AusNet Services (AST) 2015 EGM Report

Company/ASX Code : AusNet Services (AST)
Venue :
Melbourne Convention Centre Melbourne, Victoria 3000
Monitor : Mr Tom Rado
AGM Details / NoM : Monday 26th October, 2015
# of Attendees : 26 shareholders/proxyholders plus 17 visitors
# Holdings represented by ASA : 57
Value of Proxies : $1.95 million
# Shares Represented by ASA : 1.35 million
Market Capitalisation : $5.07 billion

Fixing up part of the unintended consequences of the inability to issue shares for DRP

AusNet Services Ltd (previously “SP AusNet”) provides electricity transmission for the whole of Victoria and electricity & gas distribution for part of Victoria. 

This EGM was convened specifically to gain approval to issue shares pursuant to their existing Dividend Reinvestment Plan (DRP).   It was approved by a majority of 99.5% in favour.   The ASA supported this resolution.

The background of this is as follows:-

AusNet Services Ltd's constitution (clause 3.10) does not allow the issue of shares unless prior approval is obtained at a members’ meeting. This is to comply with the Singaporean Listing Rules. Although ASX Listing Rule 7.1 allows a company to issue up to 15% of issued capital without prior approval in any 12 month period, the Singaporean Listing Rules do not.

This approval is for an 18 month period and has been sought and obtained at each of AusNet's AGMs since listing other than its July 2015 AGM. At the AGM held on 23rd July, a resolution (Item 7) to allow the company to issue shares in connection with the DRP, rights issues and other purposes was opposed by its two major shareholders (Singapore Power and State Grid Corp of China, holding a combined 51% of the votes) and was not passed. The reason given by Singapore Power was their opposition to a major capital raising, such as rights issues. 

At this meeting the resolution was specific to the dividend reinvestment programme and was supported by the two major shareholders

The Chairman (Mr Ng Kee Choe, a nominee of Singapore Power) announced that, after a decade as Chair, he will be stepping down.  He said that the board will likely choose an independent Chair.  We expressed our gratitude to our cordial relationship and commended his chairmanship over the last 9 years, especially of the last AGM held on 23 July where the unexpected dramatic defeat of a number of key resolutions occurred.  We also welcomed that the Chair will be ‘independent’, and also added that it should preferably be a person normally residing in Victoria.