Security Holders vote their units.
Again, flexibility for this mechanism has been included in the LLT constitution,
but subject to all necessary approvals.
No firm decision has been made for the best means of capitalising LLT.
This will be considered in light of any specific asset acquisition opportunities,
having regard to the efficiency and cost of any capitalisation structures and
the interests of Stapled Security Holders.
Explanatory Statement Lend Lease Corporation
3Financial impacts of the Stapling Proposal
Implementation of the staple
Financial impact for Lend Lease
Future operation of the staple
Flexibility
The Stapling Proposal simply involves an “in specie”
dividend, comprising units having a nominal value.
The stapling itself will have no financial impact on the
Lend Lease Group other than implementation costs
and a small reduction in retained earnings equal to
the amount of the dividend, (i.e. $460,768.61).
The amount of the dividend will become the
equity of LLT.
LLT will not initially hold any material assets.
Prior to any asset acquisition, the impact of the
staple will be negligible.
However, on a passive asset acquisition, Lend Lease
believes that the greater flexibility offered by the
stapled structure creates the potential for enhanced
returns to shareholders.
Financial impact for Lend Lease
Shareholders
The financial impact for Lend Lease Shareholders is
that they will receive a dividend valued at 0.1 cents
per share, which will be fully franked. Tax impacts
for Lend Lease Shareholders will therefore be
negligible. The Tax Report in section 5 addresses
this in more detail.
RE costs
The RE will not receive any fees for performing its
role as responsible entity of LLT, but will recover
its costs. The additional costs of administering the
Trust are not anticipated to be material.
Hypothetical example
To illustrate the potential advantages of the staple
for Lend Lease and its shareholders, we have set
out below a simple hypothetical example assuming
acquisition of a $1 billion passive property portfolio.
The example has been prepared on a number of
assumptions (as set out below) and is purely for
illustrative purposes. While it seeks to approximate
the position on an asset acquisition, it does not
precisely reflect the detail of any asset acquisition
which may occur.
Hypothetical returns in the example are not
a forecast or target and should not be relied
on as such.
Distribution policy
Lend Lease’s current dividend policy is to pay out
between 40% and 60% of net operating profit
after tax. If and when any assets are acquired in
LLT, this dividend policy will be reviewed in light
of prevailing circumstances.
7
3
Financial
impacts of
the Stapling
Proposal
continued
Hypothetical example
Part A – Impacts of Staple on Lend Lease Group
The example below illustrates the potential difference in net profit of the proposed Stapled structure relative
to the existing Company structure on the hypothetical acquisition of a $1 billion passive property portfolio
(based on the assumptions set out below) for a full year.
Company
Structure
Profit & Loss ($ millions)
Net operating income from asset
Interest expense
Interest Received
Net profit before tax
Tax
Net profit/(loss) after tax
Consolidated group profit after tax
Stapled
Structure
Company
Company
Trust
$90.0
–
$90.0
($70.0)
($70.0)
($35.0)
–
$20.0
$35.0
($35.0)
–
$55.0
($6.0)
$14.0
$14.0
$10.5
($24.5)
–
$55.0
$30.5
Assumptions
General assumptions
Assets yield 9% per annum.
The example does not include transaction costs, operating costs, capital expenditure or depreciation
and amortisation.
Numbers have been rounded to the nearest $100,000.
Company structure assumptions
Assets financed 100% by 3rd party debt ($1 billion) at 7% per annum.
Company tax rate of 30%.
Company pays dividends equal to 50% of net profit after tax.
The company has the ability to fully frank dividend payments.
Stapled structure assumptions
LLT acquires the assets.
LLT is capitalised with $500 million indirectly from the Company.
Company lends LLT $500 million and charges LLT 7% interest per annum on the loan.
Company borrows $1 billion from a 3rd party at 7% per annum.
Company tax rate of 30%.
8
Explanatory Statement Lend Lease Corporation
Part B – Impacts of Staple on Lend Lease
Shareholders
Distribution policy
Distributions payable from the stapled structure
could include a distribution from LLT and a dividend
from the Company.
It is intended that distributions from the Trust will be
equivalent to all net operating income of LLT after
any allowance that the RE considers prudent as a
provision for future expenditures.
Lend Lease will need to assess the dividend payout
policy of the Company from time to time in light
of prevailing circumstances. As indicated above,
Lend Lease’s current dividend policy is to pay out
between 40% and 60% of the Company’s net
operating profit after tax.
Capital gains realised by LLT on the disposal of
assets held for at least 12 months would be taxable
to Australian Stapled Security Holders under the
‘discount capital gains’ method. This means that
only half the gain would be taxed in the Stapled
Security Holders’ hands. A Stapled Security Holder
on a top marginal rate of 46.5% would effectively
only pay tax at the rate of 23.25% on the capital
gain. ‘Discount capital gains’ is explained in the Tax
Report. This discount capital gains regime does not
apply to gains realised by a company or to dividends
distributed by a company.
Potential for enhanced returns
With these characteristics, Lend Lease believes
that the stapled structure creates the potential for
enhanced returns to shareholders from passive
property investments over time.
Portfolio distributions
Stapled structure
Tax deferred distributions
From the above example, under the stapled
structure LLT would have distributable operating
income of $55 million, which could be distributed
to Stapled Security Holders. All Stapled Security
Holders would be required to pay their tax
obligations at the tax rate applicable to their
individual situation.
The distribution from LLT could be offset to some
extent by some reduction in the amount that could
be distributed from the Company as a result of the
diminution in the after tax profit of the Company.
Based on the above example, the funds available for
the Company to distribute would be reduced by the
loss after tax of $24.5 million.
A significant benefit of a stapled structure is usually
the passing of tax deferred income streams directly
to Stapled Security Holders. Tax deferred income
arises, for example, from depreciation benefits
associated with building ownership. For amounts
of tax deferred income, tax is not generally payable
immediately, but the amount received by the
Stapled Security Holder reduces the cost base of
their securities. Tax is then paid by way of additional
capital gains tax on disposal, but a discount may
apply where the security has been held for more
than 12 months. This can substantially reduce the
amount of tax paid on that income.
Company structure
Utilising the same example, the Company could pay
a fully-franked dividend of $7 million (assuming the
Company had a dividend policy of paying 50% of
net profit after tax).
Each Lend Lease Shareholder’s tax profile will differ
according to their personal circumstances and they
should therefore seek their own personal tax advice.
Other benefits of the stapled structure for
Stapled Security Holders
Another feature of the stapled structure is that
significant benefits may flow from tax deferred
income that may be distributed from the
Trust. These potential benefits are discussed
further below.
The stapled structure could also be beneficial for
non-resident Stapled Security Holders due to the
different withholding tax regime applicable to trust
distributions to non-residents.
What is tax deferred income?
Cost base
This benefit is only applicable where there is
sufficient cost base of the security.
If not, tax will apply to the tax deferred income
received by the Stapled Security Holder. Initially
the tax cost base on the units distributed in specie
will be approximately 0.1 cents. However, on
capitalisation of the Trust (as described above)
the intention is (if possible) that the cost base of
the LLT Units could be substantially increased to
allow Stapled Security Holders the benefits of tax
deferred income. Non-residents
In the case of non-residents tax deferred income
streams are not subject to Managed Investment
Trust (MIT) withholding tax and capital gains
tax should not apply on disposal. Australian tax
treatment for these Stapled Security Holders may
therefore be attractive.
We have not sought to model these benefits in the
above examples, given the number of variables.
However these benefits may be significant.
9
4 Mechanics of the Stapling Proposal
10
How does stapling work?
Process for implementing stapling
The stapling means that Lend Lease Shares and
LLT Units trade as one security on ASX and cannot
be traded or dealt with separately. For example:
–– a transfer of LLT Units can only occur if
accompanied by a transfer of the same number
of Lend Lease Shares;
–– a LLT Unit will automatically transfer to a
transferee of the attached Lend Lease Share; and
–– any issue, repurchase, capital reduction or
redemption of Lend Lease Shares can only occur
if matched by a corresponding issue, repurchase,
capital reduction or redemption of the same
number of LLT Units (and vice versa).
