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Blue Chip announce rights issue for existing shareholders

Media release

Tuesday 1st March 2005

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Blue Chip New Zealand announced today that it proposes to offer each New Zealand shareholder an entitlement to subscribe for additional shares at $1.00 per share, up to a maximum of 5,000 shares.

Chairman Jock Irvine said that following the reverse takeover of Newcall Group Limited in July 2004, many former Newcall shareholders ended up with very small shareholdings in Blue Chip. "This offer provides existing shareholders with the opportunity to own a meaningful parcel of shares and promotes a more active trading environment," he said.

The board of directors is of the view that the long-term interests of Blue Chip shareholders are served by a much more active market for Blue Chip shares. It intends to implement strategies to promote liquidity in the shares that will also build its capital base to take advantage of further rewarding opportunities.

Last week Blue Chip announced revenue for the six months to 31 December 2004 of $20.5 million and net profit after tax (NPAT) of $4.8 million, reflecting a buoyant first six months as a listed company.

On an annualised basis, revenue would double to $41 million and NPAT would double to $9.6 million.

In 2005 Blue Chip plans to expand significantly by creating comprehensive distribution networks, expanding and diversifying revenue streams and maximising opportunities for growth.

The rights issue consists of an entitlement to subscribe for fully paid-up ordinary new shares up to a maximum of 5,000 shares per shareholder registered on 14 March 2005. The offer is non-renounceable and may be accepted in part, with a minimum subscription of 1,000 new shares and multiples of 500 thereafter.

An investment statement will be mailed to all New Zealand-based shareholders on 16 March 2005 and the rights issue period will commence on 17 March 2005 and conclude on 15 April 2005

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