31st Oct 2008 07:46
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLEOR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE PEOPLE'SREPUBLIC OF CHINA, JAPAN, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA OR SWITZERLAND THIS ANNOUNCEMENT IS AN ADVERTISEMENT. IT IS NOT A PROSPECTUS AND INVESTORSSHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENTEXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY CENTRICAPLC TODAY IN CONNECTION WITH THE PROPOSED RIGHTS ISSUE. COPIES OF THE PROSPECTUSWILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE Centrica announces 3 for 8 Rights Issue to raise approximately £2.2 billion tofund the potential acquisition of a 25% interest in British Energy 31 October 2008 Centrica plc ("Centrica") today announces a fully underwritten rights issue of1,392,545,298 New Shares at a price of 160 pence per New Share on the basis of 3New Shares for every 8 Existing Shares held on the record date of 14 November2008 (the "Rights Issue"). This Rights Issue is intended to help fund Centrica'svertical integration strategy, either through the potential acquisition of a 25%interest in British Energy plc ("British Energy") or other vertical integrationopportunities. The total net proceeds of the Rights Issue, after estimated aggregate costs andexpenses, are expected to be approximately £2.2 billion. The Issue Price of 160 pence per New Share represents a 39.9% discount to thetheoretical ex-rights price of 266 pence, based on the closing price of 306.25pence per Ordinary Share on 30 October 2008 (being the last business day beforetoday's announcement of the terms of the Rights Issue). Roger Carr, Chairman, said: "Following this Rights Issue, Centrica will be well-capitalised to fund thepotential acquisition of a 25% interest in British Energy. Assuming we reachagreement with EDF regarding Centrica acquiring a 25% interest in BritishEnergy, the proceeds of the Rights Issue will be directed towards thisopportunity, with the balance of the consideration being funded with additionaldebt and, possibly, asset sales. We have also released our interim management statement today. Overall, Centricacontinues to trade in line with expectations." The Rights Issue is fully underwritten by Goldman Sachs International, CreditSuisse Securities (Europe) Limited, and UBS Investment Bank as JointBookrunners, and by HSBC, BNP PARIBAS, RBS Hoare Govett and Barclays Capital asLead Managers. The full prospectus will be available on Centrica's website, www.centrica.com,and contains further details and the full terms and conditions of the RightsIssue. Background to and Reasons for the Rights Issue In February 2007, Centrica announced a new Group strategy which included a keypriority of reducing wholesale gas price risk through increased verticalintegration. Centrica is exposed to short-term movements in UK wholesale gasprices because it produces substantially less gas from the resources that itowns than it requires to fulfil customer demand and demand from its combinedcycle gas turbines power stations. This strategic priority seeks to partiallyaddress the risks arising from this exposure. In the past, this imbalance has,at times, resulted in Centrica's residential energy business in the UK beinguncompetitive vis-£-vis other major energy suppliers who are more verticallyintegrated. The acquisition of additional upstream assets addresses thisstrategic priority and Centrica has announced a number of related transactionsrecently, including the acquisition of gas reserves on the UK and Norwegiancontinental shelves. Lower wholesale gas price exposure can be achieved through the acquisition ofgas production assets or power generation assets where the input fuel is notnatural gas. Therefore, one way of addressing this strategic priority is toacquire nuclear generation assets. The leading supplier of nuclear energy in the UK is British Energy Group plc("British Energy"). On 24 September 2008, Lake Acquisitions Limited ("LakeAcquisitions"), a subsidiary of Electricit£ de France S. A. ("EDF"), announced arecommended offer for the entire issued share capital of British Energy.Centrica and EDF also announced on 24 September 2008 that they are indiscussions in relation to an option for Centrica to acquire a 25% interest inLake Acquisitions following the completion by Lake Acquisitions of itsacquisition of British Energy. The acquisition by Centrica would be at the sameimplied price per share as EDF pays for British Energy, subject to certain coststo be agreed, and based on EDF's current offer, is expected to be valued atapproximately £3.1 billion. EDF has announced its intention to build four European pressurised reactors("EPRs") in the UK and is aiming to have the first reactor on-stream by the endof 2017. The acquisition of a 25% interest in Lake Acquisitions (and the optionto participate in EDF's nuclear new build activities in the UK on a 75/25(EDF/Centrica) basis) would represent