for personal use only - australian securities exchange · the entitlement offer takes the form ......

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ASX RELEASE Wednesday, 22 September 2010

SPARK INFRASTRUCTURE REPOSITIONS FOR CAPITAL GROWTH

ANNOUNCES $295 MILLION ENTITLEMENT OFFER

Spark Infrastructure has today announced the outcome of its Strategic Review designed to position itself to take advantage of growth opportunities in the Asset Companies in which it holds a 49% interest – ETSA Utilities, CitiPower and Powercor. The Strategic Review was initiated by the Board which established a committee of Independent Directors to manage any potential conflicts of interest within the process and to regulate the flow of information as appropriate amongst the Board, the Independent Directors, the Asset Companies, Spark’s partners in the Asset Companies (CKI and Hong Kong Electric) and Spark Infrastructure’s Manager (owned by CKI and RREEF). All of the independent directors were members of this committee. The Board evaluated a number of options in relation to Spark Infrastructure’s capital structure, ownership structure and future funding needs aimed at maximising Securityholder value. Wherever CKI and/or RREEF directors were conflicted, only the independent directors participated in making the relevant decisions. Following completion of the Strategic Review and after careful consideration of the various options the Board announces a Repositioning of Spark Infrastructure consisting of:

- 2 for 7 Entitlement Offer of new stapled securities in Spark Infrastructure1 to raise $295 million of new capital, at an offer price of $1.00 per new security (Entitlement Offer). The Entitlement Offer takes the form of an accelerated non-renounceable rights issue and is fully underwritten; and

- restructure of Spark Infrastructure (subject to Securityholder, bank, regulatory and Court approvals) involving a simplification of the existing listed security structure from a five stapled security with four issuers to a listed dual stapled security with Spark Trust as the sole listed entity, and a reduction of the principal amount outstanding on the Loan Notes (Restructure).

“The Asset Companies are entering an exciting period of growth. The Australian Energy Regulator has approved capital expenditure over the next five years that will drive increased growth in their Regulatory Asset Bases, and correspondingly increased revenues” said Stephen Johns, Chairman of Spark Infrastructure. “Spark Infrastructure is shifting from a yield focused security to an investment offering solid distribution yield and increased capital growth via Spark Infrastructure’s equity investment in the Asset Companies Regulated Asset Bases. The change in the composition of the overall return to Securityholders should appeal to patient investors, with Spark Infrastructure’s return on investment in growth capital expenditure realised over the longer term.” “After the Repositioning we will operate with a capital structure that supports the significant organic growth in the regulated businesses over the coming five year regulatory period. The restructure, if approved by Securityholders, will also deliver a more transparent ownership structure and a more sustainable distribution profile supported by operating cashflows. This is in addition to the inherent stability and built in protections offered by the regulatory system which applies to the operations of our Asset Companies” added Mr Johns. “I am pleased to confirm that the Entitlement offer will receive support from the owners of the Manager. Both CKI and RREEF have indicated they will subscribe for their pro rata share of the Entitlement Offer” said Mr Johns.

1 Where fractions arise in the calculation of an Entitlement, the Entitlement will be rounded down to the nearest whole number of New Securities.

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2Highlights of Repositioning

• Stronger balance sheet with increased funding flexibility – proceeds of the Entitlement Offer will be used to reduce corporate debt ($200m), to fund equity investment in the Asset Companies ($85m) and to pay transaction costs ($10m)

• Long term growth in Spark Infrastructure’s equity investment in Asset Companies’ Regulatory Asset Bases which will grow as a result of increasing regulated capital expenditure

• More sustainable distributions with Loan Note interest obligations supported by operating cashflows • Solid distribution yield based on FY 2011 distribution guidance of 9.11 cents per security2 • Simpler and more transparent structure - dual stapled security with Spark Trust as the sole listed entity

Summary of key effects of Repositioning The following table summarises some of the key effects on Spark Infrastructure if the Entitlement Offer and Restructure both proceed. Repositioning Before After

Spark Infrastructure corporate debt (gross) $425 million $225 million

Look-through Gearing (net) 60.4% 54.4%

Standalone Gearing (gross) 18.1% 9.2%

Loan Note face value (per Security) $1.25 $0.65

Interest rate on Loan Notes 10.85% 10.85%

Loan Note interest obligation per annum (per Security) 13.56c 7.0c3

Distribution guidance (Full Year 2011 per Security) N/A 9.11c

Number of stapled securities (including Loan Note) 5 2

Financial statements produced by Spark Infrastructure 4 1

Key alternatives considered As announced previously to the market, an important objective of the Strategic Review was to assess whether Spark Infrastructure is appropriately valued in the listed market and whether greater value could be secured elsewhere. As part of the Strategic Review the Independent Directors conducted a thorough market testing process of a range of options, including consideration of full and partial sales of Spark Infrastructure and its 49% interests in the Asset Companies. Spark Infrastructure received a number of proposals including an indicative proposal for the Spark Infrastructure stapled group at a significant premium to current market price. The proposal was highly conditional, was subject to the outcome of the Regulator’s final determination for CitiPower and Powercor due on 30 October 2010, and involved a lengthy due diligence process. In the Independent Directors’ opinion these matters created significant execution and timing risks which were considered unacceptable. In addition, had the Independent Directors pursued this indicative offer, it would have reduced Spark Infrastructure’s options in relation to the restructure of the Loan Notes and simplification of the stapled group. Accordingly, after careful consideration, it is the Board’s view that the best available option for Securityholders is to proceed with the Repositioning of Spark Infrastructure which is now proposed. The Board notes that while it is recommending the Entitlement Offer and Restructure to Securityholders as the best alternative, in the normal course of its deliberations it is prepared to consider any superior proposal for maximising Securityholder value which may emerge either before or after the Restructure intended to be implemented in December 2010. 2 Guidance only. Distributions are not guaranteed. See sections 1.4, 11,and 12 of the Investor Information Booklet.

3 This represents the amount per security with the post Restructure Loan Note face value of $0.65.

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3 Directors announce distribution guidance4 The Board has announced distribution guidance for the second half of 2010 of around 5.6 cents per security. The distribution will be payable in March 2011.

The Board also provides distribution guidance for the 2011 year of 9.11 cents per security comprising 7.0 cents per security interest and 2.11 cents per security return of capital, made up of:

- Interim distribution of 4.50 cents per security for the first half, reflecting an annualised rate of 9.0 cents per security; and

- Final distribution of 4.61 cents per security for the second half, reflecting annualised growth of 2.5% on the first half distribution.

