27 AUGUST NEW ZEALAND GAZETTE 3135

Notes to and Forming Part of the Financial Statements
For the Year Ended 31 March 2003

POWERCO

ELECTRICITY DIVISION

2 Share Capital

3 Redeemable Fixed Coupon Bonds

As Powerco Limited is an integrated business, this disclosure relates to the business as a whole.

On 31 March 2003, Redeemable Fixed Coupon Bonds on issue were:

These bonds were issued on 1 September 2000 and expire on 1 September 2005 (5 year bonds) and 1 September 2007 (7 year bonds). Bonds are carried at cost and have fixed interest rate terms. As at 1 April 2003, the interest rate on the redeemable fixed coupon bonds are:

• 5 year fixed coupon bonds: 7.47%
• 7 year fixed coupon bonds: 8.15%

On maturity date, bondholders have a right to require the Company to redeem all of their bonds for cash. If this option is not taken, the Company will redeem the bonds for cash or convert the bonds to ordinary shares.

The fair value of each tranche of the bonds at 31 March is:

• 5 year fixed coupon bonds: $101,005,872 (2002: $100,191,502)
• 7 year fixed coupon bonds: $81,576,604 (2002: $80,288,758)

4 Capital Bonds

As Powerco Limited is an integrated business, this disclosure relates to the business as a whole.

On 31 March 2003, capital bonds on issue were:

The Capital Bonds were issued on 22 May 2002 and are unsecured, subordinated debt obligations of Powerco Limited which are non-cumulative as to interest. The capital bonds have an interest rate of 8.4% p.a, fixed until 22 May 2007. Thereafter, Powerco has the ability to reset the terms and conditions of the capital bonds, including the interest rate, on dates determined by Powerco (Election Dates). On each election date, Powerco has the right to convert some or all of the capital bonds into Powerco ordinary shares and bondholders can elect to retain their capital bonds or sell some or all of their capital bonds under the resale facility arranged by Powerco. If a bondholder does complete the sale of any bonds it has elected to sell, the bondholder can elect to convert such bonds to Powerco ordinary shares on the election date.

The fair value of the capital bonds as at 31 March 2003 is $101,425,000.

5 Commercial Paper Facility

As Powerco Limited is an integrated business, this disclosure relates to the business as a whole.

The Company has established a commercial paper facility to enable the Company to borrow money from the capital market. The programme is supported by a cash advances facility of $100 million with a syndicate of banks made up of the Bank of New Zealand, Westpac and ANZ Investment Bank, which continues until 20 October 2004. The facility is unsecured and is subject to a negative pledge deed declared by deed poll on August 1997, which has been joined by all subsidiaries (excluding Powerco Australian Holdings Limited and Powerco Holdings Limited) as guaranteeing subsidiaries. At year-end a sum of $125,000,000, which includes an interest portion of $1,848,311 of 90 day bills, with varying maturity dates, had been drawn down under the commercial paper programme. (2002: $144,000,000 was drawn down under the commercial paper programme which included an interest portion of $1,820,306).

6 Cash Advances Facility (Commercial Bank Debt)

As Powerco Limited is an integrated business, this disclosure relates to the business as a whole.

Powerco Limited established an Asset Purchase Facility in July 2002 for the purpose of acquiring network assets from UNL. This Asset Purchase Facility for $740 million is supported by a syndicate made up of Bank of New Zealand, Westpac and ANZ Investment Bank. This facility is made up of three commitments - a Bridge Facility of $240 million (expiring 31 October 2003), Tranche A of $250 million (expiring 1 November 2004) and Tranche B of $250 million (expiring 1 November 2005). The facility is unsecured and is subject to a Negative Pledge Deed declared by Deed Poll on August 1997, which has been joined by all subsidiaries (excluding Powerco Australian Holdings Limited and Powerco Holdings Limited) as Guaranteeing Subsidiaries. At year-end a sum of $707 million, which has accrued interest of $7,175,571, had been drawn down under the Asset Purchase Facility. The remaining $33 million of this facility has since been cancelled. This facility is due for rollover during the next year and will be refinanced on an on-going basis in accordance with normal commercial terms and is therefore of a non-current nature. At 31 March 2002, Powerco Limited had a Commercial Bank Debt facility with Bank of New Zealand totalling $105 million. This has since been repaid.