These features arise from the stapling provisions
proposed in the Lend Lease and LLT constitutions.
Other features of the stapling are:
–– Lend Lease and LLT will operate as a
co‑ordinated economic group;
–– Lend Lease and LLT will have identical
investors with an identical proportionate
interest in each entity;
–– Lend Lease and the RE will have the same
directors, enabling the Lend Lease Group
to operate in a co-ordinated manner;
–– the Lend Lease and LLT constitutions allow
for the affairs of each entity to be operated in
a co-ordinated manner. For example, general
meetings of Lend Lease and LLT may be held
simultaneously, as ‘Stapled Security Holder
meetings’; and
–– Stapled Security Holders will receive a single
distribution and dividend cheque.
The process for achieving the stapling is as follows
(if approved):
1 The Lend Lease constitution will be amended
to insert the stapling provisions (summarised
in Annexure A). The LLT constitution already
contains equivalent provisions.
2 Lend Lease will pay Lend Lease Shareholders an
“in specie” dividend comprising LLT Units, which
until this point have been held by Lend Lease.
The LLT Units will be distributed in the proportion
of one LLT Unit for every Lend Lease Share on
issue. Following the “in specie” dividend, LLT will
be wholly owned by Lend Lease Shareholders.
3 Simultaneously with the “in specie” dividend, the
stapling provisions in the Lend Lease and LLT
constitutions take effect to achieve the stapling.
4 On 27 November 2009, normal trading in the
Stapled Securities will commence on ASX.
5 The Stapled Securities will continue to trade
under the ASX code LLC.
Explanatory Statement Lend Lease Corporation
Terms of issue of Stapled Securities
The rights and obligations of Stapled Security
Holders will be principally governed by the
constitutions of Lend Lease and LLT and the
Corporations Act. They may also be affected by
the Listing Rules and other laws applicable to
Lend Lease, LLT and Stapled Security Holders
from time to time.
The proposed stapling provisions of the LLC
constitution are summarised in Annexure A.
The LLT constitution is summarised in Annexure B.
5 Tax Report
The Directors
Lend Lease Corporation Limited
30 The Bond
30 Hickson Road
Millers Point NSW 2000
6 October 2009
Dear Directors
Australian Taxation Report
We have been asked by Lend Lease Corporation Limited (“Lend Lease”) to prepare a report on the
Australian taxation issues arising in relation to the transactions described in detail in the Explanatory
Statement and summarised below (the “Stapling Proposal”).
The information contained in this report is of a general nature only. It does not constitute tax advice and
should not be relied upon as such. This report outlines the general Australian taxation implications for
Lend Lease Shareholders in respect of their participation in the Stapling Proposal and from the holding
and disposing of Stapled Securities.
We have dealt with resident Stapled Security holders, which includes Lend Lease Shareholders (as they
will become Stapled Security holders as a result of the Stapling Proposal) (“Stapled Security Holders”)
who are individuals, complying superannuation entities and companies holding their investments on capital
account. We have also considered non-resident Stapled Security Holders, but only on the basis that there
will be no non-resident who holds, together with associates, an interest of 10% or more in the Stapled
Securities. We have not addressed the tax treatment for Stapled Security Holders who hold their securities
on revenue account such as banks and other trading entities or non-resident Stapled Security Holders who
currently hold Lend Lease Shares (or who will hold Stapled Securities) through a permanent establishment
in Australia.
All investors should seek independent professional advice on the consequences of their
participation in the Stapling Proposal, based on their particular circumstances. Lend Lease
Shareholders who are not resident in Australia should obtain advice on the taxation
implications arising in their local jurisdiction of participating in the Stapling Proposal.
Unless otherwise stated, terms used in this report are defined in the same way as they are in the
Explanatory Statement.
This report is based on the provisions of the Income Assessment Act 1936, the Income Tax Assessment Act
1997, the A New Tax System (Goods and Services Tax) Act 1999 and related acts, regulations and Australian
Taxation Office (“ATO”) rulings and determinations applicable as at the date of this letter.
1 Background
1.1 Stapling Proposal
Under the Stapling Proposal, Lend Lease Shares will be stapled to Lend Lease Trust (“LLT”) Units. To effect
the Stapling Proposal:
–– Lend Lease has established LLT by subscribing 0.1 cents per LLT Unit with the total number of LLT Units
being equal to the number of Lend Lease Shares on issue;
–– Lend Lease Shareholders participating in the Stapling Proposal will receive a fully franked “in specie”
stapling dividend (the “Stapling Dividend”) that will comprise one LLT Unit for every Lend Lease Share
they hold at the Stapling Record Date; and
–– each Lend Lease Share and LLT Unit will be stapled and listed on the Australian Securities Exchange
(each a “Stapled Security”).
The general taxation consequences of participating in the Stapling Proposal are outlined in section 2 below.
A description of the Stapling Proposal is set out in section 4 of the Explanatory Statement.
11
5
Tax Report
continued
2 Tax Consequences of Stapling Proposal
2.1 Payment of Stapling Dividend
In relation to the payment of the fully franked “in specie” dividend, Lend Lease Shareholders who are
Australian residents should be required to include the value of the Stapling Dividend plus the attached
franking credit in their assessable income and may be entitled to a tax offset equal to the amount of the
franking credit.
To be eligible for the franking credit and tax offset, the Lend Lease Shareholder must generally have held the
Lend Lease Shares “at risk” for at least 45 days (not including the day of the share’s acquisition or disposal).
However, this rule does not apply to a Lend Lease Shareholder who is an individual and whose tax offset
entitlement (on all shares and interests in shares held) does not exceed $5,000 for the income year ending
30 June 2010.
Non-residents will not be subject to Australian income tax (including withholding tax) in relation to the
payment of the fully franked Stapling Dividend.
2.2 Stapling
An effect of stapling is to apply restrictions to the transferability of the individual securities comprising the
Stapled Security, such that each individual security (i.e. the Lend Lease Share and the LLT Unit) will retain its
legal character without any change of beneficial ownership. As there is no change in beneficial ownership of
the Lend Lease Shares by simply stapling them, there will be no taxable event for Capital Gains Tax (“CGT”)
purposes in relation to the stapling.
3 Holding Stapled Securities
3.1 Summary
If the Stapled Security Holder is an Australian resident taxpayer, the Stapled Security Holder will generally
be taxable on:
–– the Stapled Security Holder’s share of the net income of LLT for tax purposes;
–– the tax deferred (non-assessable) component of distributions made in relation to LLT Units to the extent
the tax deferred amount exceeds the cost base of the LLT Unit;
–– the amount of any dividend received from Lend Lease and any franking credits attached to the dividend;
and
–– any gain arising from the subsequent disposal of the Lend Lease Share and LLT Unit representing the
Stapled Security (except where the Lend Lease Share is a pre-CGT Lend Lease Share).
Where a distribution from LLT includes foreign-sourced income and foreign taxes have been paid in relation
to that income, Australian resident Stapled Security Holders are generally entitled to receive a foreign tax
credit for an amount equal to the lesser of the foreign tax paid and the Australian tax payable in respect
of such income.
If the Stapled Security Holder is a non-resident, the Stapled Security Holder will be taxed on:
–– the Stapled Security Holder’s share of the net income of LLT for tax purposes to the extent that it
is attributable to sources in Australia (LLT will deduct this by way of withholding tax); and
–– the amount of any unfranked dividend received from Lend Lease to the extent that amount is not
declared to be paid out of conduit foreign income for Australian tax purposes (Lend Lease will deduct
this by way of dividend withholding tax).
