Placing and Open Offer

Utilico Emerging Mkts Utilities Ltd 07 April 2006 For release at 7:00AM on 7 April 2006 Utilico Emerging Markets Utilities Limited Placing and Open Offer of up to 100 million C Shares at 100 pence per C Share Introduction Utilico Emerging Markets Utilities Limited ('UEM' or the 'Company') is pleased to announce that it has today written to shareholders in relation to proposals for a Placing and Open Offer of C Shares, to be made by Arbuthnot Securities Limited, to raise up to £100 million before expenses. Highlights • Open Offer of 75,070,776 C Shares to qualifying holders at a price of 100p per C Share • Placing of up to 24,929,224 C Shares to investors procured by Arbuthnot Securities at a price of 100p per C Share • New Warrants to be issued, on the basis of one New Warrant for every five C Shares subscribed under the Placing and Open Offer • Total proceeds will amount to up to £100 million before expenses • Assets representing the net proceeds will be accounted for and managed as a distinct pool of assets until conversion • Arbuthnot Securities Limited is acting as nominated adviser and broker to UEM Enquiries: Utilico Emerging Markets Utilities Limited Tel. 0137 227 1486 Charles Jillings Arbuthnot Securities Limited Tel. 0207 012 2000 Alastair Moreton Utilico Emerging Markets Utilities Limited Placing and Open Offer of up to 100 million C Shares at 100 pence per C Share Background to the Company and to the Placing and Open Offer On 2 March 2006, the Company announced that the Directors were considering proposals for a further issue of shares. The Board is pleased to announce today proposals to raise up to £100 million (before expenses) by way of a Placing of up to 24,929,224 million C Shares and Open Offer of 75,070,776 C Shares (the 'Issue'). The Company has submitted to the UK Listing Authority for approval a Prospectus in connection with the Placing and Open Offer, which will shortly be available at the offices of Arbuthnot Securities Limited and on the website of the Company at the following address: http://www.utilico.co.uk/uemu/downloads/proapr06.pdf The Company is a Bermuda exempted, closed ended investment company with the objective of providing shareholders with capital growth from investing predominantly in utilities based in emerging markets (being predominantly countries included in leading emerging market indices). It was launched in July 2005, when it raised £52.5 million (before expenses) and a £22.5 million portfolio of existing investments was transferred to the Company by Utilico Investment Trust plc. The Company's Ordinary Shares and existing Warrants are traded on AIM and the Bermuda Stock Exchange. The Company's investment manager is Ingot Capital Management Pty Ltd. Benefits of the Issue The Directors believe that the Placing and Open Offer will confer the following benefits for shareholders and the Company: (a) increase the potential size of strategic investments from which value can be better achieved as larger holders; (b) capture long-term value by establishing a sizeable presence in the infrastructure sector; (c) ensure, through the C Share conversion mechanism, that existing shareholders will remain fully invested and not suffer any dilution for the costs of the Issue or upon conversion of the C Shares; (d) allow existing shareholders to increase the size of their investment; (e) allow new investors to invest in the Company who would not otherwise have been able to make an investment of their preferred size in the Company; (f) provide a larger asset base over which the fixed costs of the Company may be spread, thereby reducing the Company's total expense ratio; and (g) provide the Company with a wider shareholder base and an increased investor awareness and provide shareholders with greater liquidity following the conversion of the C Shares. The Placing and Open Offer The Company is seeking to raise up to £100 million, before expenses, through the Placing and Open Offer of up to 100 million C Shares. The Placing and Open Offer are not being underwritten and, as a result will not proceed unless aggregate subscriptions and placing commitments are received which represent a minimum of £50 million (before expenses). Arbuthnot Securities has conditionally agreed, as agent for the Company, to use reasonable endeavours to procure placees for 24,929,224 C Shares in the Placing at a price of 100p per C Share. Arbuthnot