Value Realisation

Centrica PLC
09 December 2002

9 December 2002



Centrica realises value from its Canadian water heater investment

Centrica plc's wholly owned subsidiary, Enbridge Services Inc, announced today
that it has filed a final prospectus in Canada for the initial public offering
of units of The Consumers' Waterheater Income Fund (the 'Fund') (TSX: CWI.UN).
Upon closing, Enbridge Services Inc will receive approximately C$709 million
(£289m) in cash proceeds.

The offering of 25 million units at C$10 per unit is scheduled to close on
December 17, 2002, and is expected to raise gross proceeds of C$250m (£102m).
The Fund has also entered into an agreement for the placement of a C$500m
(£204m) Floating Rate Note ('FRN') at the closing of the Fund offering.

Together, these arrangements imply a Fund enterprise value of approximately C$1
billion (£407m). The proceeds will be used by the Fund to acquire the portfolio
of water heater assets currently owned by Enbridge Services Inc.

Enbridge Services Inc will also have an approximate 49.5 per cent equity and
voting interest in the Fund and will hold loan notes of the Fund of
approximately C$32m.

The Fund and Enbridge Services Inc have entered into a long-term arrangement in
relation to the future operation of the water heater rental business. The Fund
will own the assets and be entitled to receive 65 per cent of rental payments
arising from the leasing of these assets to Enbridge Services Inc's customers.
Enbridge Services Inc will continue to service the assets and receive 35 per
cent of the total rental payments and, due to its equity interest in the Fund, a
proportional share, after debt service, of Fund distributions.

The transfer of the water heater assets is to be effected by the sale of a
subsidiary of Enbridge Services Inc, Direct Water Heater Rentals Inc ('Rentco').
Based on the unaudited financials for the five months from 7 May 2002, the date
of purchase of Enbridge Services Inc by Centrica, to 30 September 2002, Rentco's
Earnings before Tax were C$0.8m (£0.3m) on Turnover of C$53m (£22m). The net
assets of Rentco that will be transferred had a book value (unaudited) of C$441m
(£180m) as at 30 September 2002. The proceeds from the transaction will be used
for general corporate purposes.

Centrica acquired the water heater assets when it purchased Enbridge Services
Inc in May 2002. At the time Centrica said that it would explore alternatives
for refinancing these assets in order to significantly reduce its investment
whilst retaining the customer relationships and installation, repair and
servicing businesses.

Sir Roy Gardner, Chief Executive of Centrica said: 'Today's announcement is
consistent with the statements we made when acquiring the water heater assets as
part of our purchase of Enbridge Services Inc in May 2002.

'It also means that Centrica has realised a significant proportion of its
original C$1 billion investment in Enbridge Services Inc and demonstrates that
we do not need to own those assets to maintain our direct relationship with
customers.'

Notes to investors and editors:

 1. A syndicate of underwriters led by Scotia Capital Inc is underwriting the
    offering. An over-allotment option for an additional 3.75 million units has
    been granted to the underwriting syndicate. If exercised, the proceeds would
    be used by the Fund to reduce Enbridge Services Inc's retained interest in
    the Fund.
 2. The debt raised by the Fund will be non-recourse to Enbridge Services Inc,
    and therefore to Centrica. The C$500m FRN is underwritten by TD Securities
    Inc. The scheduled repayment date for the FRN is December 2007, but it is
    expected to be refinanced through the issuance in 2003 of Senior Notes, in
    relation to which a preliminary prospectus has been filed with Canadian
    securities regulatory authorities. The Fund has received a preliminary
    rating on the proposed Senior Notes of AAA from Standard & Poors and a
    provisional rating of AAA from Dominion Bond Rating Services.
 3. Although Centrica, through Enbridge Services Inc, intends to retain only a
    minority equity participation in the Fund and its debt is non-recourse to
    Centrica, it is expected that the Fund will be consolidated by Centrica as a
    quasi-subsidiary under UK Generally Accepted Accounting Principles.
 4. Enbridge Services Inc is subject to a customary 6-month blackout period
    during which it has agreed not to sell any further units of the Fund (except
    those covered by the over-allotment option) without the consent of the
    Scotia Capital Inc.
 5. Rentco's Earnings Before Tax for the 12 months ended 30 September 2002
    (unaudited) were approximately C$18m (£7.3m).
 6. An income fund is an equity market product used in the Canadian capital
    markets, differentiated from ordinary equity offerings primarily in that the
    listed instrument is a unit in a trust and not a share in the corporation
    that historically operated the underlying business.
 7. In addition to the water heater assets, the original Enbridge Services Inc
    acquisition gave Centrica around 1.75 million customer relationships,
    including the leasing of water heaters and installation and servicing of
    heating, ventilation and air conditioning systems (HVAC). It also included
    90,000 natural gas contract customers and a national business to business
    HVAC operation.



Enquiries:

Centrica Investor Relations:          01753 494900

Centrica Media Relations:             01753 494085


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