If the Restructure does not proceed there may be a deferral of the balance of the interest due on the Loan Notes for the relevant period. Spark Infrastructure only pays out distributions which are fully supported by operating cashflows. Operating cashflows are reviewed at both the Spark Infrastructure level as well as on a look-through proportionate basis, i.e. Spark Infrastructure’s 49% interest share of the Asset Companies relevant operating cashflows. Operating cashflows are calculated after deducting an allowance for maintaining the Asset Companies’ Regulatory Asset Bases. Distribution coverage by operating cashflows is assessed annually, while also taking into account the relevant 5-year regulatory period in which the Asset Companies are operating. Funding flexibility for the future The Directors expect to utilise the Distribution Reinvestment Plan to provide funding flexibility in the next regulatory period. Spark Infrastructure announced on 13 September 2010 that it had successfully syndicated its new $250 million debt facility package. This new facility will be used to repay Spark Infrastructure’s existing $225 million debt maturity due in December 2010, and comprises a 3-year revolving facility of $165 million and a 4-year term loan of $85 million. Following repayment of Spark Infrastructure’s remaining June 2011 debt maturity of $200 million from the proceeds of the Entitlement Offer, Spark Infrastructure will have no debt maturities until September 2013. This builds on the actions taken in 2009 to increase funding flexibility for the future. Repositioning to fund capital growth The three objectives of the Repositioning are:

• To strengthen Spark Infrastructure’s balance sheet and increase its financial flexibility to fund growth capital expenditure requirements. Initially this will be achieved through repayment of $200 million of corporate debt which follows on from the successful refinancing of Spark Infrastructure’s other debt facility with a new $250 million facility, as announced on 13 September 2010;

• To realign Spark Infrastructure’s Loan Note interest obligations with cashflows expected to be available from our operating businesses; and

• To simplify Spark Infrastructure’s ownership and stapled security structure. “Spark Infrastructure will use the funds raised from this offer, in part, to fund these capital expenditure requirements. Funding of this capital expenditure in line with the Australian Energy Regulator’s assumptions will lead to long term growth in Spark Infrastructure’s equity investment in the Asset Companies’ Regulatory Asset Bases, in which Securityholders are expected to indirectly benefit via their investment in Spark Infrastructure” said Mr Johns. The Regulatory Asset Base of the Asset Companies is expected to grow by 6.9%-9.2% per annum over the next five year regulatory periods. Specific projects already approved by the Regulator include the roll-out of AMI (Smart metering) across the CitiPower and Powercor networks involving $630 million of capital expenditure over four years

4 This is guidance and not a forecast. Actual distributions may vary.

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4to 2013, and $1.65 billion of capital expenditure in ETSA Utilities over the new five year regulatory period for asset replacement and to cater for expected growth in demand. The Asset Companies have indicated a desire to retain cash from operations to contribute to the funding of capital expenditure in the next regulatory period. Accordingly, Spark Infrastructure should benefit from an increasing equity investment in the Asset Companies’ Regulatory Asset Bases. For example, if net growth in the Regulated Asset Base (RAB) was assumed to be funded with 60% debt (as per the Regulator’s assumptions) Spark Infrastructure’s look-through proportionate debt to RAB ratio would reduce by over 5% across the next regulatory period and its equity investment in the Asset Companies’ RAB would grow by 14-18% per annum over the corresponding period. “After the Entitlement Offer, Spark Infrastructure does not expect to raise further monies from Securityholders to fund expected growth capital expenditure in the Asset Companies for at least three years, except for the expected reactivation of our Distribution Reinvestment Plan” added Mr Johns. Securityholders will vote on the Restructure Securityholders will be asked to vote on the proposed Restructure at meetings intended to be held in late November or early December 2010. The completion of the Entitlement Offer is not conditional on the Restructure being approved. The proposed Restructure involves:

- A partial reduction of the principal amount outstanding on the Loan Notes by $0.60 per security, with the amount repaid to be applied to the issue of additional Units to Securityholders. Effectively, that portion of the Loan Note principal will be converted from debt to equity in the Spark Trust. Securityholders will not receive cash. Following the Restructure, the Loan Notes will have a face value of $0.65 each and will carry a correspondingly reduced interest entitlement; and

- The simplification of the existing Spark Infrastructure ASX listed security from a five stapled security with four issuers to an ASX listed dual stapled security with Spark Trust as the sole listed entity.

Following the Restructure, Securityholders who are eligible to participate in the Restructure will continue to hold the same proportionate interest in Spark Infrastructure as they did prior to the Restructure. The interest rate for the Loan Note which is due to be reset on 30 November 2010 will be left unchanged at 10.85% for the next five years. Spark Infrastructure will remain externally managed As part of the Strategic Review, the Independent Board Committee considered internalisation of the management function. The conclusions they reached were that at present:

- Internalisation does not represent significant financial value for Securityholders; and - The likely costs associated with internalisation outweigh the disadvantages of the externally managed

structure. As a result, after the Repositioning, Spark Infrastructure will remain externally managed with Spark Infrastructure Management Limited continuing to provide management services. The Independent Directors will continue to give consideration to internalisation of the management function in the future subject to suitable commercial conditions. If an internalisation proposal emerges that the Independent Directors consider suitable, they will seek Securityholder approval at the appropriate time. Independent Expert Report and Boards recommendation The Independent Expert, Lonergan Edwards & Associates Limited, has concluded that the proposed Restructure is in the best interests of Securityholders. The Directors of Spark Infrastructure have indicated that they intend to unanimously recommend that Securityholders vote in favour of the Restructure, subject to no change of control proposal emerging which is superior to the Restructure and the Independent Expert not changing or withdrawing its conclusion. In addition to the Securityholder approvals, the Restructure is subject to a number of conditions precedent, including completion of the Entitlement Offer, Court approval and various ASIC and ASX waivers and confirmations. Accordingly, there are a number of potential outcomes for Securityholders depending on which initiatives proceed. The Entitlement Offer is not conditional upon the Restructure being implemented or approved by Securityholders.

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5Further Details An Investor Information Booklet has been released to the market and will be mailed to eligible Securityholders on 29 September 2010. It contains important information on the Entitlement Offer and the proposed Restructure to assist eligible Securityholders to decide whether to participate in the Entitlement Offer. It is intended that Notices of Meeting and an Explanatory Memorandum in relation to the Restructure will be sent to Securityholders in late October or early November 2010 following receipt of Court approval to convene the required meetings. Any questions about the Entitlement Offer should be directed to the Spark Infrastructure Securityholder Information Line on 1300 608 629 (toll free within Australia) or on +61 3 9415 4068 (from outside Australia) before the Final Retail Acceptance Date. Media enquiries: Mario Falchoni General Manager Investor Relations & Corporate Affairs DISCLAIMERS This document is issued by Spark Infrastructure. This document is not a prospectus, product disclosure document or other offering document under Australian law or under any other law. It has been prepared for information purposes only and is not an offer or invitation for the subscription or purchase of or recommendation of Spark Infrastructure stapled securities. The information in this document does not take into account the investment objectives, financial situation and particular needs of individual investors. It is not financial product advice and does not and will not form any part of any contract for the acquisition of Spark Infrastructure securities. Investors should obtain their own independent advice from a qualified financial advisor having regard to their objectives, financial situation and needs. Entities within the Spark Infrastructure group are not licensed to provide financial product advice.

No action has been taken to register or qualify the Spark Infrastructure stapled securities in any jurisdiction outside Australia or New Zealand. It is the responsibility of any investor to ensure compliance with the laws of any country (outside Australia and New Zealand) relevant to their securityholding in Spark Infrastructure. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any “U.S. person”. The Stapled Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, (the “Securities Act”) or the securities laws of any state of the United States. In addition, none of the Spark Infrastructure entities have been nor will be registered, under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”), in reliance on the exemption provided by Section 3(c)(7) thereof. Accordingly, the Stapled Securities cannot be held at any time by, or for the account or benefit of, any “U.S. person” (as defined in regulation S under the Securities Act) who is not both a “qualified institutional buyer” as defined under Rule 144A under the Securities Act (a “QIB”) and a “qualified purchaser” as defined in section 2(a)(51) of the Investment Company Act (a “QP”). Any U.S. person who is not both a QIB and a QP (or any investor who holds Stapled Securities for the account or benefit of any US person who is not both a QIB and a QP) is an "Excluded US Person“. Spark Infrastructure may require an investor to complete a statutory declaration as to whether they (or any person on whose account or benefit it holds Stapled Securities) are an Excluded US Person. Spark Infrastructure may treat any investor who does not comply with such a request as an Excluded US Person. Spark Infrastructure has the right to: (i) refuse to register a transfer of Stapled Securities to any Excluded U.S. Person; or (ii) require any Excluded US Person to dispose of their Stapled Securities; or (iii) if the Excluded US Person does not do so within 30 business days, require the Stapled Securities be sold by a nominee appointed by Spark. To monitor compliance with these foreign ownership restrictions, the ASX’s settlement facility operator (ASTC) has classified the Stapled Securities as Foreign Ownership Restricted financial products and put in place certain additional monitoring procedures. The New Securities may only be resold or transferred in regular brokered transactions on ASX in accordance with the Regulation S under the Securities Act where neither such investor nor any person acting on behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchasor is, in the United States or is acting for the account or benefit of a US person, in each case in an “offshore transaction” (as defined in Rule 902(h) under the Securities Act) in reliance on, and in compliance with, Regulation S under the Securities Act.

