TRT - Recapitalisation Plan 1/1 (P) TRT - ASX Company Announcement 13 January 2003 Part 1/1 -------- TUART RESOURCES LIMITED ----------------------- HOMEX - Perth ------------------------- Recapitalisation Plan - Restructure Tuart Resources Limited ("Tuart") announced today that it had accepted a proposal by Ascent Capital Pty Ltd ("Ascent Capital") to recapitalise Tuart and all subsidiary companies associated with the Preston Vale vineyard with the objective (if successful) of maximising the value of Tuart's investment in the Preston Vale vineyard. The decision by Tuart follows months of Intensive negotiations canvassing the Australian wine market for an equity participant in Tuart. The Chairman of Tuart Resources Limited Mr Martin Bennett said that the need to proceed with a recapitalisation proposal for Tuart had become more urgent with the need to put forward a Deed of Company Arrangement for the creditors of Southern Wine Corporation Limited. Immediately prior to Christmas Ascent Capital proposed a Deed of Company Arrangement for the Creditors of Southern Wine Corporation Limited which was accepted by the creditors. The Deed needs to be implemented prior to 28 February 2003. In order to implement the Ascent Capital recapitalisation plan: 1. Mr Bob Hendrie, the Managing Director of Tuart and Mr Eddie Saunders, a non-executive Director have both resigned as Directors; 2. two of the Executive Directors of Ascent Capital, Mr Gary Steinepreis and Mr Hugh Warner have been appointed to the Board of Tuart; 3. the new Tuart Board has today resolved to appoint Mr John Carrello of PKF Chartered Accountants as an Administrator of Tuart. Mr Bennett said that it was an integral part of the Ascent Capital proposal that Tuart be placed in a managed voluntary administration to enable Tuart to quantify all liabilities and negotiate a settlement schedule via a Deed of Company Arrangement. Mr Bennett said the Board was confident the proposed Deed of Company Arrangement would be supported by Tuart creditors and Ascent Capital had already received support for its proposal from a number of creditors. The Deed of Company Arrangement proposed will be structured in two parts being both a formal Deed of Company Arrangement and a Creditors Deed of Trust whereby all assets and liabilities of Tuart allocated to creditors will be held in trust to enable Tuart to be released from administration as soon as possible. Upon acceptance of the terms of the Deed of Company Arrangement by the creditors, it is proposed to seek Tuart shareholder approval for the following resolutions: 1. ratification of the issues of securities to Ascent Capital and/or its nominees of 113,193,718 fully paid ordinary shares (post consolidation 3,773,155) as a result of the exercise of a performance option; 2. approve the consolidation of the share capital of Tuart on a 1 new share for every 30 existing shares; 3. approve the bonus issue of a converting share to each existing Tuart shareholder (pre consolidation) whereby in the event that Tuart achieves a commercial resolution to retaining control of the underlying Preston Vale vineyard these converting shares convert into fully paid ordinary shares thus reducing the dilution factor on consolidation to 1/15; 4. approval for the placement of 55,000,000 fully paid ordinary shares (post consolidation) to Ascent Capital and its nominees in consideration of $55,000. As part of this issue Ascent Capital proposes to allocate to Empresa Management Pty Ltd (a company associated with the General Manager of Tuart, Mr Frank Ashe) 5,500,000 fully paid ordinary shares (post consolidation) in consideration for $5,500,00 cash and an ongoing management support role during the Deed of Company Arrangement and implementation of the Ascent Capital proposal; 5. approval to place 130,000,000 fully paid ordinary shares (post consolidation) to Ascent Capital and its nominees in consideration for $1,300,000 cash; 6. ratify the appointment of Mr Hugh Warner and Mr Gary Steinepreis as Directors; 7. any other resolution required for recapitalisation purposes; Mr Bennett said it was is the intention of Ascent Capital to raise equity funds for Tuart as soon as possible post Tuart being released from administration and the above shareholder approvals being received. Thereafter Ascent Capital and Tuart will seek the reinstatement of Tuart to trading on the ASX as soon as possible. Upon a review of the Tuart corporate group, it is likely that a number of subsidiaries will be liquidated or de-registered. The Ascent Capital proposal recognises that Diamond Ridge Management Pty Ltd is now in liquidation. There is no intention to make any investment or take any action in respect of the Diamond Ridge vineyard. Ascent Capital was formed by David Steinepreis, Hugh Warner and Gary Steinepreis specifically with the objective of pursuing reconstruction and recapitalisation of existing listed companies. Ascent Capital and its Directors have successfully recapitalised and relisted a number of companies including Triton Corporation Limited, VosTech Limited, ISP Limited and Smart World Corporation Limited. Ascent Capital also completed the IPO of InfoBank International Ltd and its recent acquisition and change of name to Aeris Technologies Ltd. Mr Bennett said that the professional expertise that the Ascent Capital Directors would bring to the recapitalisation proposal for Tuart was a decisive factor in persuading the Tuart Board that the Ascent Capital proposal should be accepted. Mr Bennett said that the Tuart Board were confident that the experience and expertise of the Ascent Capital team would provide the best opportunity for Tuart shareholders rebuilding value in their Company. Mr Bennett urged shareholders to support the Ascent Capital recapitalisation proposal. Any queries should be directed to Mr M L Bennett. M L Bennett CHAIRMAN