significant progress in increasingCentrica's vertical integration, which would make a significant contribution toreducing Centrica's exposure to short-term commodity price fluctuations andprovide another growth platform. Centrica and EDF have entered into a non-legally binding Memorandum ofUnderstanding effecting the above terms and Centrica continues to be indiscussions with EDF regarding this transaction. However, legally bindingdocumentation has not yet been entered into for the acquisition by Centrica ofany interest in British Energy. Any transaction would likely be subject to thefulfilment of certain conditions precedent, including Centrica shareholderapproval and regulatory approvals. Centrica would seek to finance anytransaction with the proceeds of this Rights Issue, additional debt and,possibly, the sale of certain assets. Centrica will remain a significant buyer of gas and power in the UK market, forwhich a strong credit rating is of key importance. Centrica's objective istherefore to maintain credit ratings in the 'A' range and it believes that thisRights Issue will help ensure this. Centrica also believes that there aresignificant benefits from being well capitalised in the current uncertain marketenvironment where opportunities can arise rapidly and traditional sources ofshort-term capital are less available. If Centrica does not acquire an interest in Lake Acquisitions, Centrica wouldevaluate the use of the proceeds of the Rights Issue for other acquisitionopportunities that meet its vertical integration objective, for generalcorporate purposes or for returns to shareholders, with a view to maintaining anappropriate capital structure and maximising long-term shareholder value. Financial Effects of the Potential Acquisition If Centrica acquires a 25% stake in Lake Acquisitions, the financial impact onCentrica will depend on a number of variables, including power prices and theoutput from British Energy's nuclear power stations. Based on current forwardpower prices, and Centrica's estimates of output, synergies and other variables,Centrica estimates that the acquisition, in combination with the Rights Issue,would be mildly dilutive in the first two years and neutral in 2011 on each ofearnings per share and on return on capital, before taking into account theimpact of fair value accounting adjustments which are described below. Centrica expects to account for its interest in Lake Acquisitions as anassociate using the equity method of accounting. On acquisition, for thepurposes of consolidated accounts, Centrica will be required to adjust the valueof Lake Acquisitions' assets and liabilities, which will include the acquiredBritish Energy group, to fair value. This is expected to result in an increasein the carrying values of the nuclear power stations and, as a result,additional depreciation charges which will reduce Lake Acquisitions' profitafter tax and, therefore, reduce reported earnings per share in Centrica'sconsolidated group accounts. Fair value accounting will also require contractsentered into by British Energy to sell power forward to be marked to market,based on forward power prices at the date the acquisition by Centrica iscompleted. If forward power prices were to remain at their current level, it isexpected that this marking to market will result in a provision being madeagainst the contracts, and the unwinding of this provision in future periodswill increase Lake Acquisitions' profit after tax and, therefore, Centrica'sreported earnings per share. The net effect of these adjustments is expected tobe broadly neutral in 2009, but negative from 2010 as the mark to market impacton the forward power contracts unwinds. Current Trading Update Overall, Centrica continues to trade in line with expectations on a pre-taxbasis. Full year earnings will also benefit from a lower effective tax ratedriven by a one-off deferred tax credit. As a result of the retail price increase announced in July, British GasResidential saw a short term increase in customer churn. However sales of energyaccounts remained high, with particular success in the fixed price propositions.Churn has now fallen to levels experienced before the price increase and inrecent weeks the level of account sales has been ahead of customer withdrawalnotifications. British Gas Residential currently has 15.6 million customeraccounts on supply. Subject to the usual uncertainties caused by weathervariations, second half operating margins are now expected to be ahead of thoseachieved in the first half of the year. In Centrica Energy the gas production business has continued to performstrongly, with gas volumes anticipated to be around 10% ahead of 2007, althoughthe recent easing in fourth quarter wholesale gas prices will have some impact.Losses in the legacy industrial and commercial contracts are expected to belower than previously forecast if the decline in the fourth quarter wholesalegas price is maintained. The