Securities has also agreed to make the Open Offer on behalf of the Company under which 75,070,776 C Shares are being made available to existing shareholders with the exception of certain overseas shareholders ('Qualifying Holders') at a price of 100p per C Share. Under the terms of the Open Offer, Qualifying Holders will be invited to subscribe for C Shares on the basis of one C Share for each Existing Ordinary Share held on 4 April 2006, being the record date for the Open Offer (the 'Basic Entitlement'). Qualifying Holders will be able to apply for C Shares in excess of their Basic Entitlement but such applications will only be satisfied to the extent that (i) applications made by other Qualifying Holders are for less than their Basic Entitlement and (ii) Arbuthnot Securities, in consultation with the Company, does not place such C Shares with institutional investors. C Shares and principles of conversion The Board is proposing to effect the capital raising by way of a placing of up to 24,929,224 million C Shares and Open Offer of up to 75,070,776 million C Shares. The assets representing the net proceeds of the Issue will be accounted for and managed as a distinct pool of assets until the conversion of the C Shares. The C Shares will convert into ordinary shares on the basis of the conversion ratio, which will reflect the proportion which the Company's net assets attributable to each C Share (undiluted) bears to the net assets attributable to each existing ordinary share (undiluted) at the calculation date (being on or before 30 November 2006). The C Share net assets will be calculated having deducted the full costs of the Issue, which will be borne by the C Shareholders alone. New Warrants Under the Issue, new Warrants will be issued on the basis of one new Warrant for every five C Shares subscribed. Following the conversion of the C Shares such number of new Warrants will be cancelled so that the number of new Warrants outstanding equals one fifth of the number of ordinary shares arising on conversion of the C Shares. However, no additional new Warrants will be issued if the conversion ratio is such that the number of ordinary shares arising on conversion of the C Shares is greater than the number of C Shares in issue prior to such conversion. Following the date of such conversion, and any cancellation of new Warrants as set out earlier in this paragraph, the new Warrants will rank pari passu with the existing Warrants and will have a subscription price of 100 pence. The new Warrants may be exercised on one of the following dates: 31 January and/or 31 July in each of the years 2007 to 2010. Intentions of the Directors and major shareholders The Company has received irrevocable undertakings from two major shareholders (Utilico Investment Trust plc and Foreign & Colonial Investment Trust PLC) both to vote in favour of the resolutions to be proposed at the SGM and to subscribe or all of their Basic Entitlements as follows (although Utilico Investment Trust's undertaking is subject to its subscription not causing it to fail to satisfy the requirements of s.842 of the Income and Corporation Taxes Act 1988): Basic Entitlement Number of C Shares (number of to be subscribed C Shares) under the Open Offer Foreign & Colonial Investment Trust PLC* 10,000,000 10,000,000 Utilico Investment Trust plc 22,522,239 22,522,239 *Foreign & Colonial Investment Trust PLC's holding in the Company is held by F&C Asset Management plc on its behalf. The Directors will all vote in favour of the resolutions to be proposed at the SGM and will, subject only to scaling back, subscribe for all or more than their Basic Entitlement (with excess applications being met as part of the Placing and Kevin O'Connor subscribing wholly through the Placing) as follows: Basic Entilement Number of C Shares (number of C Shares) to be subscribed Alexander Zagoreos 111,825 111,825 Michael Collier 58,278 108,278 Charles Jillings 108,278 158,278 Garth Milne 208,278 258,278 Kevin O'Connor 83,278 333,278 Special General Meeting An SGM of the Company has been convened for 10.00 a.m. (Bermuda time) on 26 April 2006 in order to obtain shareholders' approval for the amendment of the Bye-laws and increase in the Company's authorised share capital in connection with the implementation of the Placing and Open Offer. Expected timetable of principal events* Record Date for the Open Offer 4 April 2006 Latest time for receipt