3.2 Ownership of Stapled Securities – General
Stapled Security Holders will need to treat each component making up the Stapled Security separately
for tax purposes. That is:
–– Stapled Security Holders will receive, and separately deal with the tax consequences of, dividends
from Lend Lease and distributions from LLT; and
–– when the Stapled Securities are disposed of, the Stapled Security Holder will have to separately
consider the tax issues associated with the disposal of the Lend Lease Shares and LLT Units.
3.3 Income Distributions from LLT
The Trustee of LLT is not liable to income tax, including CGT, provided Stapled Security Holders are
presently entitled to all of the income of LLT.
12
Explanatory Statement Lend Lease Corporation
(a) Australian Residents
An Australian resident Stapled Security Holder will include in their assessable income the taxable
component of the LLT distributions to which the Stapled Security Holder is entitled (being the Stapled
Security Holder’s proportionate share of LLT’s taxable income) even if the distributions are reinvested.
If a net capital gain is included in the taxable income of LLT (for example, on disposal of an asset),
Australian-resident Stapled Security Holders will be regarded as having derived a capital gain equal to
their proportionate share of that net capital gain. However, where discount capital gains treatment has
been applied in calculating the net capital gain for LLT, Australian-resident Stapled Security Holders will be
required to gross-up the amount of the capital gain included in their assessable income. Australian-resident
investors can then apply any available capital losses from other sources to offset the capital gain and then
apply their CGT discount factor, if applicable.
If the total cash distributions that an Australian-resident Stapled Security Holder receives in an income
year exceeds his or her proportionate share of the taxable income of LLT, the excess will represent a
“tax deferred” distribution.
The tax deferred component of a distribution an Australian-resident Stapled Security Holder receives will
generally not be included in that Stapled Security Holder’s assessable income. However the tax deferred
component will reduce the cost base of the Stapled Security Holder’s LLT Units.
Where the cost base of a Stapled Security Holder’s LLT Unit is reduced to zero, any further receipts of tax
deferred distributions in respect of that unit will be assessable to the Australian-resident Stapled Security
Holder on receipt as a capital gain. Australian-resident Stapled Security Holders who are individuals,
trustees or complying superannuation entities and who have held the relevant unit for 12 months or more
at the time of the receipt of the distribution should be entitled to apply the applicable CGT discount factor
to reduce the capital gain (after offsetting capital losses). For more information on applying the CGT
discount see section 4.2 of this letter below.
It should be noted that the LLT Units acquired by Lend Lease Shareholders pursuant to the Stapling
Proposal will have an initial CGT cost base equal to the value of the Stapling Dividend, which we have
been advised will be 0.1 cents.
(b) Non-Residents
Non-resident Stapled Security Holders will generally not be assessable on the amount of any income or
gains distributed to them by LLT. However, LLT will be required to withhold tax from such distributions.
The amount to be withheld is dependent on a range of factors including the source of the distributed
amount and the country of residence of the Stapled Security Holder. The withholding tax is a final tax.
Unfranked dividends, interest and royalties distributed by LLT will be subject to withholding tax which is
generally imposed at a rate of 30% for dividends and royalties and 10% for interest. Non-resident Stapled
Security Holders who are residents of a country that has entered into a Double Tax Agreement with Australia
might be entitled to a lower rate of withholding tax.
Distributions from LLT of income other than dividends, interest and royalties should be subject to managed
investment trust withholding tax. LLT will withhold tax from such distributions to the extent they represent
taxable income of LLT other than non-Australian sourced income or capital gains on assets that are not
“taxable Australian property” (“taxable Australian property” mainly includes direct and indirect interest in
land situated in Australia). Any “tax deferred” amount distributed by LLT to non-resident Stapled Security
Holders should not be subject to withholding and should not result in a CGT gain.
The managed investment trust withholding tax rate will depend on the country in which the relevant
non-resident Stapled Security Holder is a resident. For residents of countries with which Australia has an
“effective exchange of information on tax matters” the rate will be 15% for the year ending 30 June 2010
and 7.5% for later income years. Examples of such countries include New Zealand, the United Kingdom
and the United States.
For residents of other countries the managed investment trust withholding rate will be 30%.
13
5
3.4 Dividends from Lend Lease
Tax Report
continued
An Australian resident Stapled Security Holder will include in the Stapled Security Holder’s assessable
income dividends paid to the Stapled Security Holder by Lend Lease. In addition to the amount of
the dividends, the Stapled Security Holder will generally include any franking credits attached to the
dividends in the Stapled Security Holder’s assessable income. Where franking credits are included in a
Stapled Security Holder’s assessable income, the Stapled Security Holder will generally be entitled to a
corresponding tax offset.
Relevantly, to be eligible for the franking credit and tax offset, the Stapled Security Holder must have held
the shares “at risk” for at least 45 days (not including the date of the share’s acquisition or disposal). This rule
should not apply to a Stapled Security Holder if the Stapled Security Holder is an individual whose tax offset
entitlement (on all shares and interests in shares held) does not exceed $5,000 for the income year in which
the franked dividend is paid.
Where the Stapled Security Holder is an individual, a complying superannuation entity or a registered charity
(in certain circumstances), the Stapled Security Holder may be entitled to a refund to the extent that the
franking credits attached to the Stapled Security Holder’s dividends exceed the Stapled Security Holder’s
tax liability for the income year.
Where the Stapled Security Holder is a corporate shareholder, any franked dividends the Stapled Security
Holder receives will generally give rise to a franking credit in the Stapled Security Holder’s franking account.
(a) Australian Residents
(b) Non-Residents
Non-resident Stapled Security Holders should not be assessable on the amount of any dividend received
from Lend Lease. However, Lend Lease will be required to withhold tax from the unfranked component of
dividends paid to a non-resident Stapled Security Holder. The tax withheld will, in the absence of a Double
Tax Agreement, be equal to 30% of the unfranked component of the dividends paid. This rate may be
reduced where the Stapled Security Holder is a resident of a country with which Australia has concluded
a Double Tax Agreement. To the extent the unfranked component of the dividend is declared to have been
paid out of conduit foreign income for Australian taxation purposes then the amount is exempt from dividend
withholding tax.
4 Disposal of Stapled Securities
4.1 General
As a consequence of stapling, each Lend Lease Share and LLT Unit comprising a Stapled Security may not
be traded separately. However, as discussed above at 3.2, each Lend Lease Share and LLT Unit comprising
a Stapled Security is a separate CGT asset. Accordingly, where there is a disposal of a Stapled Security,
there will necessarily be a disposal for CGT purposes of a Lend Lease Share and a LLT Unit.
Where consideration is received in connection with a transaction that relates to more than one CGT asset,
the capital proceeds for each asset is so much of the total consideration as is reasonably attributable to
that asset.
Accordingly, the capital proceeds referable to the disposal of each individual Lend Lease Share and LLT
Unit comprising a Stapled Security will be determined by apportioning the total capital proceeds received
in respect of the disposal of the Stapled Security between the Lend Lease Share and the LLT Unit on a
reasonable basis.
4.2 Australian Residents
Upon disposal of a Stapled Security, a Stapled Security Holder will make a capital gain if:
–– the portion of the consideration reasonably attributable to a LLT Unit exceeds the cost base of the
LLT Unit (the LLT Units acquired by Lend Lease Shareholders pursuant to the Stapling Proposal will
have an initial cost base equal to the value of the Stapling Dividend, which we have been advised will be
0.1 cents); and/or
–– the portion of the consideration reasonably attributable to the Lend Lease Share exceeds the cost base
of the Lend Lease Share.
A Stapled Security Holder will make a capital loss if:
–– the portion of the consideration reasonably attributable to a LLT Unit is less than the reduced cost base
of the LLT Unit; and/or
–– the portion of the consideration reasonably attributable to the Lend Lease Share is less than the reduced
cost base of the Lend Lease Share.