operating results of the power generation businesshave been materially impacted by unplanned outages in the second half of theyear at the Peterborough and Spalding power stations. British Gas Services and British Gas Business are both performing ahead ofexpectations. Centrica Storage has undergone a strong injection season, with theRough reservoir now effectively full, and continues to meet profit expectations.In late September we acquired the Caythorpe onshore gas field which has planningpermission for conversion to a storage field with a capacity of up to 7.5billion cubic feet of gas. The total cost was £70 million, with an additionalinvestment of around £100 million required to complete the conversion. Difficult economic conditions in North America and the recent disruption to thepower market caused by Hurricane Ike have held back Direct Energy, but this hasbeen offset by the strengthening of the US dollar against sterling. Commodityprice movements have had a one-off adverse impact on Oxxio in The Netherlands,which in turn has had a significant adverse impact on the overall Europeanbusiness. The net interest charge for the Group remains low, at around £25 million. InSeptember we successfully placed £750 million of sterling bonds, with £300million maturing in 2018 and the remaining £450 million maturing in 2033. Wecontinue to forecast an underlying Group effective tax rate of around 55% due tothe high proportion of upstream profits. However the tax charge will benefitfrom a one-off deferred tax credit, now estimated at £60 million, due to achange in the treatment of decommissioning costs for certain gas fields. The certain remeasurements gains reported in the Interim results for the periodto 30 June 2008 have subsequently been negatively impacted by the movements incommodity prices and the margin cash held at 30 June 2008 has now largelyunwound. The next scheduled reporting event in the financial calendar for Centrica is the2008 full year results on 26 February 2009. Rights Issue The Rights Issue is being made to all Qualifying Shareholders on the register ofmembers of the Company at the close of business on 14 November 2008. Pursuant tothe Rights Issue, the Company is proposing to offer 1,392,545,298 New Shares byway of rights to Qualifying Shareholders other than, subject to certainexemptions as set out in paragraph 2.5 of Part III "Terms and Conditions of theRights Issue" of the Prospectus, Shareholders with a registered address, orresident, in the Excluded Territories, the United States or one of the otherRestricted Territories at 160 pence per New Share, payable in full on acceptanceby no later than 11.00 a.m. on 12 December 2008. The Rights Issue is expected toraise approximately £2.2 billion, net of related costs and expenses. The RightsIssue will be on the basis of 3 New Shares for every 8 Existing Shares. TheIssue Price represents a 39.9% discount to the theoretical ex-rights price,based on the closing middle-market price of 306.25 pence per Ordinary Share on30 October 2008 (being the last business day before today's announcement of theterms of the Rights Issue). The Rights Issue is fully underwritten by Goldman Sachs International, CreditSuisse, UBS Investment Bank and the other underwriters named in the UnderwritingAgreement. The Rights Issue is conditional, inter alia, on: (i) the Underwriting Agreement having become unconditional in all respects, savefor the condition relating to Admission; (ii) Admission becoming effective by not later than 8.00 a.m. on 15 December2008 (or such later time and date as the parties to the Underwriting Agreementmay agree); and (iii) the passing without amendment of the Resolutions. It is expected that Admission will occur and that dealings in the New Shares(nil paid) will commence on the London Stock Exchange at 8.00 a.m. on 24November 2008. Contacts \* TCentrica Investor Relations 01753 494900Centrica Media Relations 0845 0726 8001\* T A copy of the Prospectus when published will be available from the registeredoffice of Centrica plc at Maidenhead Road, Windsor, Berkshire, SL4 5GD and onthe Centrica website at www.centrica.com. The Prospectus will also be availablefor inspection during normal business hours on any weekday (Saturdays, Sundaysand public holidays excepted) at the offices of Linklaters LLP up to the date ofAdmission. This document is not a Prospectus but an advertisement and investors should notsubscribe for any Nil Paid Rights, Fully Paid Rights or New Ordinary Sharesreferred to in this announcement except on the basis of the informationcontained in the Prospectus. Neither the content of Centrica plc's website nor any website accessible byhyperlinks to Centrica plc's website is incorporated in, or forms part of, thisannouncement. Distribution of this announcement and/or the Provisional Allotment Lettersand/or the transfer of Nil Paid Rights, Fully Paid Rights and/or New OrdinaryShares into jurisdictions other than the United