of completed Forms of 5.00 p.m. on 22 April 2006 Direction from holders of depositary interests Latest time for receipt of completed Proxy Forms 3.00 p.m. on 24 April 2006 Special General Meeting 2.00 p.m. on 26 April 2006** Latest date Application Forms may be split 3.00 p.m. on 29 April 2006 Latest time for receipt of completed Forms of 5.00 p.m. on 3 May 2006 Acceptance from holders of depositary interests Latest time for receipt of commitments under the 11.00 a.m. on 4 May 2006 Placing and completed Application Forms and payment under the Open Offer Announcement of the results of the Placing and 8 May 2006 Open Offer Dealings on AIM and the Bermuda Stock Exchange 12 May 2006 expected to commence in the C Shares and new Warrants CREST accounts credited in respect of the C Shares 12 May 2006 and new Warrants issued in uncertificated form Certificates in respect of the C Shares and new Warrants 29 May 2006 expected to be dispatched in the week commencing * All references to times are to London time ** The SGM will be held at the Company's registered office at 10.00 a.m. Bermuda time, which is 2.00 p.m. London time. Recommendation to Shareholders The Board considers that the Proposals are in the best interests of shareholders as a whole. The Board has received financial advice from Arbuthnot Securities and, in giving that financial advice, Arbuthnot Securities has placed reliance on the Board's commercial assessments. Accordingly, the Board unanimously recommends that shareholders vote in favour of the resolutions to be proposed at the SGM. The Board intends to vote in favour of the resolutions in respect of its own beneficial holdings of Ordinary Shares which amount in aggregate to 569,937 Ordinary Shares. Arbuthnot Securities is acting as nominated adviser and broker to the Company. Interim accounts of the Company covering the period from incorporation to 31 December 2006 and prepared in connection with the Prospectus are set out below: UTILICO EMERGING MARKETS UTILITIES LIMITED Unaudited Interim Statement for the period from 9 June 2005 to 31 December 2005 Current financial information can be found on the Company's website, at www.utilicoemergingmarkets.com Summary of unaudited results for the period from 9 June 2005(1) to 31 December 2005 31 December 20 July Change 2005 2005(2) Undiluted net asset value per ordinary share 107.25p 98.36p 9.0% Diluted net asset value per ordinary share 106.04p 98.36p* 7.8% Ordinary share price 106.50p 100.00p 6.5% Premium (based on diluted NAV) 0.4% 1.7% Earnings per share (basic) 8.89p Equity shareholders' funds (£'m) 80.48 73.79 9.1% *There is no dilution (1) Date of incorporation of the Company (2) Date of admission to trading on AIM and Bermuda Stock Exchange Unaudited Income Statement for the period 9 June 2005 to 31 December 2005 Revenue Capital Total £'000s £'000s £'000s ----------------------- ------------- ------------ ----------- Gains on investments held at fair value - 6,363 6,363 Gains on derivative instruments - 55 55 Exchange gains/(losses) 1 (61) (60) Other income 1,305 - 1,305 ----------------------- ------------- ------------ ----------- Total income 1,306 6,357 7,663 Management and administration fees (267) (516) (783) Other expenses (165) (21) (186) ----------------------- ------------- ------------ ----------- Profit before finance costs and taxation 874 5,820 6,694 Finance costs (11) - (11) ----------------------- ------------- ------------ ----------- Profit before taxation 863 5,820 6,683 Taxation (16) - (16) ----------------------- ------------- ------------ ----------- Profit for the period 847 5,820 6,667 ----------------------- ------------- ------------ ----------- Earnings per share (basic) - pence 1.13 7.76 8.89 ----------------------- ------------- ------------ ----------- Earnings per share (diluted) - pence 1.12 7.68 8.80 ----------------------- ------------- ------------ ----------- The Total column of this statement represents the Company's Income Statement, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both prepared under guidance published by the Association of Investment Trust Companies in the UK. All items in the above statement derive from continuing operations. All income is attributable to equity holders of the Company. The Company was incorporated on 9 June 2005 and commenced trading on 20 July 2005. Unaudited Statement of Changes in Equity for the period from 9 June 2005 to 31 