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New deal for Tower shareholders

Tuesday 1st July 2003

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Tower intends to raise $210.8 million through a fully underwritten pro rata renounceable 4 for 3 Rights Issue at an issue price of $0.90 per share.

This capital raising replaces the previous capital raising proposal which comprised a placement of shares to Guinness Peat Group plc (GPG) and a pro rata renounceable 3 for 5 Rights Issue fully underwritten by GPG.

The Directors obtained advice from Grant Samuel as to the relative merits of the two proposals. Grant Samuel's conclusion was: "In Grant Samuel's opinion the over-riding benefit of the Alternative Recapitalisation proposal is that it allows all shareholders to participate in the recapitalisation on an equal basis. Directors will need to consider whether the impact of extra fees of approximately 2 cents per share
outweigh this benefit. Subject to the confirmation of the final
underwriting arrangements and the removal of the remaining conditionality,

Grant Samuel believes that the Alternative Recapitalisation is a preferred alternative."

The independent Directors of Tower's board considered the terms of the alternative capital raising proposal and the Grant Samuel advice and determined that the alternative proposal is preferred to the previous proposal.

The key reasons for the directors view are:
- The alternative proposal is fairer to all shareholders (allowing all shareholders to participate on an equal basis) and avoids the potential dilution shareholders would face as a result of the placement of shares at a discount to market.

- The alternative proposal became more certain than the previous proposal.

The record date for calculating the rights entitlement will be 11 July 2003 and Tower expects the offer to open shortly afterwards.

An Offer Document will be made available when the Shares are offered.

Tower shares will not be trading ex-rights on the ASX following the resumption of trading. Details of the new ex-rights dates and other details on timing will be provided soon.

Underwriting First NZ Capital Securities and Credit Suisse First Boston Australia Limited have offered to underwrite the Rights Issue with a number of institutions sub underwriting the issue. The offer to underwrite does not require shareholder approval, is irrevocable and is open until 4 July 2003.
The underwriting fee will be 2.75% plus a management fee of 0.5%.

GPG has confirmed it will exercise its right to underwrite this alternative proposal on the same terms. Tower is holding discussions with GPG to ascertain whether this is feasible and achievable within the timeframe required.

Cancellation of Previous Proposal
The proposed 3 for 5 Rights Issue, which was to have been fully underwritten by GPG, has been cancelled.

The proposal to place 50 million shares to GPG at NZ$1.35 per share has been withdrawn with GPG's agreement.
Special Shareholder Meeting - 4 July 2003
The Special Meeting of Shareholders scheduled for Friday 4 July 2003 will be proceeding.

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