cbd funding arrangements reply

I have left a message for you this afternoon as well, but thought I would also follow up by email. We have had a couple of queries regarding the funding for AusChina, so I hope the below will clarify the company’s position. CBD’s current shareholding in AusChina is 23.75%. There has been no significant investment in AusChina by CBD up to this point (other than management time in negotiating the terms of the JV with our Chinese partners). The costs incurred by CBD in setting up the JV are reimbursed to the company by the JV itself with initial funding provided by the Chinese partners to cover this. The future funding options for CBD were covered In the announcement on 31 August, in that CBD has the option (but not obligation) to maintain its current shareholding % in AusChina as projects are developed. Should CBD choose to maintain its holding, then an agreement is in place whereby the Chinese partners will provide loans to CBD to enable their equity participation. There is no current intention to raise capital from shareholders to fund further equity investments in AusChina. CBD’s equity participation will be reviewed and assessed as projects develop. No decision has been made as to the timing of any potential equity investment (loan funded from Chinese partners) in AusChina by CBD following the Taralga transaction. An announcement will be made should this occur. The management fee receivable by CBD from AusChina of 0.5% per annum of the JV’s assets is not dependent in any way on CBD’s equity participation. This will provide a significant annuity income stream for CBD as more projects are developed I trust this clarifies the position for you and shows the significant opportunities these agreements open up for CBD going forward. If you have any further queries, please email me directly at: [email protected] Regards, Richard Pillinger | Company Secretary CBD ENERGY LIMITED Suite 2, Level 2, 53 Cross Street, Double Bay NSW 2028