Importantly, capital gains and losses in relation to Lend Lease Shares acquired, or taken to have been
acquired, prior to 20 September 1985 for CGT purposes are disregarded.
In broad terms, the cost base of a Lend Lease Share and LLT Unit is the amount the Stapled Security
Holder paid for them (including incidental costs of acquisition and disposal) less any reductions for the
“tax deferred” component of distributions received.
14
Explanatory Statement Lend Lease Corporation
(a) CGT discount
If a Stapled Security Holder is an individual, a complying superannuation entity or a trustee and acquired
(or is taken to have acquired) for CGT purposes Lend Lease Shares or LLT Units at least 12 months prior
to the date of their disposal (or other eligible CGT event happening in relation to the relevant Security), the
amount of the Stapled Security Holder’s capital gain is reduced by the relevant CGT discount. In calculating
the Stapled Security Holder’s capital gain, the cost base must not be indexed.
In calculating the period of 12 months for CGT purposes, LLT Units acquired pursuant to the Stapling
Proposal are considered to have been acquired on the Effective Date, which is expected to be
20 November 2009.
If a Stapled Security Holder who is an individual or trustee applies the CGT discount method, the Stapled
Security Holder’s taxable capital gain (after offsetting any current year capital losses or carry forward net
capital losses from previous years) will be reduced by one-half (or one-third if the Stapled Security Holder is
a complying superannuation entity).
If the Stapled Security Holder is a company, the CGT discount is not available. The Stapled Security Holder
may be entitled to index the cost base of their Lend Lease Shares (see below).
(b) Indexed cost base
For Lend Lease Shares acquired (or taken to have been acquired) prior to 21 September 1999, for CGT
purposes, Stapled Security Holders (other than those who adopt the CGT discount method, outlined above)
may choose to calculate any capital gain on disposal using a cost base indexed for inflation. If the Stapled
Security Holder makes a capital loss, the reduced cost base is not indexed. The cost base may only be
indexed for inflation up to 30 September 1999.
Stapled Security Holders who choose to calculate the gain on their Lend Lease Shares using an indexed
cost base cannot apply the CGT discount to that capital gain. However, the Stapled Security Holder may
be eligible to apply the CGT discount method in calculating the gain on their LLT Units.
4.3 Non-Residents
There will be no CGT consequences for a non-resident Stapled Security Holder on disposal of their
Stapled Securities.
5 Goods and Services Tax (“GST”)
No GST should generally be payable in respect of the transactions outlined above. As these all involve
dealings with securities, the various supplies will be input taxed (i.e. not subject to GST).
There may be an indirect GST cost for Stapled Security Holders who are registered for GST as input tax
credits will generally not be available for GST charged to the acquirer in respect of supplies relating to the
dealings with these Securities (e.g. legal and other adviser fees).
6 Other Issues
Lend Lease Shareholders would have been invited to provide Lend Lease with their Tax File Number (“TFN”)
or Australian Business Number (“ABN”) when they first acquired their Lend Lease Shares. If no TFN or ABN
were quoted, Lend Lease would have deducted tax from the unfranked component of dividends paid to the
Lend Lease Shareholder at the highest marginal rate of tax (plus Medicare Levy).
Lend Lease Shareholders who participate in the Stapling Proposal will acquire LLT Units.
Specific provisions of the Privacy Act 1988 and the Taxation Administration Act 1953 prevent Lend Lease
from disclosing the TFNs of Lend Lease Shareholders to third parties (which includes LLT). Accordingly, if the
Stapling Proposal proceeds Lend Lease will be unable to disclose the TFNs of Lend Lease Shareholders to
LLT without their consent.
After approval of the Stapling Proposal, LLT will send Stapled Security Holders a form that the Stapled
Security Holder can use to provide their TFN or ABN or exemption to LLT. Stapled Security Holders are not
obliged to provide their TFN or ABN to LLT. However, if a Stapled Security Holder does not provide their TFN
or ABN or exemption to LLT, tax may be withheld at a rate of 46.5% on any gross distributions made by LLT.
However, Stapled Security Holders will be entitled to claim an income tax credit/refund (as applicable) in
respect of the tax withheld in their income tax returns.
Yours sincerely
Michael Moschner
Director
Greenwoods & Freehills
15
6 Additional Information
Overview
This section sets out additional information
relating to:
–– voting on the Stapling Proposal;
–– entitlement to Stapled Securities;
–– ASX listing of the Stapled Securities;
–– ASIC and ASX waivers;
–– how to request additional information; and
–– consents.
Voting on the Stapling Proposal
Overview of the shareholder vote
Lend Lease’s AGM will be held at the City Recital
Hall, Angel Place, Sydney NSW on 12 November
2009 at 10:00am. The Stapling Resolutions will be
considered at the AGM.
Stapling Resolutions
The Stapling Resolutions are set out in the Notice
of Meeting. Lend Lease Shareholders will consider,
as special resolutions:
–– a resolution to amend the existing Lend Lease
constitution in the form tabled at the Lend Lease
AGM to effect the stapling; and
–– a resolution to generally approve the
Stapling Proposal, as described in this
explanatory statement.
The Stapling Resolutions require approval by at least
75% of the votes cast by Lend Lease Shareholders
(either in person at the meeting or by proxy).
If approved, the Lend Lease constitution will be
amended to reflect the changes as summarised in
Annexure A. The full text of the proposed changes
is available by:
–– inspecting it at Lend Lease’s registered office
at Level 4, 30 The Bond, 30 Hickson Road,
Millers Point, New South Wales between 9:00am
and 5:00pm on Business Days until the time of
the AGM;
–– viewing it on Lend Lease’s website at
www.lendlease.com.au; or
–– requesting a copy, free of charge by calling
the Stapling Proposal Information Line on
1800 256 290 (if in Australia) or +61 3 9415 4811
(if outside Australia).
Voting intentions of Lend Lease directors
As at 12 October 2009, the directors of Lend Lease
hold in aggregate 233,092 Lend Lease Shares out
of a total 460,768,608 Lend Lease Shares on issue
(0.05%). The directors support the Stapling Proposal
and intend to vote all of their Lend Lease Shares in
favour of the Stapling Resolutions.
Shareholders entitled to
Stapled Securities
To identify the Lend Lease Shareholders entitled
to participate in the Stapling Proposal, dealings in
Lend Lease Shares will only be recognised if:
–– for dealings effected using CHESS (the computer
system used by ASX to effect the settlement
of the purchase or sale of financial products),
the transferee is registered in Lend Lease’s
register of members as the holder of the relevant
Lend Lease Shares by 5:00pm on the Stapling
Record Date; and
16
Explanatory Statement Lend Lease Corporation
–– for other types of dealings, dealings that occur
before the close of business on the last day of
trading of Lend Lease Shares (expected to be
12 November 2009) and in respect of which
registrable transmission applications or transfers
in registrable form in respect of those dealings
are received on or before 5:00pm on the Stapling
Record Date at Computershare Investor Services
Pty Limited, Level 3, 60 Carrington Street,
Sydney, NSW 2000.
Lend Lease will not accept for registration or
recognise for any purpose any transmission
application or transfer in respect of Lend Lease
Shares received after the times stated above.
ASX listing
An application for admission of LLT Units to
quotation on ASX (as a component of Stapled
Securities comprising Lend Lease Shares and
LLT Units trading together) will be made within
7 days of the date of this document. If the Stapling
Proposal proceeds, the Stapled Securities will be
quoted on ASX. It is expected that normal trading in
Stapled Securities will commence on 27 November
2009. If the Stapling Proposal is not approved,
the application will be withdrawn and only the
Lend Lease Shares will trade on ASX.
ASX reserves the right (but without limiting its
absolute discretion) to remove one or more entities
with stapled securities from the official list if any of
their securities cease to be ‘stapled’ together, or any
equity securities are (without ASX’s approval) issued
by one entity which are not stapled to equivalent
securities in the other entity or entities.
