Export Development Canada Exercise of Certain Powers Regulations

4 (1) Subject to subsection (2), the Corporation may acquire an equity interest in an entity.

(2) Subject to subsections (4) and (5), an acquisition by the Corporation requires the approval of the Minister and the Minister of Finance, if the value of the equity interest to be acquired by the Corporation together with the value of any equity interest already held by the Corporation in that entity exceeds 25 per cent of the value of all equity interests in the entity at the time of acquisition by the Corporation.

(3) For the purposes of subsection (2), the value of all equity interests in the entity at the time of acquisition by the Corporation

• (a) is to be calculated on a fully diluted basis and shall include the equity interest being acquired by the Corporation or by any other person and any equity interest that the Corporation or any other person is obligated to acquire; and

• (b) is to be determined in accordance with

  • (i) the most recent audited financial statements of the entity, if available,

  • (ii) any agreements between the entity and the Corporation that relate to the acquisition, and

  • (iii) any agreements among persons who have acquired, are acquiring or are obligated to acquire an equity interest in the entity and any agreements between any of them and the entity that relate to the acquisition of their respective equity interests in the entity.

(4) Subsection (2) does not apply to an acquisition resulting from a restructuring, reorganization or other similar workout arrangement involving an entity in which the Corporation already holds an equity interest or to which it is a creditor.

(5) Subsection (2) does not apply where the equity interest is acquired by reason of

• (a) dividend or other in-kind distribution;

• (b) the exchange or substitution, as a result of an amalgamation, merger or other similar action, of an equity interest already held by the Corporation for an equity interest in an entity that is the result of the action; or

• (c) the settlement, in whole or in part,

  • (i) of a debt held by the Corporation in connection with any arrangement that has the effect of extending credit or providing an undertaking to pay money, or

  • (ii) a debt or claim in respect of which the Corporation has made a payment pursuant to an arrangement that has the effect of providing any insurance, reinsurance, indemnity or guarantee.