Relief from the requirements to file annual certificates and interim certificates under Multilateral Instrument 52-109 granted to a wholly-owned subsidiary of a reporting issuer parent -- Subsidiary has issued debentures that are fully and unconditionally guaranteed by the parent -- Subsidiary is not required to file financial statements, MD&A or AIF - Relief granted subject to conditions, including the parent filing certain continuous disclosure documents on the subsidiary's SEDAR profile.
National Instrument 51-102 Continuous Disclosure Obligations
Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings
April 19, 2005
IN THE MATTER OF
THE SECURITIES ACT R.S.O. 1990,
CHAPTER S.5, AS AMENDED (the "ACT")
IN THE MATTER OF
LOBLAW COMPANIES LIMITED
(Section 4.5 of Multilateral Instrument 52-109 Certification of Disclosure
in Issuers' Annual and Interim Filings)
UPON the Director having received an application (the "Application") from Provigo Inc. ("Provigo") and Loblaw Companies Limited ("Loblaw") for an order pursuant to section 4.5 of Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("MI 52-109") that the requirements to file annual certificates ("Annual Certificates") in accordance with section 2.1 of MI 52-109 and interim certificates ("Interim Certificates") in accordance with section 3.1 of MI 52-109 (collectively, the "Certification Filing Requirements") shall not apply to Provigo;
AND UPON considering the Application and the recommendation of the staff of the Ontario Securities Commission (the "Commission");
AND UPON Loblaw and Provigo having represented to the Director as follows:
1. Provigo was continued on June 1, 1982 under the Companies Act (Québec). Its head office is located at 400 Avenue Ste. Croix, St. Laurent, Québec H4N 3L4. Provigo is engaged, through its subsidiaries, in food retailing in the Province of Québec.
2. Provigo is authorized to issue an unlimited number of common shares and an unlimited number of preference shares, issuable in series. Provigo has issued 147,878,277 common shares (the "Common Shares"), 100% of which are held, directly or indirectly, by Loblaw.
3. Provigo is a reporting issuer in the provinces of Ontario, Québec and British Columbia and is currently a "venture issuer" within the meaning of National Instrument 51-102 -- Continuous Disclosure Obligations ("NI 51-102").
4. Provigo currently has outstanding $125,000,000 aggregate principal amount of 8.70% Debenture Series 1996 due May 23, 2006 (the "Debentures").
5. Loblaw has fully and unconditionally guaranteed the Debentures pursuant to an Agreement of Guarantee between Loblaw and CIBC Mellon Trust Company, the trustee for the Debentures, dated September 22, 1999.
6. The Common Shares and the Debentures are the only outstanding securities of Provigo.
7. Provigo and Loblaw do not intend for Provigo to issue any securities to the public in addition to the Debentures.
8. Loblaw was incorporated on January 18, 1956 and continued under the Canada Business Corporations Act by certificate of continuance dated May 7, 1980. Its principal executive office is located at 22 St. Clair Avenue East, Suite 1500, Toronto, Ontario, M4T 2S8. Loblaw, through its subsidiaries, is engaged in food retailing across Canada.
9. Loblaw's common shares are listed and posted for trading on the Toronto Stock Exchange.
10. Loblaw is a reporting issuer in all the provinces and territories of Canada and is not, to its knowledge, in default of its reporting issuer obligations under the securities legislation of any of these jurisdictions.
11. Pursuant to an order of the Commission dated September 22, 1999 (the "Previous Order"), Provigo is exempt from the requirements of (i) subsection 77(1) of the Act to prepare and file with the Commission unaudited interim financial statements, (ii) section 78 of the Act to prepare and file with the Commission its audited annual financial statements, and (iii) subsection 81(2) of the Act and section 5 of the Regulation with respect to the annual filing of Form 28, subject to certain conditions.
12. On December 23, 1999, staff of the Commission issued a "no-action" letter (the "No-Action Letter" and, together with the Previous Order, the "Existing Exemptions") to Provigo which stated that so long as Loblaw continues to hold, directly or indirectly, all of the common shares of Provigo, they would not initiate any regulatory action by reason of Provigo not filing an annual information form ("AIF") or management's discussion and analysis ("MD&A").
13. Provigo delivered a notice dated July 12, 2004 to the Commission under subsection 13.2(2) of NI 51-102 stating that it intends to rely on the Previous Order and the No-Action Letter to the same extent and on the same conditions as contained therein.
14. Since the respective dates of issuance of the Previous Order and the No-Action Letter, there have been no material changes to the representations of either Provigo or Loblaw made with respect to Previous Order or the No-Action Letter, as applicable.
15. The Certification Filing Requirements are intended to provide investors with assurance on the adequacy of (i) an issuer's interim financial statements and interim MD&A (collectively, the "Interim Filings"); (ii) an issuer's AIF, annual financial statements and annual MD&A (collectively, the "Annual Filings"); and (iii) disclosure controls and procedures and internal control over financial reporting of the issuer.
16. As Provigo is exempt from the requirements to file interim and annual financial statements pursuant to NI 51-102, and is not required to file interim or annual MD&A or an AIF, it would not be meaningful or relevant for Provigo to file its own Annual Certificates and Interim Certificates.
17. As Provigo is a consolidated subsidiary of Loblaw, its financial condition, results of operations and cash flows are fully reflected in Loblaw's Annual Filings and Interim Filings. Loblaw will continue to comply with the continuous disclosure requirements under NI 51-102 and the Certification Filing Requirements.
AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;
THE DECISION of the Director, pursuant to section 4.5 of MI 52-109, is that the Certification Filing Requirements shall not apply to Provigo provided that:
(a) Provigo is not required to, and does not, file its own Interim Filings and Annual Filings;
(b) Loblaw files, in electronic format under Provigo's SEDAR profile, the following documents at the same time as such documents are required to be filed by Loblaw under its own SEDAR profile:
(i) Annual Filings of Loblaw;
(ii) Interim Filings of Loblaw;
(iii) Annual Certificates of Loblaw;
(iv) Interim Certificates of Loblaw; and
(c) Provigo qualifies for the relief contemplated by, and is in compliance with, the requirements and conditions set out in the Existing Exemptions.