As noted above, State consent is not required for Permitted Share Capital Dealings. Permitted Share Capital Dealings are identified categories of Share Capital Dealings that are pre-agreed by the State and Project Co at Financial Close. The categories of dealings will be specific to the Successful Respondent's equity capital structure and Equity Investors, and so will be based on the Permitted Share Capital Dealing Schedule bid by the Successful Respondent as part of its Proposal.
The State will generally only accept a limited number of Permitted Share Capital Dealings, which do not result in a Change in Control or ultimate equity investments. Typically the categories will therefore be limited to internal restructures or issues of shares/units that do not affect the ultimate ownership structure.
Although State consent is not required for Permitted Share Capital Dealings, Project Co must provide prior notice of any such proposed dealings. This enables the State to confirm that it agrees with Project Co's assessment that the relevant Share Capital Dealing is indeed a Permitted Share Capital Dealing.
The State recognises that Share Capital Dealings constituted by on-market acquisitions of listed shares or units may be outside the control of the Consortium Members. Accordingly, where such an acquisition would otherwise require the State's prior consent, the State agrees that Project Co may seek the consent immediately after the acquisition. If the State does not consent to the Share Capital Dealing, Project Co will have an additional 60 Business Days to procure that the person acquiring Control ceases to do so.
The State recognises that, in practical terms, Project Co may not have any legal or commercial basis to require a third party acquirer to reverse its acquisition. In such circumstances the 60 Business Day period effectively operates as an additional cure period to remedy or overcome the consequences of a default. If Project Co cannot achieve an outcome satisfactory to the State during this period, the usual default and termination provisions will apply. The State considers the additional remedy period to be a reasonable balance between the risk to Project Co of a default arising due to circumstances outside its control, and the fact that the State cannot accept a position whereby Project Co is controlled by persons that are unacceptable to the State. The fact that such acquisition is not approved by the State and can lead to a Default Termination Event will serve as a commercial disincentive for parties to acquire Project Co where there is a real risk of such ex post facto consent being obtained.