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Life Pharmacy Seeks $9 Million For Expansion

News Release

7 August 2008

Life Pharmacy Seeks $9 Million For Expansion Programme


Life Pharmacy Limited - Announcement of Rights Issue

Life Pharmacy Limited (NZX:LPL) today announced its intention to undertake a 3 for 2 renounceable rights issue of partly paid ordinary shares to all shareholders, at an offer price of $0.40 per share, with $0.20 per sharepayable on subscription, and $0.20 per share payable 12 months following allotment of the shares.

The rights issue is expected to raise a minimum of $9 million. The net proceeds of the offer will be used to:

• reduce LPL's external bank debt

• provide adequate resources for future growth and working capital in the health, beauty and wellness sector; and

• invest in the future growth of pharmacy within New Zealand.

LPL Chairman, Liz Coutts said: `The objective to manage our debt exposure and fund expansion by way of equity is a prudent one given the macroeconomic environment, and the Board believes the growth plans are modestly ambitious. A capital raising will allow us to gain momentum and put us in a more favourable position to act as and when opportunities arise.'

LPL has applied to the NZX to have the rights listed on the NZSX to allow
shareholders who do not wish to participate in the issue to sell their rights. In addition, LPL has applied to the NZX for a waiver to allow the issue to incorporate an oversubscriptions facility. If granted, the waiver will allow shareholders to submit applications for shares in excess of their rights entitlements (to a maximum of 50,000 shares per shareholder), which will be available in the event that there is a shortfall in applications.


LPL Trustee Limited, backed by Andrew Bagnall and PIMS 2005 Limited (the company's two largest shareholders) have indicated their support for the rights issue. Also, LPL Trustee Limited, having the option to acquire up to 50.01% of the total shares issued under any pro-rata capital raising by LPL(such option being granted by LPL on 18 June 2007 and approved by shareholders on 26 July 2007), has agreed to take up this right, but to waive this right to the extent necessary to allow other LPL shareholders to exercise their pro-rata entitlement under the rights issue and to participate in the proposed oversubscriptions facility.

The record date for rights entitlements is 21 August 2008 and offer documentation (including a short-form prospectus and investment statement) is expected to be mailed to shareholders the following day on 22 August 2008. Rights trading and the offer period are anticipated to commence on 22 August 2008, with rights trading to cease on 15 September 2008. The offer is anticipated to close on 17 September 2008 with shares to be allotted the next day, 18 September 2008.

Ends

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