Regulatory consents
ASIC relief
ASIC has granted the RE and Lend Lease
various modifications to, and exemptions from,
the Corporations Act in respect of the Stapling
Proposal and this explanatory statement,
summarised as follows:
–– sections 601FC(1)(c) and 601FD(1)(c) – relief
to allow the RE and its officers to act in the
best interests of Stapled Security Holders as
a whole (rather than just the interests of LLT
Unitholders alone);
–– sections 601FC(1)(e), 601FD(1)(d), 601FD(1)(e) and
601FE(1) – relief to allow the RE (and its directors,
officers and employees) to use information
acquired in its role as responsible entity of LLT to
the advantage of Stapled Security Holders in the
Lend Lease Group as a whole;
–– section 601LC – relief from the related party
transaction provisions to permit the RE to transfer
assets to Lend Lease (and its subsidiaries) or
LLT’s subsidiaries on non-arm’s length terms;
–– Parts 6D.2 and 7.9 – relief to permit Lend Lease
and the RE to apply dividends and distributions
payable in respect of Lend Lease Shares and
LLT Units together, to the acquisition of additional
stapled securities; and
–– section 1012C(6) – relief from the requirement
that Lend Lease issue a product disclosure
statement under Part 7.9.
ASX waivers
Information available from Lend Lease
ASX has granted Lend Lease and the RE the
following in principle waivers (pending LLT’s
admission to the official ASX list) from the operation
of the following Listing Rules as they apply to
Lend Lease and the RE:
Lend Lease will make copies of the following
documents available for inspection at its registered
office at Level 4, 30 The Bond, 30 Hickson Road,
Millers Point New South Wales (between 9:00am
and 5:00pm (Sydney time) on Business Days).
The documents are also available on Lend Lease’s
website at www.lendlease.com.au. A copy of the
following may be requested to be provided free
of charge by contacting the Stapling Proposal
Information Line on 1800 256 290 (in Australia)
or +61 3 9415 4811 (if overseas) between 9:00am
and 5:00pm (Sydney time) Monday to Friday:
–– this explanatory statement;
–– 2009 Lend Lease Annual Report (for the year
ended 30 June 2009);
–– Half Yearly Report (for the half year ended
31 December 2008);
–– proposed amended Lend Lease constitution
(as will apply on implementation of the
Stapling Proposal);
–– LLT constitution; and
–– any continuous disclosure document lodged by
Lend Lease with ASX between the lodgement
of its 2009 Annual Report and the date of this
explanatory statement.
Waivers
–– Listing Rule 1.1 Condition 8 – waiver of the
minimum asset test in Listing Rule 1.3 in relation
to LLT;
–– Listing Rule 2.1 Condition 2 – waiver to permit
the quotation of LLT Units with an issue or sale
price of less than 20 cents;
–– Listing Rule 2.4 – waiver to allow Unstapled Units
which may be held by Lend Lease (or its wholly
owned subsidiaries) to not be quoted;
–– Listing Rule 7.1 – waiver to permit the RE to issue
Unstapled Units to Lend Lease, in excess of
the 15% limit without obtaining LLT Unitholder
approval;
–– Listing Rule 8.10 - waiver to permit the RE to
refuse to register a transfer of a LLT Unit if it is
not accompanied by a transfer of a Lend Lease
Share, and vice versa;
–– Listing Rule 10.1 – waiver from related party
provisions to permit the transfer of assets
between Lend Lease and the RE (and their
wholly owned subsidiaries and sub trusts)
without shareholder/unitholder approval; and
–– Listing Rule 10.11 – waiver from related
party provisions to permit the RE to issue
Unstapled Units to Lend Lease (or its wholly
owned subsidiaries) without the approval of
LLT Unitholders.
Confirmations and approvals
–– Guidance Note 2 – confirmation that ASX will
view the stapling as within the policy outlined
in the Guidance Note and will approve a joint
quotation of Lend Lease and LLT securities on
this basis, and confirmation that ASX is satisfied
to the extent to which the stapling satisfies the
requirements in the Guidance Note;
–– Listing Rule 6.1 – confirmation that the terms
of the Stapled Securities and Unstapled Units
are appropriate and equitable; and
–– Listing Rule 6.2 – confirmation that ASX will
approve the terms of the Unstapled Units
as an additional class of ordinary security.
Continuous disclosure
Additional information available from ASX
Lend Lease is a disclosing entity under the
Corporations Act and is subject to regular reporting
and disclosure obligations under the Corporations
Act and the Listing Rules. These require Lend Lease
to notify ASX of information about specified matters
and events as they occur for the purpose of making
that information available to the market. In particular,
Lend Lease must (subject to limited exceptions)
notify ASX immediately on becoming aware of
information which a reasonable person would
expect to have a material effect on the price or value
of Lend Lease Shares. On quotation of LLT Units on
ASX, LLT will also be a disclosing entity under the
Corporations Act subject to the same disclosure
obligations which apply to Lend Lease. Copies of
the documents filed with ASX may be obtained from
ASX website at www.asx.com.au.
Consents and disclaimers
Greenwoods & Freehills has given and has
not, before the date of issue of this explanatory
statement, withdrawn its consent to:
–– be named in this explanatory statement as
taxation adviser to Lend Lease in relation to the
Stapling Proposal;
–– the inclusion of their Tax Report in section 5
and the references to the Tax Report in the form
and context in which they are included in this
explanatory statement; and
–– the inclusion of other statements in this
explanatory statement which are based on or
referable to statements made in the Tax Report,
or which are based on or referable to other
statements made by Greenwoods & Freehills, in
the form and context in which they are included.
Greenwoods & Freehills:
–– does not make, or purport to make, any
statement in this explanatory statement other
than those statements included in the Tax Report
and as consented to by Greenwoods & Freehills;
and
–– to the maximum extent permitted by law,
expressly disclaims and takes no responsibility
for any part of this explanatory statement
other than as described in this section with
their consent.
17
7Glossary
Definitions
AGM
ASIC
ASX
Business Day
Corporations Act
EBITDA
Effective Date
Greenwoods
& Freehills
Lend Lease
(or Company)
Lend Lease Group
Lend Lease Share
Lend Lease
Shareholder
LLT (or Trust)
LLT Unit
Notice of Meeting
RE
Stapled Security
Stapled Security
Holder
Stapling Proposal
Stapling Record Date
Stapling Resolutions
Tax Report
Unstapled Units
18
the annual general meeting of Lend Lease, to be held at 10:00am on
12 November 2009 at the City Recital Hall, Angel Place, Sydney, NSW.
the Australian Securities & Investments Commission.
ASX Limited (ABN 98 008 624 691).
a day on which banks are open for business in Sydney, other than a Saturday
or Sunday.
Corporations Act 2001 (Cth).
earnings before interest, tax, depreciation and amortisation.
the date on which the Stapling Proposal is implemented, being the day on
which the stapling provisions to be inserted into the Lend Lease constitution
take effect.
Greenwoods & Freehills Pty Ltd (ABN 60 003 146 852).
Lend Lease Corporation Ltd (ABN 32 000 226 228).
the consolidated group comprising Lend Lease and LLT to be formed
on implementation of the Stapling Proposal.
a fully paid ordinary share in Lend Lease.
the holder of a Lend Lease Share.
