Ann: Shortfall Announcement-NTL.NZ, page-2

I'm glad that there is now certainty about what is going to happen with the shortfall.

We know dates and timeframes.

There is, however, a point in the NZX rules that NTL refers to about shortfall placement at the discretion of the board in the equitable interest of shareholders (can't remember the exact wording of the rule) but it gives a wide power to the board to allocate at their discretion.

I wonder what NTL means by:

Although Shortfall Shares may be allocated to new shareholders, preference will be shown to existing Eligible Shareholders who participated in the Rights Issue and who are supportive of New Talisman's long term goals, in amanner that is equitable and in the best interests of New Talisman. To the extent the offer of Shortfall Shares is oversubscribed, New Talisman will allocate the Shortfall Shares, at its discretion, in a manner consistent with this approach. Funds which are not accepted will be refunded in a manner consistent with the Rights Issue.

My reading is this:

(1) Any NTL shareholder - new or old - can apply.

(2) Preference given to rights issue uptakers - and why the hell not, we took the risk of the rights issue being a flop.

(3) Long term holders given preference. What this means exactly I'm not sure, but the dichotomy between long term holders and short term holders may play out here. I would personally be a bit miffed if the company shelled out a bunch of cheap shares to recent buyers who bought after things like the Amer MOU and the NCM JV and the successful rights issue. If I had my way it would be long term holders who participated in the rights issue only, no offence to anyone.

(4) If oversubscribed, expect to miss out if you're not a long termer I guess.

(5) If not oversubscribed, well, hopefully you get some but I don't see the point of diluting for the sake of short term traders. Hopefully the company sees it this way - I'll be writing to NTL to tell them what I think! (Can you imagine me keeping quiet??? Haha)