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TrustPower Share Buy-Back

24 Oct 2003

In accordance with Listing Rule 10.1.1, TrustPower Limited ("TrustPower") wishes to notify the market that the directors of TrustPower have resolved to undertake a return of capital to shareholders by way of a court ordered buy-back of a proportion of each shareholder's shares.

The total amount of the return of the capital will be no less than $85 million. It may be increased slightly to comply with certain tax requirements. It is expected that the buy-back will take place during the first quarter of the 2005 financial year, at which time the appropriate number of each shareholder's shares will be repurchased.

The buy-back will be conditional on the number of matters, including:
(a) approval by the shareholders of TrustPower;
(b) approval of the High Court; and
(c) approval of the Commissioner of Inland Revenue as to the tax treatment of the buy-back.

TrustPower expects that the amount distributed will be treated as a dividend for New Zealand tax purposes only to the extent that it exceeds $66.2 million. TrustPower expects that the dividend portion will carry full imputation credits.

The purpose of the buy-back is to increase the rate of return to shareholders from their investment in TrustPower by increasing the company's ratio of debt to assets ("gearing"). Since the Company's sale of its lines business in 1999, the Company has been under-geared. This was only partially addressed by the buy-back of shares in June this year, made pursuant to the Company's pro-rata buy-back offer.

In making the decision to return further capital to the shareholders, the directors have taken into account the Company's future prospects, including some promising opportunities for development of additional generation assets. The directors consider the Company will have adequate resources after the return of capital to complete any appropriate developments.

Further details of the proposed buy-back will be given to shareholders with the notice of meeting called to approve the buy-back.

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