Kingdom may be restricted bylaw. These materials are not for distribution, directly or indirectly, in wholeor in part, in or into the United States (including its territories anddependencies, any state or the United States and the District of Columbia).Persons into whose possession this announcement comes should inform themselvesof and observe any such restrictions. Any failure to comply with theserestrictions may constitute a violation of the securities laws of any suchjurisdiction. These materials do not constitute or form a part of any offer or solicitation topurchase or subscribe for securities in the United States. The Nil Paid Rights,the Fully Paid Rights and the New Ordinary Shares have not been and will not beregistered under the United States Securities Act of 1933 (the "Securities Act")or under any securities laws of any state or other jurisdiction of the UnitedStates and may not be offered, sold, taken up, exercised, resold, renounced,transferred or delivered, directly or indirectly, within the United Statesexcept pursuant to an applicable exemption from the registration requirements ofthe Securities Act and in compliance with any applicable securities laws of anystate or other jurisdiction of the United States. The Nil Paid Rights, the FullyPaid Rights, the New Ordinary Shares and the Provisional Allotment Letters havenot been approved or disapproved by the US Securities and Exchange Commission,any state's securities commission in the United States or any US regulatoryauthority, nor have any of the foregoing authorities passed upon or endorsed themerits of the offering of the Nil Paid Rights, the Fully Paid Rights, the NewShares and the Provisional Allotment Letters or the accuracy or adequacy of thisannouncement. There will be no public offer of these securities in the UnitedStates. The Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Lettersand the New Ordinary Shares will also not be registered under the securitieslaws of any Excluded Territory or Restricted Territory and may not be offered,sold, taken up, exercised, resold, renounced, transferred or delivered, directlyor indirectly, within such jurisdictions except pursuant to an applicableexemption from and in compliance with any applicable securities laws. There willbe no public offer in any of the Excluded Territories or the RestrictedTerritories. Goldman Sachs International, Credit Suisse, UBS Limited, Barclays Capital, BNPParibas, HSBC and RBS Hoare Govett Limited, which are authorised and regulatedin the UK by the Financial Services Authority, are acting for Centrica and noone else in connection with the Rights Issue and will not regard any otherperson (whether or not a recipient of this document) as a client in relation tothe Rights Issue and will not be responsible to anyone other than Centrica forproviding the protections afforded to their respective clients or for providingadvice in relation to the Rights Issue or any matters referred to in thisdocument. Apart from the responsibilities and liabilities, if any, which may be imposed onGoldman Sachs International, Credit Suisse, UBS Limited, Barclays Capital, BNPParibas, HSBC and RBS Hoare Govett Limited by the Financial Services and MarketsAct 2000, none of Goldman Sachs International, Credit Suisse, UBS Limited,Barclays Capital, BNP Paribas, HSBC and RBS Hoare Govett Limited accepts anyresponsibility whatsoever for the contents of this document, including itsaccuracy, completeness or verification, or for any other statement made orpurported to be made by it, or on its behalf, in connection with Centrica, theNil Paid Rights, the Fully Paid Rights or the New Shares or the Rights Issue.Goldman Sachs International, Credit Suisse, UBS Limited, Barclays Capital, BNPParibas, HSBC and RBS Hoare Govett Limited accordingly disclaim all and anyliability whether arising in tort, contract or otherwise (save as referred toabove) which they might otherwise have in respect of this document or any suchstatement. Certain statements made in this announcement constitute forward-lookingstatements within the meaning of the US Private Securities Litigation Reform Actof 1995. Forward looking statements are typically identified by the use offorward looking terminology such as "believes", "expects", "may", "will","could", "should", "intends", "estimates", "plans", "assumes" or "anticipates"or the negative thereof or other variations thereon or comparable terminology,or by discussions of, e.g. future plans, present or future events, or strategythat involve risks and uncertainties. Such forward-looking statements aresubject to a number of risks and uncertainties, many of which are beyondCentrica's control and all of which are based on Centrica's current beliefs andexpectations about future events. Such statements are based on currentexpectations and, by their nature, are subject to a number of risks anduncertainties that could cause actual results and performance to differmaterially from