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Aquiline Gives Public Share Opportunity


Aquiline Gives Public Share Opportunity

For First Time To Help Fund Accelerated Growth Plan

Shares in fast growing New Zealand management and investment company, Aquiline Holdings Ltd, will be available to the general public in New Zealand for the first time since it was established by chairman Jim Scott in 1995.

Mr Scott announced today a proposed $90 million capital raising for Aquiline involving converting preference shares and redeemable preference shares.

The company has some nine million ordinary shares on issue held by some 200 shareholders who are directors, staff and associated parties. Based on the current share price the market capitalisation of the company is some $160 million.

In the year to June 30, 2003, the company achieved sales of $67,796,000, and net profit after taxation of $2,612,000.

In the six months to December 31, 2003 sales were $74,437,000 and net profit after tax was $3,350,000.

Aquiline already owns 14 small to medium size (SME) importing businesses, and is raising capital to help accelerate its planned acquisition programme.

In a registered prospectus and investment statement now available, the company is seeking up to $65 million in converting preference shares (CPS's) and up to $25 million in redeemable preference shares (RPS's).

Subscribers to the CPS's will receive a dividend of 6% until their CPS's are converted into ordinary shares as the company needs more capital to fund its investment programme, or as shares become available from current shareholders. All CPS's must convert to ordinary shares within two years. The dividend paid on CPS's will be imputed to the maximum extent possible, so that investors will effectively receive a gross dividend in excess of the dividend rate. Shares will be converted in the order in which CPS's are entered on the company's Capital Register, and at the share value set by the directors every six months, applying at the time of conversion.

Investors can also apply for RPS's, which carry a dividend of 7% p.a. until June 30, 2007 but do not convert to ordinary shares. The dividend paid on RPS's will also be imputed to the maximum extent possible, so that investors will effectively receive a gross dividend in excess of the stated dividend rate.

Applications for CPS's must be for a minimum of 20,000, and for RPS's 10,000 with payment in full on application. The offer is not underwritten and closes on December 31, 2004. The issue price of both CPS's and RPS's is $1 per share.

Mr Scott said the CPS's and RPS's were being offered so that the company would have assured access to funding for its acquisitions on a progressive basis that was attractive to both the company and investors.

The directors announced today that the share price, which will apply for shares from July 1 2003 to December 31 2003, will be $23.11 per share.

The current share price is $17.78, and has applied from January I, 2004. In the preceding six months the share price was set at $13.68, and for the first six months of the 2003 calendar year it was $4.80.

Mr Scott said today that while the company ensures liquidity in the shares through a company administered Capital Register, with the share price reviewed six monthly by the board, shareholders are free to trade shares directly at any agreed value.

>From July 1, 2003 to March 8, 2004, 88% of all transactions in existing shares have been through the company administered system. All sellers have been readily matched by purchasers, and the company has no current intention of seeking any form of Stock Exchange listing.

Mr Scott said that Aquiline Holdings had a stated long term policy of attempting to achieve a minimum Total Shareholder Return (dividend and increase in capital value) of at least 25% per annum and this had been more than achieved over the past two financial years.

"There is no mystery to what we do. We seek privately owned importing companies who are or can be number 1, 2 or 3 in their specialist field, buy them if they meet our rigorous criteria and then re-engineer their balance sheets and their management systems to substantially increase their performance and unlock value. We have a small, tight head office structure, based in Napier, and our individual company managers are all incentivised to reach or exceed targets by applying the Aquiline operational formula to each new acquisition, and then seeking to grow the restructured companies."

Mr Scott said Aquiline's focus is on increasing shareholder wealth through continuing to apply proven formulae to the purchase and management of small to medium businesses involved in importing and distributing essential commodities and manufactured products, which cannot be economically produced in New Zealand.

Aquiline subsidiaries are predominantly involved in foodstuffs, textiles, office products, chemicals and minerals, electronics, hardware and other industrial products. Current Aquiline 100% owned subsidiaries (in order of acquisition) are Clark Products Ltd, Alpha Inter-Trade Ltd, Paint Aids Ltd, Wales & MacKinlay Ltd, Marsanta Foods Ltd, Impact Klipbind Ltd, Instant Office Products Ltd, Exim International Ltd, Astra Office Products Ltd, Woodhouse Apparel Ltd, Harvest Traders Ltd, Stowers Containment Solutions Ltd, Radiola Corporation Ltd and Global Food Traders Ltd.

Mr Scott said the company has been trading strongly in the early months of 2004, and is on target to complete further acquisitions in the next few months.

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