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The New Zealand Refining Company Limited (NZX: NZR) NZ announces equity raising

Monday 29th November 2021

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The New Zealand Refining Company Limited, to be renamed Channel Infrastructure NZ Limited (Channel Infrastructure) upon commencement of import terminal operations from April 2022, announces that it plans to raise approximately NZ$43.5 million to fund Private Storage Services.

On 22 November 2021, the Company announced that it had executed long-term agreements to provide dedicated private storage to grow Channel Infrastructure beyond the shared Import Terminal System (ITS), with further opportunities under negotiation.

Private storage is a complementary growth opportunity, which provides customers with increased product supply scale and flexibility. The contracted private storage capacity will require an initial capital commitment of c.$30 million, and is expected to result in incremental revenue of c.$50 million (real) on a fixed rental basis over a 10 year term, with high EBITDA conversion. This capacity will be progressively made available following required works from the commencement of terminal operations through to early 2023.

Management is actively engaged with customers on additional private storage opportunities which could require a further capital investment of up to c.$25 million and deliver additional revenue of up to c.$60 million (real) over a 10-year term. The Company is working to agree these additional private storage services prior to the commencement date of ITS services under the Terminal Services Agreements.

The planned NZ$43.5 million equity raise will be used to fund contracted Private Storage Services and those under negotiation.

Capital Raising

Refining NZ will undertake the equity raise through an underwritten NZ$38.5 million placement of new shares (Placement) and a non-underwritten $5 million Share Purchase Plan (SPP), with the ability to accept oversubscriptions at Refinery NZ’s discretion (the Offer).

The $38.5 million Placement will be conducted during the course of today. The approximately 47.0 million new shares to be issued under the Placement will be issued at a price to be determined throughout the bookbuild process today, subject to an underwritten floor price of $0.82 per share. A trading halt has been granted by NZX to facilitate the Placement.

The underwritten floor price represents a discount of:

• 6.8% to the last close on 26 November 2021 of $0.88; and

• 8.5% to the volume weighted average price of Refining NZ shares traded on the NZX during the five days up to, and including 26 November 2021, of $0.896.

The Placement is underwritten by Forsyth Barr Group Limited.

The SPP will allow all eligible shareholders with a registered address in New Zealand on the record date to apply for up to NZ$15,000 of new shares in Refining NZ. The issue price of the new shares under the SPP will be the lower of the Placement price and a 2.5% discount to the volume weighted average price of Refining NZ shares traded on the NZX during the five trading days up to, and including, the end of the SPP offer period.

Refining NZ intends to raise NZ$5 million under the SPP, although we have the ability to accept additional applications above that amount at our discretion. The SPP has been structured to be as fair as possible to all existing shareholders and enables almost all shareholders to participate through either the Placement or the SPP (except where restricted due to legal constraints), and should scaling be required under the SPP, it will be by reference to existing shareholdings on the record date.

The SPP offer opens on 2 December 2021, with the offer document also being available from that date.

The new shares issued under the Offer will rank equally in all respects with Refining NZ’s existing ordinary shares on issue.

Please see the links below for details

Equity Raise Launch Announcement

Cleansing Notice

Investor Presentation

Corporate Action Notice

Source: The New Zealand Refining Company Limited

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