any expected future results or performance, expressed orimplied, by the forward-looking statement. No assurance can be given that suchfuture results will be achieved; actual events or results may differ materiallyas a result of risks and uncertainties facing Centrica and its subsidiaries.Factors that might cause forward-looking statements to differ materially fromactual results include, among other things, the following: global economicconditions; economic conditions in the UK, Continental Europe, North America andother jurisdictions in which Centrica operates or invests; volatile commodityprices; any inability of Centrica to hedge certain risks economically; adequacyof reserve estimates; and exposure to various types of market risk (e.g.,interest rake risk, foreign exchange rate risk, credit risk and commodity pricerisk). The forward-looking statements contained in this announcement speak onlyas of the date of this announcement and Centrica undertakes no duty to, and willnot necessarily, update any of them in light of new information or futureevents, except to the extent required by applicable law, the Prospectus Rules,the Listing Rules and the Disclosure and Transparency Rules. Appendix I: Terms and Conditions of the Rights Issue The Company is proposing to raise proceeds of approximately £2.2 billion (net ofexpenses) by way of a rights issue of 1,392,545,298 New Shares. Subject to thefulfilment of the conditions of the Underwriting Agreement, the New Shares willbe offered under the Rights Issue by way of rights at 160p pence per New Share,payable in full on acceptance by Qualifying Shareholders able to acquire NewShares, on the basis of: 3 New Shares for every 8 Existing Shares held on the Record Date (and so in proportion for any other number of ExistingShares then held) and otherwise on the terms and conditions as set out in thisdocument and, in the case of Qualifying Non-CREST Shareholders other than toShareholders with a registered address, or resident in, one of the ExcludedTerritories or, subject to certain exceptions, the United States or one of theother Restricted Territories, the PALs. The Issue Price of 160 pence per New Share represents a 39.9% discount to thetheoretical ex-rights price based on the closing middle-market price of anOrdinary Share as derived from the London Stock Exchange Daily Official List of306.25 pence per Existing Share on 30 October 2008, the last business day priorto the date of announcement of the terms of the Rights Issue. Qualifying Shareholders who do not take up their entitlements to New Shares willhave their proportionate shareholdings in Centrica diluted by approximately27.3%. Those Qualifying Shareholders who take up all the New Shares personallyallotted to them in full will, subject to fractions, have the same proportionatevoting and distribution rights as held by them on the Record Date. The Nil Paid Rights (also described as New Shares, nil paid) are entitlements toacquire the New Shares subject to payment of the Issue Price. The Fully PaidRights are entitlements to receive the New Shares, for which subscription andpayment have already been made. Holdings of Existing Shares in certificated and uncertificated form will betreated as separate holdings for the purpose of calculating entitlements underthe Rights Issue. Entitlements to New Shares will be rounded down to the nextlowest whole number and fractions of New Shares will not be allotted toQualifying Shareholders. Such fractions will be aggregated and, if possible,placed as soon as practicable after the commencement of dealings in the NewShares, nil paid. The net proceeds of such placings (after deduction ofexpenses) will be aggregated and will ultimately accrue for the benefit ofCentrica. The attention of Overseas Shareholders or any person (including, withoutlimitation, custodians, nominees and trustees) who has a contractual or otherlegal obligation to forward this document into a jurisdiction other than the UKis drawn to paragraph 2.5 of Part III of the Prospectus. The offer of New Sharesunder the Rights Issue will not be made into certain territories. Subject to theprovisions of paragraph 2.5 of Part III of the Prospectus, Shareholders with aregistered address in the United States any other Restricted Territory or anExcluded Territory are not being sent this document and will not be sentProvisional Allotment Letters. Applications will be made to the UK Listing Authority and to the London StockExchange for the New Shares (nil paid and fully paid) to be admitted to theOfficial List and to trading on the London Stock Exchange's main market forlisted securities respectively. It is expected that Admission will becomeeffective on 15 December 2008 and that dealings in the New Shares, nil paid,will commence on the London Stock Exchange by 8.00 a.m. on that date. The NewShares and the Existing Shares are in registered form and can be held incertificated or uncertificated form via CREST. The