This document contains forward looking statements. Forward looking statements include those containing such words as “anticipate”, “estimates”, “will”, “should”, “could”, “may”, “expects”, “plans” or similar expressions. Indications of and guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are also forward looking statements. No representation or warranty is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections, prospects, returns, forward-looking statements or statements in relation to future matters contained in the information provided in this document. Such guidance, forecasts, projections, prospects, returns and statements are by their nature subject to significant unknown risks, uncertainties and contingencies, many of which are outside the control of Spark Infrastructure, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. An investment in Spark Infrastructure is subject to investment risk including possible loss of income and principal invested. Please refer to the Investor Information Booklet for risk factors.

The distribution guidance contained in this document is not a forecast. Actual distributions may vary. The current Loan Note interest obligation per security is 13.56 cents. This distribution guidance has been prepared by Spark Infrastructure. 9.11 cents comprises 7.00 cents Loan Note interest and 2.11 cents capital return on Units. It is not certain that this level of distributions will be achieved. Investors should read the Investor Information Booklet carefully, including Section 11 which sets out the key assumptions on which the distribution guidance is based, Section 1.3 concerning the Repositioning outcomes and Sections 1.4 and 12 which details risk factors.

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO PERSONS IN THE UNITED STATES

Phone: 02 9086 3607 Mobile: 0418 401 415

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SPARK INFRASTRUCTURESTRATEGIC REVIEW ANNOUNCEMENTWEDNESDAY, 22 SEPTEMBER 2010 1

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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2

PRESENTATION AGENDAWEDNESDAY, 22 SEPTEMBER 2010

• STRATEGIC REVIEW• INVESTMENT HIGHLIGHTS• ENTITLEMENT OFFER• RESTRUCTURE• KEY RISKS• CONCLUSION

IMPORTANT: Please read the disclaimer and securities warnings located at the end of this presentation together with the key risks and disadvantages (slides 26 and 27).

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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONSF

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STRATEGIC REVIEW

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STRATEGIC REVIEWBACKGROUND

In February 2010, Spark Infrastructure (“Spark”) announced a Strategic Review to consider its capital structure, ownership structure and future funding needs

The Boards put in place governance protocols and established a committee of Independent Directors to manage any potential conflicts of interest arising during the Strategic Review process

The Independent Directors conducted an extensive assessment of a wide range of options during the Strategic Review, with a focus on maximising Securityholder value. These included:

− changes in ownership and stapled security structure− changes in capital structure including equity and debt levels at the Spark level− full or partial sales of assets− internalisation of the management structure− change of control of Spark

The Strategic Review included discussions with a number of parties and consultation with key stakeholders

Spark received a number of proposals including an indicative proposal for the Spark Infrastructure stapled group at a significant premium to the current market price

− the proposal was highly conditional, was subject to the outcome of the Regulator’s final determination for CitiPower and Powercor and involved a lengthy due diligence process

− in the Independent Directors’ opinion these matters created significant execution and timing risks which were considered unacceptable

− had the Independent Directors pursued this indicative offer, it would have reduced Spark’s options in relation to the restructure of the Loan Notes and simplification of the stapled group

− after careful consideration, it is the Board’s view that the best available option for Securityholders is to proceed with the Repositioning of Spark which is now proposed

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OUTCOME OF STRATEGIC REVIEWREPOSITIONING

The Directors have announced a Repositioning of Spark to position it to take advantage of growth opportunities as it enters a period of increasing investment in the regulated capital expenditure of the Asset Companies - ETSA Utilities and CitiPower and Powercor (together “CHEDHA”)

The Repositioning includes two key elements:Entitlement Offer – a capital raising intended to raise $295 million in new capital by means of an underwritten accelerated non-renounceable entitlement offer (which is not conditional on the Restructure proceeding)Restructure – simplification of Spark’s ownership and stapled security structure and a reduction in the face value of Loan Notes held by Securityholders (subject to a number of conditions precedent, including Securityholder and Court approval)

The objectives of the Repositioning are to:Strengthen Spark’s balance sheet and increase Spark’s financial flexibility to fund growth capital expenditure requirementsRealign Spark’s Loan Note interest obligations with cashflows expected to be available from the Asset CompaniesSimplify Spark’s ownership and stapled security structure

Following assessment by the Independent Board Committee and an Independent Expert, the Directors of Spark have indicated that they intend to unanimously recommend that Securityholders vote in favour of the Restructure expected to be held in late November or early December 2010

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ALTERNATIVES CONSIDEREDWIDE RANGE OF OPTIONS EXTENSIVELY ASSESSED

INDEPENDENT BOARD COMMITTEE

Extensive market testing for sale of 49% interests in:

- ETSA Utilities

- CitiPower

- Powercor

Repositioning Corporate ActionsInternalisationAsset Sales

Pro

cess

Con

clus

ion Optimal long term value

realised at this stage through retention of interests

Entitlement Offer to reduce debt at Spark level and fund future investment to grow Regulatory Asset Base (RAB)

Restructure to create a simplified ownership and sustainable corporate and capital structure

Allows Securityholders to benefit from expectedsignificant organic growth in Asset Companies in coming regulatory periods

Considered best option tomaximise long term value to Securityholders

Realignment in relation to distributions

Extensive review of management structure

Consideration of Internalisation

Internalisation does not represent financial value for Securityholders at this time

Will continue to keep the matter under review

Engagement with a broad range of parties regarding potential transactions including a full acquisition of Spark

Given consideration of value, complexity, timing and risks, potential value outcomes were less attractive for Securityholders when compared with the Repositioning

Will continue to keep the matter under review

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INVESTMENT HIGHLIGHTS

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8

INVESTMENT HIGHLIGHTSOVERVIEW

High quality regulated monopoly assets with stable cash flows− Stable and predictable operating environment− Regulatory regime provides built in protections – inflation linked predictable cashflows − ETSA Utilities and CHEDHA deliver essential services to approximately 1.8 million customers

1

2

3

4

Assets well positioned for growth− Regulatory Asset Base (RAB) is expected to grow at 6.9-9.2%¹ per annum over the coming five year

regulatory periods with associated growth in revenues − Regulated revenues are further supplemented by unregulated business activity

Attractive investment metrics− Securityholders participating in the Entitlement Offer will be investing at an implied look-through

EV/RAB²³ of 0.91x and look-through EV / EBITDA of 6.2x²− FY 2011 distribution guidance of 9.114 cps reflects yield of 9.1% to offer price and includes 2.5%

annualised growth from 1H11 to 2H11− Spark’s equity investment in the Asset Companies’ RAB would grow by 14-18% per annum over

their next five year regulatory periods if expected net growth in RAB is 60% debt funded5