December 2005 Share Retained Earnings -------------- Share Premium Warrant Capital Revenue Total Capital Account Reserve Reserves Reserve £'000s £'000s £'000s £'000s £'000s £'000s Issue of ordinary shares and warrants 7,505 63,490 4,051 - - 75,046 Issue costs of ordinary share - (1,230) - - - (1,230) capital Profit for the period - - - 5,820 847 6,667 ------- -------- --------- -------- -------- -------- Balance at 7,505 62,260 4,051 5,820 847 80,483 31 December 2005 ------- -------- --------- -------- -------- -------- Unaudited Balance Sheet 31 December 2005 £'000s ------------------------------------- ------------------ Non current assets Investments held at fair value 77,259 ------------------------------------- ------------------ Current assets Sales for future settlement 2,069 Other receivables 499 Derivatives designated as fair value through profit or loss 766 Cash and cash equivalents 909 ------------------------------------- ------------------ 4,243 ------------------------------------- ------------------ Current liabilities Purchases for future settlement (100) Other payables (826) Derivatives designated as fair value through profit or loss (93) ------------------------------------- ------------------ (1,019) ------------------------------------- ------------------ Net current assets 3,224 ------------------------------------- ------------------ Net assets 80,483 ------------------------------------- ------------------ Equity attributable to equity holders Ordinary share capital 7,505 Share premium account 62,260 Warrant reserve 4,051 Capital reserves 5,820 Revenue reserve 847 ------------------------------------- ------------------ Total equity shareholders' funds 80,483 ------------------------------------- ------------------ Net asset value per ordinary share Basic - pence 107.25 Diluted - pence 106.04 ------------------------------------- ------------------ Unaudited Summarised Cash Flow Statement for the period from 9 June 2005 to 31 December 2005 £'000s ----------------------------------- -------------------- Cash flows from operating activities (50,301) Cash flows from investing activities - ----------------------------------- -------------------- Cash flows before financing activities (50,301) Cash flows from financing activities 51,270 ----------------------------------- -------------------- Net increase in cash and cash equivalents 969 Effect of foreign exchange changes (60) ----------------------------------- -------------------- Cash and cash equivalents at the end of the period 909 ----------------------------------- -------------------- THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES ACT'), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE OFFER, SALE, PLEDGE OR TRANSFER OF THESE SECURITIES IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE ACQUIRING THESE SECURITIES, ACKNOWLEDGES THAT THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND THAT THE ISSUER HAS NOT REGISTERED AND WILL NOT REGISTER UNDER THE US INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE 'INVESTMENT COMPANY ACT'). THE HOLDER AGREES FOR THE BENEFIT OF THE ISSUER, ANY DISTRIBUTORS OR DEALERS AND ANY SUCH PERSONS' AFFILIATES THAT THESE SECURITIES MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT, THE INVESTMENT COMPANY ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND ONLY (1) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT TO A NON-US PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT, 'US PERSON') OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (PROVIDED THAT, IF SUCH TRANSFER PURSUANT TO THIS CLAUSE (2) IS TO A US PERSON, THE PURCHASER IS A QUALIFIED PURCHASER WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT), AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. THE HOLDER ACKNOWLEDGES THAT THE PURPOSE OF THE FOREGOING LIMITATION IS, IN PART, TO ENSURE THAT THE ISSUER IS NOT REQUIRED TO REGISTER UNDER THE INVESTMENT COMPANY ACT. Arbuthnot Securities Limited, which is authorised and regulated by the Financial Services Authority, is acting for the Company only and will not be responsible to any other person for providing the protections afforded to customers of Arbuthnot Securities Limited or for advising such person on the matters referred to in this announcement. This information is provided by RNS The company news service from the London Stock Exchange

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