NZX Announcement: Powerco Limited Takeover Offer

27 October 2004
NZX Announcement
Powerco Limited Takeover Offer
Confirmation of Standard & Poor’s Credit Rating of Powerco
Takeover Offer Declared Unconditional

1. Confirmation of Standard & Poor’s Credit Rating of Powerco

Prime Infrastructure Networks (New Zealand) Limited (“Prime Infrastructure Networks (NZ)”) today received confirmation from Standard & Poor’s of the continuation of an investment grade credit rating for Powerco Limited (“Powerco”).

Standard & Poor’s have advised that Powerco would obtain a ‘BBB’ rating with a stable outlook where Prime Infrastructure Networks NZ acquires 100% of Powerco and agreed ringfencing and financial covenants are implemented. Provided these measures are introduced, the senior secured debt would consequently be rated ‘BBB’.

The receipt of this preliminary advice from Standard & Poor’s satisfies Condition 6.4 of the Takeover Offer, which required “Standard & Poor’s to confirm that the credit rating of Powerco after becoming a subsidiary or under the control of Prime Infrastructure Networks (NZ) or any of its subsidiaries will be BBB or better”.

Standard & Poor’s confirmation now enables Prime Infrastructure Networks (NZ) to confirm the satisfaction of Condition 6.5 of the Takeover Offer which requires that “no review event, repayment event or event of default under the financing contracts of Powerco or any of its subsidiaries will, or is likely to, occur as a consequence of Powerco or any of its subsidiaries becoming a subsidiary or under the control of Prime Infrastructure Networks (NZ) or any of its subsidiaries”.

Standard & Poor’s has advised that Powerco’s rating will remain on CreditWatch negative until the Takeover Offer is completed, and certain terms and conditions agreed with Standard & Poor’s are implemented.

2. Takeover Offer Declared Unconditional

Having received the necessary confirmations from Standard & Poor’s, the directors of Prime Infrastructure Networks (NZ) have today declared the Takeover Offer for Powerco Shares and Capital Bonds unconditional. All conditions to the Takeover Offer have either been satisfied or waived.

Managing Director Mr Chris Chapman said “We are pleased to announce that the Offer is now unconditional. The Powerco Board members have confirmed that they intend to accept the Offer. As we will not be extending the Offer period beyond 2 November, now is the time for all Powerco shareholders to immediately complete and return their Acceptance and Transfer Forms to Powerco’s Share Registry to avoid missing the impending closure of the Offer”.

The Takeover Offer remains open for acceptance by Powerco share and capital bond holders until 2 November 2004. Payment of consideration to acceptors will be made by Prime Infrastructure Networks (NZ) within 7 days of the Takeover Offer closing.

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