− Included in both the S&P/ASX 100 and S&P/ASX 200 indicesExperienced management team and manager− Spark’s management team has extensive infrastructure industry experience− ETSA, CitiPower and Powercor management teams each have extensive experience and a

demonstrated track record in delivering strong financial and operational performance1 Based on AER’s final determination for ETSA Utilities, draft determinations for CitiPower and Powercor, submissions from CHEDHA in response to the draft determination for CitiPower and Powercor and inclusion of AMI assets2 Based on the offer price of $1.003 EV adjusted by the proportion of regulated revenue as to total revenue4 Guidance only. Distributions are not guaranteed (see slide 36)5 Assuming growth in RAB including AMI over the coming regulatory periods is 60% debt funded in line with AER’s assumptions

Spark is shifting from a yield focused security to an investment offering distribution yield and capital growth in Asset Companies

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9

INVESTMENT HIGHLIGHTSHIGH QUALITY, REGULATED MONOPOLY ASSETS

9

$m $m

100120140160180200220240260

Net capital expenditure ($m)

HY 2008HY 2009HY 2010

500520540560580600620640660680

EBITDA ($m)

HY 2008HY 2009HY 2010

0

20

40

60

80

100

120

Unregulated revenue ($m)

HY 2008HY 2009HY 2010

$m

$108.7

$82.6

$120.7

$627.8

$538.1

$664.4

$186.2$181.0

$254.6

$m$m

020406080

100120140160180

Semi-regulated revenue ($m)

HY 2008HY 2009HY 2010

500550600650700750800850900

Total Revenue ($m)

HY 2008HY 2009HY 2010

500520540560580600620640660

Regulated revenue ($m)

HY 2008HY 2009HY 2010

$m

$889.6$880.4

$796.7

$569.6

$616.8$644.5 $154.9

$106.1

$162.5

Note: The 2008 and 2009 comparatives have been adjusted to reflect all metering revenue for CHEDHA as Regulated RevenueNote: See the slide titled “Disclaimer and Securities Warning” for definitions of, and disclosures regarding, certain non-GAAP financial measures included in this presentation.

100% OF ASSET COMPANIES’ TOTAL

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Regulated tariff

Actual volume

Actual Revenue

10

Regulated Asset Base

(RAB)

Weighted Average Cost of Capital

(WACC) 1

Depreciation2 Operating expenditure Tax

Regulated revenue(target)

Forecast volume

Regulated tariff

1. Based on 10 yr Commonwealth Treasury Note. Includes both an equity premium and a debt premium (BBB+/Baa1)

2. Depreciation based on regulated economic life of assets

3. X factor is currently +1.1 in Victoria (2005-10), and -5.75 in South Australia (2010-15) -a negative X factor results in an increase in prices above CPI

Well established, transparent regulatory process with resets every 5 years; CPI –X3 formula

RAB and Revenues are adjusted for inflation (inflation protected)

INVESTMENT HIGHLIGHTSREGULATORY FRAMEWORK – BUILT IN PROTECTIONS

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Spark Infrastructure’s Asset Companies (ETSA Utilities and CHEDHA) are entering an exciting period of growth

– significant increase in regulated capital expenditure

– corresponding strong growth in the Asset Companies’ RAB over the five year regulatory periods of 6.9-9.2% p.a. (including AMI)

– as the RAB increases, regulated revenues and operating cashflows will correspondingly increase

– greater relative returns than growth by acquisition as investment in existing regulated assets occurs at 1.0 times RAB (no acquisition premium) - Regulated Return on Equity of around 11% (11.09% ETSA final; 10.85% CHEDHA draft)

Spark’s return on investment in growth capital expenditure realised over the longer term, as the Asset Companies generate higher operating cash flows from the growing RAB

Regulated revenues are further supplemented by unregulated business activity

INVESTMENT HIGHLIGHTSASSETS WELL POSITIONED FOR GROWTH

The regulated business provides a stable platform for growth 11


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INVESTMENT HIGHLIGHTS ATTRACTIVE INVESTMENT METRICS

Metric

EV / RAB¹² 0.91x

EV/ EBITDA¹ 6.2x

Net debt / RAB (look through)3 84.5%

Book gearing (look through)3 54.4%

RAB growth (2011-2015 regulatory periods)

6.9-9.2%

Distribution capex (2005-2010 regulatory periods) – 2010 $

$2,298m

Distribution capex (2011-2015 regulatory periods) – 2010 $

$3,219m

Attractive valuationInvestors will be investing at an implied look-through EV / RAB ¹,² of 0.91x and look-through EV / EBITDA of 6.2x¹

Growing revenues Spark expects the Asset Companies will have attractive near-term growth in revenues because of the 6.9-9.2% p.a. expected growth in RAB

Attractive YieldFY11 distribution guidance4 of 9.11cps reflects solid yield of 9.1% to offer price, comprising 7.0cps interest and 2.11cps capital return on Units

Increasing equity ownershipSpark will benefit from an increasing equity investment in the Asset Companies’ RABAs an example, if net growth in RAB is 60% debt funded (as per AER’s assumptions) Spark’s look-through debt/RAB would reduce by over 5% and Spark’s equity investment in the Asset Companies’ RAB would grow by 14-18% p.a. over their next five year regulatory periods

ASX listed with good sector weightingSpark is currently included in both the S&P/ASX 100 and S&P/ASX 200 indices

1 Based on the offer price of $1.002 EV adjusted by the proportion of regulated revenue as to total revenue3 Post Entitlement Offer and repayment of Spark corporate debt4 Distributions are not guaranteed – refer to slide 36

12

Note: See the slide titled “Disclaimer and Securities Warning” for definitions of, and disclosures regarding, certain non-GAAP financial measures included in this presentation.


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13

ENTITLEMENT OFFER

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14

As a result of the Strategic Review, Spark has decided to pursue a Repositioning, which comprises an Entitlement Offer followed by a Restructure

The Entitlement Offer is a 2 for 7 accelerated non-renounceable entitlement offer of new stapled securities to raise $295m

− comprises an Institutional Entitlement Offer and Retail Entitlement Offer − funds will be used to reduce Spark’s corporate level debt, partially fund near term growth

capital expenditure and pay transaction costs

This Entitlement Offer is fully underwritten by Deutsche Bank AG, Sydney Branch and UBS AG, Australia Branch

Following the Entitlement Offer, Spark does not expect to raise further Securityholder monies to fund expected growth capital expenditure in the Asset Companies for a period of at least three years, except for the expected reactivation of its distribution reinvestment plan

ENTITLEMENT OFFER OVERVIEW

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Offer sources and uses

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Offer to raise $295m 2 for 7 accelerated non-renounceable entitlement offer to raise $295m

Fully underwritten by Deutsche Bank AG, Sydney Branch and UBS AG, Australia Branch

Institutional Entitlement Offer of approximately $165m

Retail Entitlement Offer of approximately $130m

Offer price of $1.0013% discount to 10-day VWAP as at 21 September 2010

13% discount to closing price on 21 September 2010

New securities at an implied EV/EBITDA of 6.2¹x and an implied EV/ RAB¹ ² of 0.91x

Distribution yield of 9.1% on offer price based on distribution guidance of 9.11cps for 2011

Note: See the slide titled “Disclaimer and Securities Warning” in relation to Distribution Guidance and for definitions of, and disclosures regarding, certain non-GAAP financial measures included in this presentation.

