Since the dividend was announced, Prime Infrastructure Networks (New Zealand) Limited (Prime Infrastructure NZ) has completed its takeover offer for Powerco and received acceptances for in excess of 90% of Powerco's shares.

Prime Infrastructure NZ has confirmed to Powerco that it will be proceeding to compulsorily acquire the remaining Powerco shares and capital bonds and it is expected that the compulsory acquisition notices pursuant to the Takeovers Code will be mailed to the remaining shareholders and bondholders in the next few days. Trading in Powerco shares and the capital bonds was suspended by the NZX on 11 November 2004 pending delisting of the shares and capital bonds.

Under the terms of the takeover offer Prime Infrastructure Networks NZ would be entitled to the benefit of the proposed dividend and accordingly, to avoid any confusion in the market as the compulsory acquisition process proceeds, the directors consider it appropriate to cancel the dividend.