Rubicon announces the sale of Challenge

MEDIA RELEASE

Rubicon announces the sale of Challenge to Caltex NZ, and an intention to return further capital to shareholders

Auckland, 28 June, 2001 - Rubicon announced today the sale of the Challenge service station network to Caltex NZ Limited. The sale, which is subject to working capital adjustment, completed today. The net cash proceeds realised by Rubicon from the sale to Caltex will be approximately $50 million.

Mr Luke Moriarty, the Chief Executive Officer of Rubicon, said, “The sale of Challenge to Caltex represents an outstanding outcome for Rubicon shareholders. This sale, combined with the disposal of the Brisbane fuels terminal for NZ$23 million that was announced earlier this month, will return to Rubicon some $73 million in cash. This compares with a total acquisition cost to Rubicon, for both Brisbane and Challenge, of only $20 million - a value gain of $53 million, or 15 cents per Rubicon share.”

With the sale of the New Zealand Refining shares, the Brisbane fuels terminal and now Challenge, Rubicon has now completely exited its involvement in the fuels sector that it had inherited from the Fletcher Challenge Group restructuring process earlier this year.

Mr Bob Constantine, the General Manager of Challenge said, “We are pleased that Caltex has agreed to continue the Challenge brand in New Zealand, and see this is a reflection of the huge and loyal support that the New Zealand motorist has given the brand since Challenge began operations three years ago. Over 100 independent service station owners throughout New Zealand, their employees, and our company operated service station team members, now have stronger and more certain prospects.” he said.

Please Note: If you do not receive 2 page(s) including this page, or if any page is not readable, please call the sender immediately on telephone 64-9-356 9800. Further information on Rubicon Limited can be viewed at the Rubicon web site, at http://www.rubicon-nz.com

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The Company also announced today its intention to increase the return of capital to shareholders announced earlier this month, from $40 million to $60 million. The exact details of the buy-back will be announced within a month.

Mr Moriarty said, “ As we have already stated, we are very conscious of the discount to net asset backing at which Rubicon is currently trading. Our immediate focus is putting in place value-initiatives to close this gap. These initiatives include:-

- Completing the sale of our non-core assets for value;

- Announcing our intention to increase the share buy-back we announced earlier this month, from $40 million to $60 million - the equivalent of 17 cents per Rubicon share;

- Bringing value to our shareholding in Fletcher Challenge Forests;

- Focusing on the extraction of value from our remaining existing operating businesses - being our forestry and processing operations in Argentina, and our Eucalypt and Radiata clonal development and tree-stock production activities in New Zealand; and

- Actively managing our developing businesses in ArborGen and our alliance with HortResearch.

Following the sale of the Brisbane and Challenge businesses, Rubicon’s remaining business portfolio will consist of:-

- An interest in 31.67% of ArborGen - the world’s leading bio-engineering tree business, that includes Westvaco and International Paper as equal partners

- Rights to a comprehensive genetic database for commercial forestry species, and also rights to related international patents

- A Radiata and Eucalypt clonal development business

- A Trees & Technology business based at Te Teko with tree improvement and tree-stock production capabilities and facilities

- A 2.95% interest in Genesis Research and Development Corporation

- A 17.6% interest in Fletcher Challenge Forests Limited

- An interest in 50% of Forestadora Tapebicua

- An alliance with HortResearch for the development of superior horticultural cultivars

The Net Asset Backing of Rubicon is approximately $1.00 per share.

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