Sources of funds

Entitlement Offer $295m

Total sources of funds $295m

Uses of funds

Repayment of debt $200m

Cash retained to fund future growth capital expenditure $85m

Transaction costs $10m

Total uses of funds $295m

ENTITLEMENT OFFEROFFER OVERVIEW

15

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

1 Based on the offer price of $1.002 EV adjusted by the proportion of regulated revenue as to total revenue

For

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2H 2010 distribution

− distribution guidance¹ of around 5.6 cents per Security for 2H 2010, payable March 2011− new securities will rank equally with existing securities to this distribution

FY 2011 distribution guidance1

− distribution guidance for 2011 is 9.11 cents per Security, comprising 7.0 cps interest and 2.11cps capital returned

− an interim distribution guidance of 4.50 cents per Security for the first half, reflecting an annualised rate of 9.0 cents per Security; and

− a final distribution guidance of 4.61 cents per Security for the second half, reflecting annualised growth of 2.5% from the first half distribution

Distributions will continue to be fully supported by operating cashflows which are reviewed at both the Spark level, and on a look-through proportionate basis to the Asset Companies over the five year regulatory periods

ENTITLEMENT OFFER DISTRIBUTION GUIDANCE

16

1 Guidance only. Distributions are not guaranteed – refer to slide 36 and sections 1.4, 6, 11 and 12 of the Investor Information Booklet


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REPOSITIONINGNEW INVESTMENT PROPOSITION

• Stronger balance sheet with increased funding flexibility – proceeds of the Entitlement Offer will be used to reduce corporate debt ($200m), fund equity investment in the Asset Companies ($85m) and pay transaction costs ($10m)

• Long term growth in Spark’s equity investment in Asset Companies’ Regulatory Asset Bases which will grow as a result of increasing capital expenditure

• Loan Note interest aligned more closely to operating cashflows

• Solid distribution yield based on FY 2011 distribution guidance of 9.11 cents per security

• Simpler and more transparent structure

Prior to Repositioning Post Repositioning

Spark Infrastructure corporate debt (gross) $425 million $225 million

Look-through Gearing (net) 60.4% 54.4%

Standalone Gearing (gross) 18.1% 9.2%

Loan Note face value (per Security) $1.25 $0.65

Interest rate on Loan Notes 10.85% 10.85%

Loan Note interest obligation per annum (per Security) 13.56c 7.0c

Distribution guidance (Full Year 2011 per Security) (see slide 36) N/A 9.11c

Number of securities in staple (including Loan Note) 5 2

Financial statements produced by Spark Infrastructure 4 1

High quality regulated monopoly assets well positioned for growth 17


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Next Maturity

Spark Sep 2013

ETSA Utilities Apr 2013

CitiPower and Powercor Jun 2011

ENTITLEMENT OFFER SPARK DEBT MATURITY PROFILE(Refer to Appendix 4 for Asset Company debt maturity profiles)

Spark existing bank debt refinancing covered by underwritten commitments totalling $450 million with NAB and Westpac

New $250m facility was executed on 10 September 2010

Capital raising proceeds will be used to repay the $200m June 2011 existing debt maturity

No refinancing at the Spark level until September 2013

Spark Infrastructure corporate debt maturity profile

* Debt maturing in June 2011 will be repaid and cancelled following the Entitlement Offer 18


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RESTRUCTURE

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20

The Restructure includes a series of initiatives designed to:

− partially reduce the principal amount outstanding on the Loan Notes by $0.60 per security, through the issue of new units in the Spark Trust in consideration for partial repayment of the Loan Notes. Following the Restructure the Loan Note stapled with each security will have a face value of $0.65 and will carry an interest rate of 10.85% for the next 5 years; and

− simplify Spark’s ownership structure, from a five stapled security with four issuers to a dual stapled security structure with Spark Trust as the sole listed entity

The Restructure recognises the preference of investors for simpler and more transparent ownership and stapled security structures (“Top-hatting”)

The Restructure is conditional on a number of Securityholder, Court and regulatory approvals and on successful completion of the Entitlement Offer

− Spark Securityholders will be asked to vote on the Restructure at a meeting expected to be held in late November or early December 2010

RESTRUCTUREOVERVIEW

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1

2

REDUCE LOAN NOTE FACE VALUE Reduction in the principal amount outstanding on the Loan Notes held by Securityholders and consequently a reduction in the amount of Loan Note interest obligation in respect of each security

SIMPLIFY STAPLED SECURITY STRUCTURERestructure Spark such that all existing entities sit below Spark Trust. Securities will be simplified from a four issuer five stapled security to a single issuer with two stapled securities (i.e. Unit and Stapled Loan Note)

IMPACT ON SECURITYHOLDERSDesigned to more closely align interest obligations under the Loan Notes with operating cashflows

Reduces the risk that Spark may have to defer some or all of the interest accrued under the Loan Notes¹

Does not affect Securityholders economic interest in Spark group

Securityholders continue to be entitled to interest on Loan Notes and Unit distributions

Broader investor appeal through a simpler and more transparent ownership and stapled security structure

The existing rights of Securityholders to appoint directors to the Board will be preserved

RESTRUCTUREKEY STEPS

211 See Section 1.2 of the Investor Information Booklet for more detail on deferral and the adverse consequences that may follow


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Spark InternationalSpark Holdings 2Spark Holdings 1

Spark SA

CHEDHAETSA

Stapled security holders

Stapled security consists of Spark Trust Loan Notes. Spark Trust Units, shares in each of Spark Holdings 1 and Spark Holdings 2 and CHESS Depository Interest in Spark International

Loan notes: $1,290m @ 10.85%

49%

Spark Victoria

49%

Spark Trust

RESTRUCTURECURRENT CORPORATE STRUCTURE

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Spark InternationalSpark Holdings 2Spark Holdings 1

Spark SA

CHEDHAETSA

Stapled security holders

Stapled security consists of Spark Trust Loan Notes and Spark Trust Units

Loan notes: $863m @ 10.85%

49%

Spark Victoria

49%

Spark Trust

RESTRUCTUREFINAL CORPORATE STRUCTURE

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The Restructure is subject to various conditions including:

− successful completion of the Entitlement Offer

− Securityholder approvals expected to be voted on in late November or early December 2010

− Court approval

− ASIC and ASX waivers and confirmations

− Manager parties executing deed to preserve existing corporate governance arrangements

The Independent Expert, Lonergan Edwards & Associates Limited, has concluded that the Restructure is in the best interests of Securityholders

The Directors of Spark have indicated that they intend to unanimously recommend that Securityholders vote in favour of the Restructure in late November or early December 2010, subject to there being no change of control proposal emerging that is superior to the Restructure and the Independent Expert not changing or withdrawing its conclusion

The Entitlement Offer is not conditional on the Restructure

RESTRUCTURECONDITIONALITY, INDEPENDENT EXPERT’S REPORT AND RECOMMENDATIONS

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KEY RISKS

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KEY RISKS AND DISADVANTAGESENTITLEMENT OFFER

Key risks and disadvantages of the Entitlement OfferConditionality of Restructure

The Restructure is subject to a number of conditions all of which may not be satisfied resulting in the Restructure not proceeding

Heightened deferral risk If the Restructure does not proceed, there is a risk that distributions able to be supported in the future would be less than the interest accruing on the Loan Notes

If this occurred, there is a risk that part or all of the accrued interest may need to be Deferred. This would result in incremental interest costs for Spark Infrastructure and may have a range of adverse consequences for Securityholders¹

Consequences of current structure for capital raising

Raising capital heightens Deferral risk if the Restructure does not proceed, because the Entitlement Offer increases the aggregate principal of the Loan Notes on issue

If the Restructure does not proceed, the principal to be repaid on maturity and the interest accruing under the New Securities will be based on $1.25 per Security (which will be more than the amount received under the Entitlement Offer)

General risks There are a number of risks and uncertainties, some specific to Spark Infrastructure and others of a more general nature thatmay affect financial performance, financial position, distributions and the trading price of Securities on the ASX

There can be no assurance that Securities will trade at or above the Offer Price or as to liquidity of trading or that any distribution will be paid, or if paid, will be consistent with past distributions or with any distribution guidance