Lend Lease Trust (ARSN 128 052 595).
a fully paid ordinary unit in LLT, to be issued to Lend Lease Shareholders if the
Stapling Proposal is approved.
the notice to convene the Lend Lease AGM on 12 November 2009 to consider
and if thought fit, pass various resolutions, including the Stapling Resolutions.
the responsible entity of LLT, being Lend Lease Responsible Entity Limited,
(ABN 72 122 883 185).
one Lend Lease Share stapled to one LLT Unit.
the holder of a Stapled Security.
the stapling of Lend Lease Shares to LLT Units to be quoted on ASX as a single
stapled security as described in this explanatory statement.
the record date for determining the entitlements of Lend Lease Shareholders
to Stapled Securities under the Stapling Proposal, being 5:00pm on the fifth
Business Day following the last day of trading of Lend Lease Shares, or such
other date as determined by Lend Lease and announced to ASX.
resolutions 3 and 4 to be considered by Lend Lease Shareholders at the
Lend Lease AGM, which relate to:
–– implementing the Stapling Proposal by inserting stapling provisions into
the Lend Lease constitution; and
–– generally approving the Stapling Proposal, as described in this explanatory
statement.
the taxation report prepared by Greenwoods & Freehills and set out in section 5.
an additional class of units in LLT which may potentially be issued to Lend Lease
(as described above in section 2), subject to necessary ASX and taxation
approvals.
Explanatory Statement Lend Lease Corporation
Interpretation
Headings and boldings are inserted for convenience
and do not affect the interpretation of this
explanatory statement and unless the contrary
intention appears:
(a)a reference to a statute, ordinance, code or other
law includes regulations and other instruments
under it and consolidations, amendments, reenactments or replacements of any of them;
(b)the singular includes the plural and vice versa;
(c)the word person includes an individual, a firm,
a body corporate, an unincorporated association
or an authority;
(d)mentioning anything after includes, including,
for example, or similar expressions, does not limit
what else might be included;
(e)a reference to a person includes a reference
to the person’s executors, administrators,
successors, substitutes (including persons taking
by novation) and assigns;
(f) a reference to time is a reference to the time in
Sydney, New South Wales;
(g)a reference to any thing (including any amount) is
a reference to the whole and each part of it and
a reference to a group of persons is a reference
to any one or more of them;
(h)a reference to a section, part, clause, annexure,
exhibit or schedule is a reference to a section,
part and clause of, and an annexure, exhibit
and schedule to, this explanatory statement; and
(i) a reference to $, A$ or cents is to Australian
currency unless denominated otherwise.
19
Annexure ASummary of proposed amendments to the
Lend Lease constitution
Insertion of new stapling provisions
It is proposed that the following provisions are
added to the Lend Lease constitution to facilitate
the stapling of Lend Lease Shares to LLT Units.
If the Stapling Resolutions are not approved, the
Lend Lease constitution will remain unchanged.
Power to staple
The directors may cause the stapling of the
Lend Lease Shares to other securities (which
includes the LLT Units).
Stapling provisions paramount
If there is an inconsistency between any provision
of the Lend Lease constitution relating to stapling
and any other provision, the provision relating to
stapling prevails.
Mechanics of stapling
While stapling applies:
–– subject to the Corporations Act, while
Lend Lease is admitted to an uncertificated
trading system, a joint holding statement may
be issued to evidence the holding of Stapled
Securities;
–– the number of issued Lend Lease Shares at
any time must equal the number of issued
attached securities, divided by the relevant
“corresponding number” (as defined in the
Lend Lease constitution);
–– Lend Lease must not issue Lend Lease Shares
unless each of those Lend Lease Shares will be
stapled to the corresponding number of each
attached security;
–– Lend Lease and Lend Lease Shareholders must
not do anything that would result in a Lend Lease
Share no longer being part of a Stapled Security.
In particular:
–– Lend Lease must not offer a Lend Lease
Share for subscription or sale (including by
way of offering options) unless an offer is
made at the same time and to the same
person for the corresponding number of each
attached security for issue or sale;
–– an offer of a Lend Lease Share for
subscription or sale (including by way of
offering options) must require the offeree
to subscribe for or buy the corresponding
number of each attached security;
–– a Lend Lease Shareholder must not sell a
Lend Lease Share to any person unless the
corresponding number of attached securities
is also sold to the same person at the
same time;
20
Explanatory Statement Lend Lease Corporation
–– Lend Lease must not issue or sell a
Lend Lease Share to any person unless the
corresponding number of each attached
security is also issued or sold to the same
person at the same time;
–– Lend Lease must not consolidate, split,
subdivide, cancel or otherwise reorganise
any Lend Lease Shares unless at the same
time there is a corresponding consolidation,
subdivision, cancellation or other
re‑organisation of the attached securities;
–– Lend Lease must not forfeit a Lend Lease
Share unless the corresponding number of
attached securities is also forfeited;
–– Lend Lease must not register the transmission
or transfer of Lend Lease Shares unless a
corresponding number of each attached
security is also transmitted or transferred; and
–– Lend Lease must not issue an option unless
an option over each attached security is also
issued to the same person at the same time
and each option is stapled to each other
option immediately on issue.
Unstapling date
Lend Lease may, following approval by special
resolution of Lend Lease Shareholders and the
members of each stapled entity, determine a date
on which the stapling provisions of the Lend Lease
constitution will cease to apply. Stapling also ceases
to apply on the winding up of a stapled entity. This
provision will not prevent Lend Lease subsequently
determining that the stapling provisions should
recommence.
Transfer of Stapled Securities
While stapling applies, a transfer of Lend Lease
Shares forming part of Stapled Securities will only
be accepted as a proper transfer in registrable form
if the transfer relates to or is accompanied by a
transfer of the corresponding number of attached
securities from the same transferor in favour of the
same transferee. Otherwise, if not so accompanied,
Lend Lease will be authorised to transfer those
attached securities as agent for the transferor.
Lend Lease is also appointed as agent to:
–– transfer any attached securities with any forfeited
Lend Lease Shares; and
–– arrange and apply for the issue to Lend Lease
Shareholders of securities in a stapled entity
for the purposes of distributing a dividend in
the form of Stapled Securities.
Application of capital reduction funds
to capitalise stapled entity
Lend Lease may by ordinary resolution reduce its
share capital by equal reduction and the Lend Lease
Shareholders may by ordinary resolution authorise
Lend Lease as agent for and in the name of each
shareholder, to apply the amount of the reduction
that the shareholder is otherwise entitled to, as
additional capital to a stapled entity pro rata in
proportion to the number of securities held by that
shareholder in that stapled entity.
Stapled Security register
The Lend Lease directors must cause a
Stapled Security register to be maintained.
Variation of stapling provisions
The consent of each other stapled entity must
be sought prior to amending the Lend Lease
constitution in a way which directly affects the
terms on which the Lend Lease Shares are stapled
or which removes a restriction on the transfer of
Lend Lease Shares (where that same restriction
also applies to the attached securities), unless
the restriction is simultaneously removed for the
attached securities.
Modification of existing constitution
It is also proposed that the following provisions
of the Lend Lease constitution will be modified
to give effect to the Stapling Proposal.
Restricted securities
While stapling applies, if a restriction is placed on
the Stapled Securities, the Lend Lease Shares
which are a component of the Stapled Securities
will be a restricted security.
Disposal of shares
Where a forfeited or surrendered share is sold,
reissued or otherwise disposed of or where a
share on which the company has a lien is sold,
the directors of Lend Lease (or its nominee) may:
–– receive the purchase money or consideration
given for the shares and any money payable
in respect of the forfeited attached securities;
–– effect and execute a transfer of the shares and
attached securities; and
–– register as the holder of the shares and attached
securities the person to whom the shares and
attached securities are disposed.
Lend Lease (or its nominee) must account to
each stapled entity for the portion of the purchase
money or consideration received in respect of the
attached securities.
Power to decline registration of transfers
The directors may decline to register or prevent
registration of an instrument of transfer of shares
if, except for a proper ASTC transfer, the refusal to
register is permitted or required under the terms of
issue of the shares or attached securities.
Meetings
While stapling applies, the directors, auditors and
representatives of each stapled entity may attend
any meeting of a stapled entity. The constitution
will also provide that the form of proxy used may
be the same form as the holder uses in respect of
attached securities. Further, meetings of Lend Lease
Shareholders may be held in conjunction with the
meetings of the holders of the attached securities.
