Shortfall Announcement, page-14

Hi Jack12, the only silly question is the question you do not ask.

A renounceable rights issue works by allowing shareholders who held the shares on a specific date an instrument called "rights" which can be exercised for shares.

NTL issues 3 rights for 1 share to all eligible shareholders, exercisable at 0.5 cents per share.

The rights issue raised about NZ$4.7m out of a potential amount of about NZ$12m.

The leftovers, or shortfall, are offered to shareholders under the respective rules of the NZX and ASX.

In the NZX rules, anyone can apply for them until 5pm tomorrow by sending away the form and paying the money. Under the ASX rules, it's a bit more complicated but I think shareholders can apply and also sophisticated investors.

However, under both rules the placement of shortfall is at the discretion of the NTL board of directors. NTL indicated in its announcement that it wants to reward long term holders and that refunds may be made if applications are not accepted.

So, to answer your question, the shares cannot be bought on market. People can apply for shortfall allocation up to the rights issue amount, but the company does not have to issue to everyone who applies. The shares are not available on market unless a shareholder decides to sell them.

My personal view is that if long term shareholders are rewarded with shortfall then we're unlikely to see them dumping the stock, therefore these on-market prices may be a thing of the past in the near future!