Other disadvantages Voting and distribution rights of Securityholders who do not take up their full entitlement will be diluted

Transaction costs incurred as part of the Entitlement Offer

Potential for base management fees to the Manager to increase to the extent Spark Infrastructure’s Enterprise Value increases as a result of the Repositioning. Spark Infrastructure intends to use most of the Entitlement Offer proceeds to reduce Spark Infrastructure debt and therefore this is not expected to have a material impact

Securityholders should refer to the Investor Information Booklet for a further discussion of the key risks relating to the Repositioning initiatives including risks specific to the Entitlement Offer, Restructure and risks relating to Spark Infrastructure generally (including Sections 1.4 and 12)

26

1 See Section 1.2 of the Investor Information Booklet 1 See Section 1.2 of the Investor Information Booklet


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KEY RISKS AND DISADVANTAGESRESTRUCTURE

Key risks and disadvantages of the RestructureConditionality of Restructure

The Restructure is subject to a number of conditions all of which may not be satisfied resulting in the Restructure not proceeding. See Section 1.3 of the Investor Information Booklet for the main outcomes, consequences and the implications of the Restructure not proceeding

No guarantee of distributions or higher security price

While the Restructure is designed to realign Spark Infrastructure’s Loan Note interest obligations with cashflows expected tobe available from the Asset Companies, as distributions are not assured, there can be no guarantee that this outcome will be achieved. Distributions or growth in distributions is not guaranteed

Similarly, as the market price at which the Securities trade may fluctuate there can be no guarantee or assurance that any capital growth will translate into a higher price at which the Securities trade

Tax consequences The Restructure may have a number of tax consequences for Spark Infrastructure, including accelerating the point in time at which entities in the Spark Infrastructure group become subject to paying tax

If the Restructure proceeds, there is a risk that Spark Trust may be taxed as a company in the future if it were to acquire new businesses. If this occurs, Spark Infrastructure would assess the implications for Securityholders at that time, including the impact on the distribution profile of Spark Trust

Other disadvantages Ineligible Overseas Securityholders will have their complete holding of Securities sold through a nominee sale process

Transaction costs incurred as part of the Restructure

Securityholders should refer to the Investor Information Booklet for a further discussion of the key risks relating to the Repositioning initiatives including risks specific to the Entitlement Offer, Restructure and risks relating to Spark Infrastructure generally (including Sections 1.4 and 12)

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CONCLUSION

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ENTITLEMENT OFFERThe Entitlement Offer is intended to raise $295m by means of an underwritten accelerated non-renounceable entitlement offer to existing Securityholders

Proceeds will be used to:− reduce debt at the Spark level− fund future near term capital expenditure

requirements in the Asset Companies− pay transaction costs

An Investor Information Booklet will be distributed on or around 30 September to Securityholders on the register at the Record Date of 7pm (Sydney time) 27 September

BENEFITSStrengthening Spark’s balance sheet through a reduction in Spark debt

Improved financial flexibility to meet capital expenditure. Part proceeds to fund investment in growth capital expenditure in the Asset Companies

Following the Entitlement Offer, Spark does not expect to raise further securityholder monies to fund expected growth capital expenditure in the Asset Companies for a period of at least three years, except for the expected reactivation of its distribution reinvestment plan

No Spark debt maturities until September 2013

RESTRUCTURE“Top Hat” such that the Spark Trust becomes the parent entity of the Spark Group – stapled security becomes a unit in the Trust plus a Loan Note

Reduce the Loan Note face value stapled with each security and associated interest obligation

Issue of new units in Spark Infrastructure Trust to existing Securityholders in consideration for partial repayment of Loan Notes

The proposal is subject to a number of conditions, including Spark Securityholder and Court approval and various ASIC and ASX determinations

BENEFITSCreates a simpler and more transparent ownership and stapled security structure

Realigns Spark’s Loan Note interest obligations with cashflows expected to be available from the Asset Companies

Reduces the risk that Spark may have to defer some or all of the interest accrued under the Loan Notes in future periods

Reduces risk of adverse consequences of deferral (see Section 1.2 of the Investor Information Booklet)

29

REPOSITIONINGSIMPLER, SUSTAINABLE AND MORE TRANSPARENT

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Repositioning timetableInstitutional Entitlement Offer 22 to 23 September 2010

Record Date for the Entitlement Offer 7:00pm (Sydney time) 27 September 2010

Retail Entitlement Offer opens 30 September 2010

Last date for Eligible Retail Securityholders to lodge an Application to be allotted New Securities at the same time as Eligible Institutional Securityholders under the Institutional Entitlement Offer (Initial Retail Acceptance Date)

5:00pm (Sydney time) 6 October 2010

Settlement of applications under the Institutional Entitlement Offer and under the Entitlement Offer for which valid Applications have been received by Initial Retail Acceptance Date

8 October 2010

Allotment of New Securities issued under the Institutional Entitlement Offer and under the Retail Entitlement Offer for which valid Applications have been received by Initial Retail Acceptance Date (Initial Allotment Date)

11 October 2010

Expected date for trading of New Securities allotted under the Initial Allotment 11 October 2010

Despatch of holding statements in relation to Initial Allotment 11 October 2010

Retail Entitlement Offer closes (Final Retail Acceptance Date) 5:00pm (Sydney time) 21 October 2010

Final settlement of New Securities under the Retail Entitlement Offer not already allotted under the Initial Allotment

28 October 2010

Final allotment of New Securities under the Retail Entitlement Offer not already allotted under Initial Allotment (Final Allotment Date)

29 October 2010

Expected date for trading of New Securities allotted under the Final Allotment 1 November 2010

Despatch of holding statements in relation to Final Allotment 1 November 2010

Court hearing to consider approving Spark Infrastructure convening Securityholder meetings November 2010

Despatch of Notice of Meeting and Explanatory Memorandum for Restructure Late October or early November 2010

Securityholder meetings to consider the Restructure Late November or early December 2010

Proposed completion of the Restructure (subject to receipt of Court approvals to the Schemes and other conditions)

December 2010

REPOSITIONINGREPOSITIONING TIMETABLE

30Note: This timetable is indicative only and subject to change without notice


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FURTHER INFORMATION

FOR FURTHER INFORMATION PLEASE CONTACT:

Mario FalchoniGeneral Manager, Investor Relations and Corporate AffairsSpark Infrastructure

P: + 61 2 9086 3607F: + 61 2 9086 [email protected]

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ENTITLEMENT OFFER PRO-FORMA INCOME STATEMENT – APPENDIX 1

(A$m) 2009AAdj. for

Entitlement OfferAdj. for

Restructure 2009PF 1H10Adj. for


Restructure 1H10PFIncome from associates - Share of equity profits 197.5 197.5 105.6 105.6- Interest income 83.5 83.5 40.3 40.3Other income – interest 2.3 2.3 2.5 2.5

Total income 283.3 283.3 148.4 148.4Management fee (7.9) (7.9) (4.1) (4.1)Interest expense – other (29.2) 12.7 (16.5) (13.8) 6.4 (7.4)General and administrative expenses (4.8) (4.8) (4.2) (4.2)Profit before Income Tax, Loan notes interest

241.4 254.1 126.3 132.7

Interest expense – Loan notes (138.4) (40.0) 86.4 (92.0) (69.4) (20.0) 43.2 (46.2)Profit before Income Tax expense 103.0 (27.3) 86.4 162.1 56.9 (13.6) 43.2 86.5Income tax benefit/(expense) 19.5 8.2 (25.9) 1.8 (3.2) 4.1 (13.0) (12.1)Net profit 122.5 (19.1) 60.5 163.9 53.7 (9.5) 30.2 74.4