Powers and duties of directors
While stapling applies, an instalment or call on a
partly paid Lend Lease Share will not be regarded
as having been properly paid unless any amount
payable in relation to a partly paid attached security
is also paid at the same time.
The directors are entitled to have regard to the fact
that once Lend Lease and LLT are stapled, the
intention is that the economic and other interests
of Lend Lease and LLT are aligned. Therefore, in
exercising their powers or discretions, the directors
may have regard to both the interests of Lend Lease
Shareholders and LLT Unitholders.
Forfeiture of shares
Notice of winding up
A forfeited, partly paid share (other than a
Lend Lease Share) may be sold, re-issued or
otherwise disposed of to whom and on such
terms as the directors think fit. A forfeited, partly
paid Lend Lease Share may be sold, reissued or
otherwise disposed of as a fully paid Lend Lease
Share at a price determined by the directors.
If an attached security is forfeited, Lend Lease must
forfeit the Lend Lease Share to which it is stapled.
On or before commencement of a winding up of
Lend Lease, the liquidator must give notice to each
stapled entity that Lend Lease is to be wound up.
Calls on partly paid Lend Lease Shares
Surrender of shares
While stapling applies, an ordinary share may not
be surrendered unless each attached security is
also surrendered.
21
Annexure BSummary of LLT constitution
LLT Units are governed by the terms of LLT’s
constitution, the general law relating to trusts,
the Corporations Act, ASIC rulings and the Listing
Rules. In particular, registers of members, meetings
of unitholders (including applicable voting rights),
financial reporting and auditing, amendment to
the constitution and removal of the responsible
entity are primarily regulated by the Corporations
Act. The information below summarises the main
provisions of LLT’s constitution.
Interests of unitholders
Division into units
Interests in the trust are divided into units. No unit
confers an interest in a particular part of the trust.
A holder may not interfere or seek to interfere with
the rights, powers, authority or discretion of the
trustee; claim or exercise any right in respect of any
asset of the fund; or require that any asset of the
fund be transferred to the holder.
Classes of units
The trustee may at any time issue units in two or
more separate classes with rights, obligations
and restrictions as it determines. The trustee
may convert any units from one class to another
class. The trustee may issue options and may
consolidate or split units. The trustee may offer units
for subscription as partly paid units. Failure to pay
instalments on any partly paid units may result in
forfeiture of those units.
Liability
The liability of each holder in its capacity as such
is limited to its investment in the trust. A holder is
not required to indemnify the trustee or a creditor
of the trustee against any liability of the trustee in
respect of the trust. The recourse of the trustee
and any creditor of the trustee is limited to the
assets of the fund.
Lien
The trustee has a first and paramount lien over
units for any amounts owing to the trustee
in respect of units registered in the name of
the holder, including any fees or unpaid calls.
The lien extends to distributions from time to
time payable in respect of the units.
22
Explanatory Statement Lend Lease Corporation
Power to issue units
Capital reallocation
The trustee may issue units (capital allocation units):
–– to the holders of stapled securities if the stapled
entity (or, where the stapled entity is a trust,
the trustee of the stapled entity) makes an
application for capital allocation units as the
agent for the holders of stapled securities and
applies a distribution out of the stapled entity
towards the amount required for those capital
allocation units; or
–– to a stapled entity if the trustee is satisfied that
immediately following the issue of the capital
allocation units, they will be distributed pro rata
to the holders of stapled securities,
so long as immediately following the issue of the
capital allocation units, the trustee consolidates the
capital allocation units with all other units on issue
such that the total number of units then on issue is
equal to the number of units on issue prior to the
capital reallocation issue.
Other issues
The trustee may otherwise issue units at any time
subject to the detailed pricing and other provisions
of the trust deed and the Corporations Act.
Trustee powers
General powers
The trustee has all the powers that is possible
to confer on a trustee, and that are incidental to
ownership of the fund as though it were the absolute
and beneficial owner of the fund.
While stapling applies, the trustee may have regard
to the fact that the trust is operating as part of a
stapled group with common members with the
intention that the interest of the trust and the stapled
entities is aligned. Accordingly, in exercising its
powers, the trustee may have regard to the interests
of unitholders as beneficiaries of the trust and
holders of attached securities.
Delegation
The trustee may appoint a person (including an
associate) as its delegate, attorney or agent to
exercise its powers and performance obligations.
The trustee may appoint a person to acquire, hold
title to, dispose of or otherwise deal with any asset
of the fund on behalf of the trustee.
Buy-back of units
While listed, the trust may buy back its units.
Immediately after registration of a transfer of a unit
or stapled security (as the case may be) following
a buy-back, the units are cancelled. Where a unit
forms part of a stapled security, the trustee may only
buy back and cancel units if the securities to which
those units are stapled are also the subject of a
contemporaneous buy-back and cancellation.
The trustee or its nominee may set a range of
purchase prices at which buy-backs can be made
provided that the maximum purchase price does
not exceed 5% more than the average market price
for the unit or stapled security (as the case may be)
sold on ASX during the last 5 days on which sales
in units or stapled securities (as the case may be)
were recorded.
Limitation of liability
The trustee and each director and officer of the
trustee are not personally liable to a holder or any
other person in connection with office. Subject to
the Corporations Act, the trustee will only be liable
to the extent to which it is entitled to be and is in fact
indemnified out of the assets of the fund actually
vested in the trustee in respect of the trust.
Indemnities
The trustee is entitled to be indemnified out of the
trust fund for all liabilities and expenses in the proper
performance of its duties.
Trustee may rely on advice
The trustee may act upon the opinion or advice of
professional advisors and the trustee will not liable
for anything done, suffered or omitted by it in good
faith in reliance upon such opinion or advice.
Interested dealings by trustee
The trustee or an officer or employee or associate
of the trustee may hold units; act in any fiduciary,
vicarious or professional capacity; have an interest
in or enter into any transaction with the trustee or an
associate, any unitholders or any other person; or
hold or deal in or have any other interest in an asset
of the fund and may retain and is not required to
account for any resultant benefits.
Income and distributions
Determination & distribution of income
The trustee is to determine whether any item is
income or capital. The trustee may at any time
distribute pro-rata to unitholders income or capital
out of the fund. In making determinations and
distributing income, the trustee does not have
to take into account accounting standards and
generally accepted accounting principles and
practices which apply to trusts.
Distribution entitlement
Each unitholder’s distribution entitlement
is determined in accordance with the
following formula:
DE = DA x UH ÷ UI
Where DE is the distribution entitlement; DA is the
“distributable amount”; UH is the aggregate paid-up
proportion of each unit holding of the unitholder;
and UI is the aggregate paid-up proportion of all
units on issue in the trust which are entitled to a
share of the DA.
The “distributable amount” is determined in
accordance with the following formula:
DA = I + C – R
Where DA is the distributable amount; I is the
operating income of the fund; C is any additional
amount (including capital) that the trustee has
determined to be distributable; and R is that part
of the operating income of the fund which has
been distributed during the relevant period and
any amount of income and gains which has been
included in the redemption price of units redeemed
during the relevant period. Operating income is the
gross income of the trust less expenses and realised
losses and less any other amount the trustee
considers prudent to allow for contingencies or
future expenses.
Distribution of entitlement
The trustee must pay to each unitholder its
distribution entitlement on or before the distribution
date. Persons who are unitholders on the
distribution calculation date for a period have
an absolute, vested and indefeasible interest in
the relevant distributable amount. The trustee
may satisfy its obligations to pay a unitholder’s
distribution entitlement by applying for and paying
up an issue of securities in a stapled entity as an
agent of the unitholder or by transferring any asset of
the fund to that unitholder. If the trustee exercises its
power to transfer any asset of the fund to a holder,
the trustee may in its absolute discretion require that
the holder receiving the asset or distribution pay
some or all of the GST on any supply arising from
the distribution and the holder must then indemnify
the trustee against that GST or itself pay some of
the GST and recover the amount out of the fund.
