20 February 2007

N E W S R E L E A S E

TIML Converts SPARCS Balance

Taranaki Investment Management Ltd (TIML) has converted the balance of New Plymouth District Council’s holding of SPARCS (subordinated prime adjusting reset convertible securities), which the council received in the 2004 sale of its Powerco stake.

The SPARCS have been converted into stapled securities issued by Babcock and Brown Infrastructure (BBI, formerly known as Prime Infrastructure), the company which bought the council’s stake in Powerco.

Traded on the Australian Stock Exchange, BBI Stapled Securities now form part of the council’s Perpetual Investment Fund (PIF). Since its inception immediately following the Powerco sale, the PIF has continually provided NPDC with at least the required payment (currently $21.5 million per year). The fund has also grown in value and stood at $281 million at the last quarterly report to the council in December 2006.

Rodger Kerr-Newell, CEO of TIML says: “BBI Stapled Securities represent a good long term investment for the council. We see good long term prospects for BBI’s businesses and we intend to maintain a significant stake in both Powerco and other utilities, through retaining a holding in BBI.

“We have now sold or converted all the approximately $100 million of SPARCS we inherited as part of the Powerco sale. As our advisors suggested at the time, the SPARCS have proved to be a very profitable instrument.

“They have been instrumental in the solid performance of the PIF, the success of which enables NPDC to maintain both its AAA credit rating and its position as one of New Zealand’s lowest rating local authorities.”

 A release payment to NPDC of $5.375 million was made at the end of the December quarter.

ENDS

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