Pro-forma adjustmentsEntitlement Offer:

Interest on repayment of current interest bearing liabilitiesadjustment has been made to reduce the interest expense for year ended 31 December 2009 by $12.7 million and for the half year ended 30 June 2010 by $6.4 million based on an interest rate of 6.35%. A pro-forma adjustment has also been made to reflect the associated income taxno adjustment made for interest income on the remaining net proceeds of $84.8m

Interest on new Loan Notes issuedadjustment made to reflect the interest expense on the increased number of Loan Notes for the year ended 31 December 2009 of $40.0 million and for the half year ended 30 June 2010 of $20.0 million, based on the principal prior to the Restructure of $1.25. A pro forma adjustment has been made to reflect assumed income tax

Restructure:Interest on partial repayment of Loan Notes

adjustment made to reduce interest expense on the Loan Notes for the year ended 31 December 2009 by $86.4 million and for the half year ended 30 June 2010 by $43.2 million, due to reduction in principal under the Restructure from $1.25 to $0.65 per Loan Note

Management fees and other operating costsAdjustments considered immaterial and have not been included within the Pro-forma Historical Income Statement Information 32


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Pro-forma adjustments

Entitlement Offer:

Issue of New Securities to existing Securityholders prior to the Restructure to the value of $294.8m. The entire value is attributed to the Loan Notes

$200m of the proceeds raised from the Entitlement Offer used to pay down current interest bearing liabilities, with the balance of $84.8m reflected in cash and cash equivalents

Issue costs of $10m recorded as a reduction to the New Securities issued and therefore netted against Loan Notes attributable to Securityholders

Refinancing:

No pro-forma adjustments have been included in respect of Spark Infrastructure’s debt refinancing which was finalised during September 2010

Simplification of stapled structure:

Under the simplification, Spark Trust is to become the parent entity of the Group with Spark Holdings 1, Spark Holdings 2 and Spark International becoming subsidiaries

A pro-forma adjustment has been made to reclassify the equity components of the Group removing the minority interests

Partial repayment of Loan notes:

Units in Spark Trust are issued as consideration for the partial repayment of Loan Notes down to $0.65 per Loan Note

A pro-forma adjustment has been made to reduce the Loan Note liability by $702.1m with a corresponding increase in equity

ENTITLEMENT OFFER PRO-FORMA BALANCE SHEET – APPENDIX 2

Adjustment for RestructureProforma historical balance sheet as at 30 June 2010 (A$m) 2010A

Adj. for Entitlement

Offer

Simplification of Stapled

Structure

Partial repayment of Loan Notes 2010 PF

Current AssetsCash & Cash equivalents 87.7 84.8 172.5Receivables from associates 11.3 11.3Other current assets 1.1 1.1Non-current assets Investments in associates:- equity accounted 1,545.0 1,545.0- loans to associates 758.7 758.7Total assets 2,403.8 84.8 2,488.6Current liabilities Payables 5.4 5.4Loan Notes interest payable 69.3 69.3Interest bearing liabilities 425.0 (200.0) 225.0Other financial liabilities 2.0 2.0Non-current liabilities Loan Notes attributable to Securityholders

1,256.8 284.8 (702.1) 839.5

Deferred tax liabilities 11.5 11.5Total liabilities 1,770.0 84.8 (702.1) 1,152.7Equity 633.8 - 702.1 1,335.9Attributable to Parent Entity - Issued capital 183.0 246.8 702.1 1,131.9- Reserves (6.6) 14.2 7.6- Retained earnings 39.4 157.0 196.4Attributable to minority interests- Issued capital 246.8 (246.8) —- Reserves 14.2 (14.2) —- Retained earnings 157.0 (157.0) —Total equity 633.8 — — 702.1 1,335.9 33


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ENTITLEMENT OFFER PRO-FORMA CASH FLOW STATEMENT – APPENDIX 3

(A$m) 2009AAdj. for


Restructure 2009PF 1H10Adj. for


Restructure 1H10PFDistributions from associated – PPC 69.6 69.6 34.3 34.3Dividend received – associates 33.2 33.2 1.0 1.0Interest received – associates 85.4 85.4 27.4 27.4Interest received – other 2.4 2.4 2.3 2.3Interest paid – other (27.3) 12.7 (14.6) (13.7) 6.4 (7.3)Management fees (7.7) (7.7) (4.3) (4.3)Other income / (expenses) (5.4) (5.4) (3.4) (3.4)

Net cash — operating activities 150.2 12.7 162.9 43.6 6.4 50.0Repayment of borrowings from associates 46.8 46.8 0.3 0.3

Net cash inflow — investing activities 46.8 46.8 0.3 0.3Proceeds from issue of loan notes 25.2 25.2 — —

Distribution to Stapled Securityholders- loan note interest (136.9) 46.4 (90.5) (70.6) 23.2 (47.4)- capital distribution (24.3) (46.4) (70.7) — (23.2) (23.2)Net cash outflow — financing activities (136.0) — (136.0) (70.6) — (70.6)Net increase/(decrease) in cash 61.0 12.7 73.7 (26.7) 6.4 (20.3)

Net cash at beginning of fin. year 53.3 53.3 114.3 114.3Cash at end of the financial year 114.3 12.7 127.0 87.6 6.4 94.0

Pro-forma adjustmentsEntitlement Offer:

Interest on repayment of current interest bearing liabilities

adjustment made to reduce the interest payable on the current interest bearing liabilities for the year ended 31 December 2009 by $12.7 million and for the half year ended 30 June 2010 by $6.4 million based on an interest rate of 6.35%

Interest on new Loan Notes issued

adjustment made to reflect the interest expense on the increased number of Loan Notes for the year ended 31 December 2009 of $46.4 million and for the half year ended 30 June 2010 of $23.2 million, based on the principal prior to the Restructure of $1.25

Restructure:Interest on partial repayment of Loan Notes

adjustment reflecting additional interest payable on New Securities issued offset by lower interest payable on the reduced Loan Note principal

adjustments assume that the total distributions to Securityholders for the year ended 31 December 2009 and half year ended 30 June 2010 remain unchanged34


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ASSET COMPANIES’ DEBT MATURITY PROFILESAPPENDIX 4

35-

100

200

300

400

500

600

700

Jun 11 Feb 13 Sep 14 Nov 14 Jul 15 Nov 15 Sep 16 Oct 16 Nov 16 Jul 17 Apr 18 Sep 19 Oct 19 Aug 21 Jan 22

Capital markets debt maturity profile

Asset Level

20 -

225

5 -

10

175 225 145

25

25

35 -

40

-

-

-

50

100

150

200

250

300

Dec 10 Jun 11 Jul 11 Aug 11 Nov 11 Jul 12 Feb 13 Apr 13

$Am

(100

%)

Maturity

Bank debt and working capital debt maturity profile

Undrawn

Drawn bank

$Am

(100

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DISCLAIMER AND SECURITIES WARNING

No offer or invitation.This presentation is not an offer or invitation for subscription or purchase of or a recommendation to purchase securities or financial product.

Not a prospectus or product disclosure statement. This presentation is not a prospectus, product disclosure document or other offering document under Australian law or under any other law. It has been prepared for information purposes only.

No financial product advice.This presentation contains general summary information only and does not take into account the investment objectives, financial situation and particular needs of individual investors. It is not financial product advice and does not and will not form any part of any contract for the acquisition of Spark Infrastructure securities. Investors should obtain their own independent advice from a qualified financial advisor having regard to their objectives, financial situation and needs. Entities within the Spark Infrastructure group are not licensed to provide financial product advice.

