Macquarie Bank and Siemens complete £132m financing for Capital Meters Ltd (CML)

09 December 2003

CML to provide energy meters for major British Gas contract

LONDON -  Macquarie Bank today announced the successful completion of the £132m financing of Capital Meters Limited (CML), a special purpose company established by Macquarie and Siemens Energy Services Limited (SESL). CML will procure and own gas and electricity meters for a major energy metering service contract awarded to SESL by British Gas.

The £132m financing consists of £103.4m senior debt and £14.1m mezzanine debt facilities, equity and shareholder loans. Macquarie Bank will provide £11m of equity, taking an 80 per cent stake in CML. Macquarie also acted as financial adviser to SESL. Debt facilities were arranged and underwritten by Royal Bank of Canada and Bank of Scotland.

According to Andrew Hunter, Macquarie Bank's Head of Infrastructure Advisory for Europe, CML offers an attractive niche investment opportunity. "The move from regulated metering services to open competition has created an opportunity for equity investment in a new market at attractive returns," Mr Hunter said.

"Energy meters are very long life essential assets with low failure rates and low levels of redundancy. As an investment they offer stable and low risk returns, in a semi-regulated environment.

"We are seeing increasing interest in long-term, essential assets, particularly from pension funds and other institutional investors seeking long-term stable returns that match long-dated liability profiles," he said.

Donald Weir, Managing Director of SESL, added, "The innovative combination of Siemens' expertise in metering services and the investors in CML is a significant development for the energy sector. We look forward to providing the customers of British Gas with enhanced, flexible service through this partnership."

The metering contract covers the seventh and final region to be awarded by British Gas for meter provision and maintenance in the UK. These services were opened up to competitive tender in August 2001 in order to improve services for consumers. The tender was divided into seven geographical zones, which include approximately 15.5m domestic customers.

Under the £45m, five-year installation contract SESL will install and maintain energy meters for all British Gas domestic and small business customers in East Anglia and North London (Zone 5). SESL will install, maintain and repair domestic gas and electricity meters for 2.6 million customers starting in March 2004.

NOTES TO EDITORS:

The Macquarie Bank Group is a global leader in infrastructure acquisition, funding and management, and manages almost €10 billion of funds invested in infrastructure assets and businesses around the world including toll roads, airports, communications, water, rail and power assets. Macquarie was ranked No.2 Globally, No.1 for Americas and No.1 for Asia Pacific for infrastructure advisory in 2002 (Thomson Financial/Project Finance). The Group provides specialist investment, advisory and financial services in select markets around the world, with over 5000 people in 18 countries.

Capital Meters Limited (CML) is a special purpose company and has been established by Siemens Energy Services and Macquarie Bank to own gas and electricity meters and rent them to British Gas over a period of approximately 25 years. All operational aspects of the service will be managed by Siemens Energy Services.

Siemens Energy Services Limited (SESL) is the UK's leading independent provider of utility metering services. Operating nation-wide, it provides services to a range of public and private organisations and almost 9 million homes with the highest density in the North London, Eastern and East Midlands areas. SESL offers utility metering services spanning data collection, meter operations, prepayment facilities, revenue management and meter asset management. Its customers include energy suppliers and distributors as well as industrial and commercial energy users.

For further information please contact:

Andrew Waterworth
Financial Dynamics
Tel: +44 (0)20 7269 7127
Mob: +44 (0) 7771 740484