Aquiline treads carefully

By Duncan Bridgeman

Friday 19th March 2004

Investment company Aquiline Holdings expects to get approval for a prospectus in the next few days, despite falling foul of the Securities Commission over its previous share offers.

The company, headed by former Air New Zealand chief executive Jim Scott, is seeking to raise $90 million to improve liquidity and fund future acquisitions.

Scott said yesterday he was confident of getting clearance, despite this week having to address concerns from the Securities Commission that the company had in the past offered shares without a registered prospectus.

Aquiline rejected the suggestion but acknowledged the commission's concern and has agreed to replace its existing shares with new shares and give shareholders the option of a refund. The company, which has 217 shareholders, said its offer of shares on its website did not constitute an offer to the public under section 3 of the Securities Act.

Commission general counsel Liam Mason said Aquiline had been under investigation since December last year after media publicity about the company.

"We've got concerns there is some doubt as to whether some of those shares might in fact have been offered to members of the public and the company has acknowledged that."

A company can, under s3 of the act, invite "qualified parties" such as friends, relatives or close business associates to take up shares but not members of the public at large.

Scott said he was unsure why Aquiline had been targeted because he said the company had used the same vetting process since 1998. "The only thing that's happened in the past couple of years is that we have now got a website with a lot of information on it," he said.

Aquiline is proposing to replace its existing shares with new shares issued as a result of an amalgamation. The proposal has been sent to shareholders together with a statement setting out the minority buyout rights of shareholders under
s110 of the Companies Act.

If a shareholder decides to take up the refund option, the firm must make the refund, with interest, within 15 working days of the closing date of the offer.

Aquiline Holdings specialises in investing in small-to-medium-sized businesses involved in importing, manufacturing and distribution.

The company is privately owned and is strongly against listing on conventional capital markets. Instead of the market setting the share price, Aquiline's directors do it.

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