Summary information.This summary has been prepared by Spark Infrastructure and is based on information available to them. The pro forma financial information provided in this summary is for illustrative purposes only and is not represented as being indicative of Spark Infrastructure’s views on its future financial condition and/or performance. The historical information in this summary is, or is based upon, information that has been released to the market. The information in this presentation does not purport to be complete or contain all the information which would be required in a prospectus or product disclosure statement if prepared in accordance with the requirements of the Corporations 2001 (Cth). The information is subject to change without notice. Spark Infrastructure reserves the right to withdraw or vary the timetable for the Repositioning without notice. It should be read in conjunction with Spark Infrastructure’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au including the Investor Information Booklet lodged with the ASX by Spark Infrastructure on the date of this summary.

Distribution guidance. If the Restructure proceeds distributions in accordance with the guidance will satisfy the post Restructure interest obligations on the Loan Notes. If the Restructure does not proceed the distribution is likely to comprise Loan Note interest only and there may be a Deferral of the balance of the interest for the relevant period (refer to Sections 1.2, 1.4 and 12.2 of the Investor Information Booklet for further details on consequences and risks and disadvantages of a potential Deferral).

In particular, this information is guidance and not a forecast. Actual distributions may vary. The current Loan Note interest obligation per Security is 13.56c. This distribution guidance has been prepared by Spark Infrastructure. It is not certain that this level of distributions will be achieved. Investors should carefully read the Investor Information Booklet, including Section 11 which sets out the key assumptions on which the distribution guidance is based, Section 1.3 concerning the Repositioning outcomes and Sections 1.4 and 12 which detail the risk factors.

Risks. An investment in Spark Infrastructure is subject to investment risk including possible loss of income and principal invested. Please refer to risk factors on pages 26 and 27 of this presentation and Sections 1.4 and 12 of the Investor Information Booklet for further details.

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http://www.asx.com.au/


U.S. ownership restrictions.This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any “U.S. person”. The Stapled Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, (the “Securities Act”) or the securities laws of any state of the United States. In addition, none of the Spark Infrastructure entities have been nor will be registered, under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”), in reliance on the exemption provided by Section 3(c)(7) thereof. Accordingly, the Stapled Securities cannot be held at any time by, or for the account or benefit of, any “U.S. person” (as defined in regulation S under the Securities Act) who is not both a “qualified institutional buyer” as defined under Rule 144A under the Securities Act (a “QIB”) and a “qualified purchaser” as defined in section 2(a)(51) of the Investment Company Act (a “QP”). Any U.S. person who is not both a QIB and a QP (or any investor who holds Stapled Securities for the account or benefit of any US person who is not both a QIB and a QP) is an "Excluded US Person“. Spark Infrastructure may require an investor to complete a statutory declaration as to whether they (or any person on whose account or benefit it holds Stapled Securities) are an Excluded US Person. Spark Infrastructure may treat any investor who does not comply with such a request as an Excluded US Person. Spark Infrastructure has the right to: (i) refuse to register a transfer of Stapled Securities to any Excluded U.S. Person; or (ii) require any Excluded US Person to dispose of their Stapled Securities; or (iii) if the Excluded US Person does not do so within 30 business days, require the Stapled Securities be sold by a nominee appointed by Spark. To monitor compliance with these foreign ownership restrictions, the ASX’s settlement facility operator (ASTC) has classified the Stapled Securities as Foreign Ownership Restricted financial products and put in place certain additional monitoring procedures. The New Securities may only be resold or transferred in regular brokered transactions on ASX in accordance with the Regulation S under the Securities Act where neither such investor nor any person acting on behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchasor is, in the United States or is acting for the account or benefit of a US person, in each case in an “offshore transaction” (as defined in Rule 902(h) under the Securities Act) in reliance on, and in compliance with, Regulation S under the Securities Act.

Non-GAAP Financial Measures.Investors should be aware that certain financial data included in this Presentation are “non-GAAP financial measures” under Regulation G under the U.S. Exchange Act of 1934. These measures include, on a historical and a pro-forma basis:• EBITDA, which is Spark Infrastructure’s earnings before interest, tax, depreciation and amortization, each component of which is calculated in accordance with

AIFRS;• Regulatory Asset Base (“RAB”), which is Spark Infrastructure’s Regulatory Asset Base, which is published on the Australian Energy Regulator website

annually http://www.aer.gov.au for ETSA, CitiPower and Powercor;• Enterprise value (“EV”), which is used to calculate management fees payable in respect of Spark Infrastructure and is calculated as the offer price multiplied

by the number of Securities outstanding plus external borrowings of Spark Infrastructure;• EV/EBITDA, which is Spark Infrastructure’s enterprise value divided by EBITDA, in each case as calculated as described above;• EV / RAB, which is Spark Infrastructure’s enterprise value divided by its Regulatory Asset Base, in each case as calculated as described above and as adjusted for the

proportion of regulated revenues as to total revenues; and• Net Capital Expenditures, which is gross capital expenditure minus customer contributions;• Net Debt / RAB, which is Spark Infrastructure’s total debt less cash, in each case as calculated in accordance with AIFRS, divided by its Regulatory Asset

Base, as calculated as described above.• Spark Infrastructure believes that the non-GAAP measures presented in this presentation provide useful information regarding Spark Infrastructure, but should

not be considered an indication of, or alternative to, profit from continuing operations after income tax as an indicator of operating performance or as an alternative to cash flows from operating activities as a measure of liquidity, in each case determined in accordance with Australian Accounting Standards.

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http://www.aer.gov.au/


Foreign jurisdictions. No action has been taken to register or qualify the Stapled Securities in any jurisdiction outside Australia or New Zealand. It is theresponsibility of any investor to ensure compliance with the laws of any country (outside Australia) relevant to their securityholding in Spark Infrastructure.

No liability.No representation or warranty, express or implied, is made in relation to the fairness, accuracy or completeness of the information, opinions and conclusions expressed in the course of this presentation. To the maximum extent permitted by law, each of Spark Infrastructure, all of its related bodies corporate and their representatives, officers, employees, agents and advisors do not accept any responsibility or liability (including without limitation any liability arising from negligence on the part of any person) for any direct, indirect or consequential loss or damage suffered by any person, as a result of or in connection with this presentation or any action taken by you on the basis of the information, opinions or conclusions expressed in the course of thispresentation. You must make your own independent assessment of the information and in respect of any action taken on the basis of the information and seek your own independent professional advice where appropriate.

No authorisation. None of the Joint Lead Managers, nor any of their respective affiliates, officers, employees, agents, advisers and intermediaries, nor Spark Infrastructure’s advisers and intermediaries nor any other person named in the Investor Information Booklet or this presentation other than Spark Infrastructure, have authorised or caused the issue, submission, despatch or provision of the Investor Information Booklet or this presentation and, except to the extent referred to in this presentation, none of them makes or purports to make any statement in this presentation and there is no statement in this presentation which is based on any statement by any of them.

Forward looking statements.This presentation contains forward looking statements. Forward looking statements include those containing such words as “anticipate”, “estimates”, “will”, “should”, “could”, “may”, “expects”, “plans” or similar expressions. Indications of and guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are also forward looking statements. No representation or warranty is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections, prospects, returns, forward-looking statements or statements in relation to future matters contained in the information provided in this presentation. Such forecasts, projections, prospects, returns and statements are by their nature subject to significant unknown risks, uncertainties and contingencies, many of which are outside the control of Spark Infrastructure, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

No guarantee. An investment in Spark Infrastructure is subject to investment risk including possible loss of income and principal invested. Please refer to risk factors on pages 26 and 27 of this presentation and Sections 1.4 and 12 of the Investor Information Booklet for further details.

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