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Tranz Rail Announces Success Of $65 Million Issue

Tranz Rail Announces Success Of $65 Million Rights Issue

Tranz Rail today announced the successful conclusion of its $65 million raising of new capital through a renounceable rights issue as part of the financial restructuring necessary to settle the letter of credit requirement in the Aratere lease and to secure its ongoing banking facilities.

Previously Tranz Rail had announced that it had successfully reached agreement with the Aratere Group lenders and as a condition of this agreement, Tranz Rail was required to complete a capital raising before 31 March 2003. Today’s announcement means the issue has been completed before Christmas and that the other refinancing formalities can now be concluded.

Tranz Rail Chairman Wayne Walden said today “We are pleased that investors have supported the offer as a demonstration of confidence in the company’s prospects. This was reflected in a 97% take up of Rights in the offer. This is the best take up in any Rights issue in New Zealand in over two years and we are delighted with this outcome. This paves the way for the conclusion of the other refinancing formalities so that we can now focus all our efforts on the operation of the business and go forward to meet the markets expectations. This is a very good outcome for Tranz Rail and is a positive step forward as it removes the level of uncertainty that has surrounded the company’s capital structure for some months”.

Under the terms of the issue, qualifying Tranz Rail shareholders on the register as at 5pm on 22 November were entitled to acquire five new shares for every seven shares they hold, at an issue price of $0.75. The offer closed at 5.00 pm on 13 December.

ABN AMRO Rothschild was the lead manager and underwriter to the rights issue and ABN AMRO was the organising broker.

A total of 86,944,455 new shares have been issued in the rights issue and $65.2 million was raised with 50% of the net proceeds used to support a letter of credit to the leaseholders of the Aratere ferry and the remaining 50% used to repay bank debt. The total amount of ordinary fully paid shares on issue for Tranz Rail will now be 210,239,137.

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