Shareholders Vote For Separation And Sale

Shareholders Vote For Separation And Sale Of Fletcher Challenge Energy To Shell And Apache

AUCKLAND, 6 March 2001 ¡V Fletcher Challenge¡¦s shareholders today voted in favour of the restructuring proposals recommended by the Board in October 2000. Voting on four separate resolutions and a resolution to adjourn the meeting put by Mr Tony Gibbs, Fletcher Challenge shareholders decided in favour of a sale of the Energy Division to Shell and Apache. The shareholders¡¦ also voted in favour of the separation of the Building Division as a stand-alone company, Fletcher Building.

The result of the vote for the resolutions which endorsed the sale of Fletcher Challenge Energy, was particularly pleasing given that in excess of 85 per cent of shareholders voted in favour of the sale of Fletcher Energy to Shell and Apache

The recommendations were a result of almost a year of investigating alternatives and formulating the outcomes which would deliver greatest value to all shareholders of Fletcher Challenge.

Court sanction is now required before the transactions can be completed, expected to be by 23 March. The effects of the decisions made today include:

„X The sale of Fletcher Challenge Energy to Shell and Apache. Shareholders will receive a cash component of US$3.55; an entitlement to one Capstone Turbine share for each 70 Fletcher Challenge Energy shares, and a share in Rubicon for each Fletcher Challenge Energy share. Shareholders are expected to receive these components by the end of March

„X The creation of a new company, Rubicon. It is expected to be listed on the NZSE and ASX by the end of March

„X The separation of the Building Division to become a stand-alone company, Fletcher Building. Shareholders will receive 1 share in Fletcher Building at no cost, in exchange for each share in Fletcher Challenge Building Division. The new company is expected to be listed on the NZSE, ASX, and NYSE.

„X Fletcher Challenge Forests will be stand-alone, and remain listed on the NZSE, ASX, and NYSE.

„X The restructuring of the Capital Notes, as agreed by Noteholders yesterday.

¡§The decision of shareholders to accept the Board¡¦s recommendation that Fletcher Challenge Energy be sold to Shell and Apache was absolutely the right decision in light of the uncertainty surrounding the ability of the Peak/Greymouth consortium to deliver a firm offer¡¨, the Chairman, Roderick Deane said. ¡§Under Shell and Apache¡¦s ownership and management the assets will be in the hands of one of the world¡¦s most experienced oil and gas explorers and producers. Shell and Apache have the financial and technical ability to provide the continuous exploration and development required to expand and replace the reserves¡¨.

¡§The last minute proposal from Peak has been exciting for shareholders. We have seen democracy in action and shareholders have made their choice. It must not be forgotten that while Peak has not managed to achieve their main objective, they have by their actions delivered a further increase in value for Fletcher Energy shareholders by forcing Shell and Apache to increase their offer price. This was no small feat¡¨ said Dr Deane.

Dr. Deane expressed his confidence that the results of today¡¦s meeting would deliver certain value to shareholders, and fully addresses the separation of the Fletcher Challenge Group.

¡§This is the penultimate step in a long and complex process¡¨, he continued. ¡§We believe we have been able to extract, and now deliver, best value over time for shareholders in Fletcher Challenge Limited. It is sad to see the end of one era approaching, but also exciting to know that Fletcher Challenge Forests, Fletcher Building, and Rubicon are led by Boards of Directors and management teams who will ensure a successful and effective future for their shareholders in focused environments.¡¨

ENDS

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