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CBS Redeeming Preference Shares.

NZX MEDIA STATEMENT

22 MARCH 2007

CBS Redeeming Preference Shares.

Canterbury Building Society (‘ABS Canterbury’) today announced its intention to redeem the society’s 3 million preference shares.

The move was foreshadowed at the society’s 2006 and 2005 annual meetings.

CBS Canterbury chairman Mr Graham Kennedy said, “CBS directors now have confirmation that the society’s preference shares will not be permitted to be included as “equity” under the new International Financial Reporting Standards. These new standards apply for the society’s reporting periods after 1 April 2007.

“Coupled with a desire to simplify our structure for the recently announced merger discussions with the Loan & Building Society, CBS directors have decided to arrange a capital restructuring.

“We have also previously indicated that our preference shareholders, many of whom have been with us since the shares were first issued, would be treated fairly if it became necessary to redeem these shares.”

CBS proposes that on 14 May 2007 CBS preference shares will be redeemed in full at a value of $1.00 per preference share. On the same day preference shareholders will receive a bonus dividend of 0.50 cents per ordinary share (fully tax imputed), providing them with $1.50 per share (provided the holder’s marginal tax rate is 33%).

Preference shareholders will be offered a choice of receiving the share redemption and dividend as payments in cash, or reinvesting the proceeds of their share redemption and dividend in a new issue of ordinary shares in CBS Canterbury to be made at $4.50 per ordinary share. (The proceeds from 3 preference shares and dividends will purchase 1 ordinary share).

“The directors consider the terms to be very fair,” said Mr Kennedy.

“The shareholders will also be entitled to apply for excess shares over and above their base entitlement,” said Mr Kennedy. “The maximum number of excess shares for which they may apply is the same number of shares as is included in the initial entitlement, and this entitlement will be non renounceable The allotment of these shares will be pro rata among those who apply and will be limited by availability.”

“Those preferring to take the cash will have the opportunity to invest in a preference loyalty account which will attract interest at the rate of 8% pa for a 12 month term.”

Preference shareholders will shortly be mailed a prospectus setting out the terms under which preference shares are to be redeemed.

Mr Kennedy urged preference shareholders not to sell their existing holding prior to receiving and reading the prospectus as the strike price of the new issue of ordinary shares compares favourably with the recent level of sharemarket trades in CBS ordinary shares.

Shareholders not notifying the society as to their choices will be assumed to have elected to take the cash option.

The record date for the redemption is Thursday 5 April 2007.


Ends

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