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Tower Limited profit warning

Wednesday 21st May 2003

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The Directors of TOWER Limited advise the market of the following:

§ The operating profit for the first half of the year is expected to be in the range of NZ$3-6 million.

§ TOWER intends to reduce the carrying value of certain group companies and other assets by NZ$190 million. This includes NZ$135 million amortisation of excess market value as a result of change to the application of accounting standards. This will result in a loss for the half year in excess of NZ$180 million.

§ TOWER proposes to undertake a substantial capital raising of approximately NZ$200 million.

§ The proceeds of the capital raising will be applied mainly to the retirement of debt.

§ Further details of the above including any shareholder and regulatory approvals required will be announced together with the company's half year result on 28 May 2003.

TOWER's Chairman, Olaf O'Duill, said: "The review of TOWER's financial position that has been undertaken and the proposed recapitalisation, will place TOWER in a strong position for future growth and profitability."

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