23
Annexure B
Summary
of LLT
constitution
continued
Remuneration of trustee
Transfer of stapled securities
The trustee is not entitled to a fee but can recover
its costs for the management of the trust.
A transfer of a unit forming part of a stapled security
will only be effective if the transfer relates to or is
accompanied by a transfer of a corresponding
number of each attached security from the same
transferor in favour of the same transferee. A transfer
of a unit which is not accompanied by a transfer
of the corresponding number of each attached
security will authorise the trustee as agent for the
transferor to effect a transfer of the corresponding
number of each attached security. A transfer of any
attached security to which a unit is stapled which
is not accompanied by a transfer of the unit will
authorise the trustee as agent of the transferor to
effect the transfer of that unit.
Transfers
While the trust is listed, the trustee may not do
anything which may prevent, delay or in any way
interfere with the registration of a transfer of units.
Retirement or removal of the trustee
The trustee may be replaced in accordance with the
Corporations Act.
Winding up
Procedure on winding up
In winding up the trust, the trustee must: realise the
assets of the fund; pay any amount due to it; pay
all Costs of the trustee in its capacity as trustee of
the trust; and subject to any special rights attached
to units, distribute the net proceeds of realisation
among the unitholders pro-rata in accordance with
the paid-up proportion of units held. The trustee
may distribute an asset of the fund to a unitholder in
specie. The trustee is entitled to be paid all its Costs
from the proceeds of realisation of the trust before
any payment is made to the unitholders.
Proposals
Appointment of trustee as agent
and attorney
The trustee is irrevocably appointed as agent
and attorney of each unitholder to execute all
documents and do all things which it reasonably
considers are necessary or desirable to be executed
or done on behalf of the unitholder to effect a
proposal approved by unitholders at a meeting
including applying for securities in the name of the
unitholder and accepting transfers of securities for
the unitholder.
Stapling
Power to staple
The trustee may cause the stapling of any security
to the units and may cause the stapling of further
securities to the units.
Distributions in specie
For the purposes of stapling, the trustee may
make an in specie distribution of securities to
all unitholders.
Units to be stapled
The number of units issued must correspond to
the number of attached securities. The trustee
must not issue units unless satisfied that each of
those units will be stapled to the corresponding
number of each attached security to form a stapled
security. The trustee and the unitholders must
not do any act which would result in any unit no
longer being a component of a stapled security.
In particular, a unitholder must not sell units to any
person unless the corresponding number of each
attached security is also sold to the same person
at the same time, and the trustee must not register
the transmission or transfer of units unless a
corresponding number of each attached security
is also transmitted or transferred.
24
Explanatory Statement Lend Lease Corporation
Unstapling date
The trustee may determine that the stapling
provisions will cease to apply, subject to approval
by special resolution of the unitholders and the
members of each stapled entity respectively.
Variation of stapling provisions
The consent of each other stapled entity must be
obtained to any amendment of the constitution
which directly affects the terms on which units are
stapled or removes any restriction on the transfer
of a stapled unit if that restriction also exists for all
other attached securities unless that restriction is
simultaneously removed for all attached securities.
Unstapled units
The trustee may at any time, subject to necessary
approvals, issue Unstapled Units (being units which
are issued to a stapled entity or any entity wholly
owned by the stapled entity). These may be issued
at an issue price equal to the current unit value at
the time of issue and on terms of issue that may
allow for those Unstapled Units to be redeemed
at the option of the trustee or the Unstapled Unit
holder. However, the Unstapled Units cannot be
stapled to the stapled entity’s securities. Also prior
to the date on which the stapled entity (or any
wholly owned subsidiary of the stapled entity)
becomes the holder of the Unstapled Units, the
prospective holder must enter into an enforceable
undertaking to the trustee that it will vote those
units on resolutions considered by Stapled Security
Holders, in the same proportions that the Stapled
Securities are voted.
Contents
Important
Notices
Chairman’s letter
Key shareholder actions
Important dates
1 Overview of the Stapling Proposal
2 Rationale for the Stapling Proposal
3 Financial impacts of the Stapling Proposal
4 Mechanics of the Stapling Proposal
5 Tax Report
6 Additional Information
7 Glossary
Annexure A: Summary of proposed amendments
to the Lend Lease constitution
Annexure B: Summary of LLT constitution
What is this document?
This document is an explanatory statement issued by Lend Lease
Corporation Limited (ABN 32 000 226 228) (Lend Lease) dated
12 October 2009 and provides shareholders of Lend Lease with
details of the structure of Lend Lease and Lend Lease Trust
(ARSN 128 052 595) (the Lend Lease Group) following the
stapling of Lend Lease Shares to units in the Lend Lease Trust
(LLT) (if approved). It also sets out details of the rights and liabilities
attaching to LLT Units.
A product disclosure statement in relation to the Stapling
Proposal will not be issued in Australia and this document will
not be lodged or registered with any regulatory body in Australia or
any other country. As detailed in section 6 “Regulatory Consents”,
ASIC has provided relief to Lend Lease from the requirement that
this explanatory statement be issued as a product disclosure
statement. Neither ASIC nor ASX takes any responsibility for
this document or the merits of the Stapling Proposal.
LLT is a managed investment schemed registered under
Chapter 5C of the Corporations Act. Lend Lease Responsible
Entity Limited (ABN 72 122 883 185) (RE) is the responsible
entity of LLT.
This document also contains a tax report by Greenwoods
& Freehills Pty Ltd (see section 5).
No investment advice
The information outlined in this explanatory statement does
not constitute financial product advice and has been prepared
without reference to your particular investment objectives, financial
situation, taxation position and particular needs. It is important that
you read this explanatory statement in its entirety before making
any decision on how to vote on the Stapling Proposal. If you
are in any doubt in relation to these matters, you should consult
your investment, financial, taxation or other professional adviser.
Stapling Proposal Information Line
Within Australia: 1800 256 290
Outside Australia: +61 3 9415 4811
Lease Corporation Limited registered office
Level 4, 30 The Bond
30 Hickson Road
Millers Point NSW 2000
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Defined terms
Capitalised terms used in this explanatory statement are defined
in the Glossary in section 7. The Glossary also sets out some
rules of interpretation which apply to this explanatory statement.
Forward looking statements
Statements of intent in relation to future events should not be
taken to be a forecast or prediction that those events will occur.
Actual events or results may differ materially from the events or
results expressed or implied in any forward looking statement
and deviations are both normal and to be expected. Lend Lease
and the RE, their respective officers, and any person named
in this explanatory statement or involved in the preparation of
this explanatory statement do not make any representation
or warranty (either express or implied) as to the accuracy or
likelihood of fulfilment of any forward looking statement, or any
events or results expressed or implied in any forward looking
statement. Accordingly, you are cautioned not to place undue
reliance on those statements.
Any forward looking statements in this explanatory
statement reflect views held by Lend Lease at the date
of this explanatory statement.
Notice to Lend Lease Shareholders in jurisdictions
other than Australia
The LLT Units have not been registered under the US Securities
Act of 1933, as amended (the Securities Act), or any applicable
United States securities laws. Such securities may not be offered
or sold in the United States, or for the account or benefit of, a
US Person (as defined in Regulation S under the Securities Act)
unless such securities have been registered under the Securities
Act or an exemption from the registration requirements of the
Securities Act and applicable US State securities laws is available.
Lend Lease Shareholders who are subject to taxation outside
Australia should consult their tax adviser as to the applicable tax
consequences of holding Stapled Securities and the transactions
described in this explanatory statement.
Share registry
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney, NSW 2000
Explanatory
Statement
In relation to a proposal to staple the shares
in Lend Lease Corporation Limited to the
units in Lend Lease Trust.
This document is issued by Lend Lease
Corporation Limited ABN 32 000 226 228.
Lend Lease