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Offer for Strategic

News Release 17 July 2008


Offer for Strategic

A consortium consisting of Strategic Finance Limited’s (“Strategic Finance”) original owners, senior management and BOS International, part of the HBOS Australia group, has today confirmed that it has agreed indicative non-binding terms with Allco HIT Limited to buy Strategic Investment Group Limited, the immediate parent of Strategic Finance.

BOS International will have an initial 19.9% cornerstone shareholding, with the ability to increase to 49% to reflect its financial contribution to the consortium. The original owners and senior management will hold the balance of the shares in the consortium.

The consortium team includes amongst others Graham Jackson, Jock Hobbs and Marc Lindale who are all executive directors of Strategic Finance as well as CEO Kerry Finnigan.

Mr Finnigan said despite the difficulties facing the New Zealand finance company sector, the proposed ownership change of Strategic Finance should ensure its long-term future.

“We have always remained fully engaged with the business and firmly believe in its future prospects. Despite current market conditions, history has shown that the need for strong finance companies in New Zealand will not disappear. We have every confidence that the change of ownership will ensure that Strategic Finance will be one of the companies servicing this need. Partnering with BOS International and involving management is a major boost for Strategic Finance and should be viewed positively in this market.” Mr Finnigan said.

Key to the consortium acquisition is that BOS International will also increase its existing wholesale facility in Strategic Finance to NZ$150 million. This further diversifies Strategic Finance’s reliance on debenture funding and the consortium’s intention is for Strategic Finance to look to offer new products to the market.

Mr Finnigan said it was critical to have the backing of HBOS. Strategic Finance and other consortium members have enjoyed a very strong relationship with HBOS and could not ask for a better partner.

“HBOS has been around for well over 300 years and its willingness to support us in this transaction is reflective of its ability to stand by its clients even during extremely tough market conditions. The value that the Bank’s involvement brings to the consortium and to Strategic Finance will be immense”.

Jack Dykes, CEO of BOS International said “We've had a strong relationship with Strategic for several years. They have quality management which we believe can take advantage of opportunities emerging from the current market turmoil in this sector and are pleased to strengthen our relationship".

The acquisition is subject to due diligence and entering into binding legal agreements, which the consortium is looking to complete by the end of the month. The sale process may take up to two months, and would require various shareholder consents and regulatory approvals prior to the acquisition being finalised.

ENDS


Editors Notes:

Details on HBOS Australia


• BOS International and HBOS Australia is a member of the HBOS Group, one of the world’s largest financial services organisations providing retail, business and corporate banking and insurance and investment services to more than 23 million customers.

• HBOS Australia consists of four diverse companies being BankWest, Capital Finance, St Andrews and BOS International.

• HBOS Australia employes more than 6,000 people.


• HBOS Australia announced a profit before tax for the 31 December 2007 year of AUD $757 million.

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