Existing Shares are already admitted to CREST. No further application foradmission to CREST is required for the New Shares and all of the New Shares whenissued and fully paid may be held and transferred by means of CREST. Applications will be made for the Nil Paid Rights and the Fully Paid Rights tobe admitted to CREST. Euroclear UK requires the Company to confirm to it thatcertain conditions (imposed by the CREST Manual) have been satisfied beforeEuroclear UK will admit any security to CREST. It is expected that theseconditions will be satisfied, in respect of the Nil Paid Rights and the FullyPaid Rights, on Admission. As soon as practicable after satisfaction of theconditions, the Company will confirm this to Euroclear UK. The ISIN for the New Shares will be the same as that of the Existing Sharesbeing GB00B033F229. The ISIN for the Nil Paid Rights is GB00B3F9ZN01 and for theFully Paid Rights is GB00B3F9ZS55. None of the New Shares is being made available to the public other than pursuantto the Rights Issue. The Rights Issue has been fully underwritten by Goldman Sachs International,Credit Suisse, UBS Limited and the other underwriters and is conditional, interalia, upon: (i) the Underwriting Agreement having become unconditional in all respects (savefor the condition relating to Admission) and not having been terminated inaccordance with its terms; (ii) Admission becoming effective by not later than 8.00 a.m. on 15 December2008 (or such later date as the parties to the Underwriting Agreement mayagree); and (iii) the passing, without amendment, of the Resolutions. The Underwriting Agreement is conditional upon certain matters being satisfiedor not breached prior to the General Meeting and may be terminated by the JointBookrunners prior to Admission upon the occurrence of certain specified events,in which case the Rights Issue will not proceed. The Underwriting Agreement isnot capable of termination following Admission. The Joint Bookrunners mayarrange sub-underwriting for some, all or none of the New Shares. A summary ofcertain terms and conditions of the Underwriting Agreement is contained inparagraph 16(i) of Part IX "Additional Information" of the Prospectus. The Underwriters and any of their respective affiliates may engage in tradingactivity in connection with their roles under the Underwriting Agreement and, inthat capacity, may retain, purchase, sell, offer to sell or otherwise deal fortheir own account in securities of the Company and related or other securitiesand instruments (including Ordinary Shares, Nil Paid Rights and Fully PaidRights). In addition, the Company reserves the right to decide not to proceed with theRights Issue at any time prior to Admission and commencement of dealings in theNew Shares (nil paid). Subject, inter alia, to the conditions referred to above being satisfied (otherthan the condition relating to Admission), it is intended that: (i) Provisional Allotment Letters in respect of Nil Paid Rights will bedespatched to Qualifying Non-CREST Shareholders other than to Shareholders witha registered address, or resident in, one of the Excluded Territories or,subject to certain exceptions, the United States or one of the other RestrictedTerritories on 21 November 2008; (ii) the Receiving Agent will instruct Euroclear UK to credit the appropriatestock accounts of Qualifying CREST Shareholders with such Shareholders'entitlements to Nil Paid Rights with effect from 8.00a.m. on 24 November 2008; (iii) the Nil Paid Rights and the Fully Paid Rights will be enabled forsettlement by Euroclear UK as soon as practicable after the Company hasconfirmed to Euroclear UK that all the conditions for admission of such rightsto CREST have been satisfied, which is expected to be by 8.00 a.m. on 24November 2008; (iv) New Shares will be credited to the relevant Qualifying Shareholders whovalidly take up their rights by no later than 15 December 2008; and (v) share certificates for the New Shares will be despatched to relevantQualifying Non-CREST Shareholders by no later than 22 December 2008. The offer will be made to Qualifying Non-CREST Shareholders other than toShareholders with a registered address, or resident in, one of the ExcludedTerritories or, subject to certain exceptions, the United States or one of theother Restricted Territories by way of the Provisional Allotment Letter (asdescribed in step (i) above) and to Qualifying CREST Shareholders other than toShareholders with a registered address, or resident in, one of the ExcludedTerritories or, subject to certain exceptions, the United States or one of theother Restricted Territories by way of the enablement of the Nil Paid Rights andthe Fully Paid Rights (as described in step (iii) above) (such Shareholders'stock accounts having been credited as described in step (ii) above). The New Shares will, when issued and fully paid, rank pari passu in all respectswith the Existing Shares, including the right to receive all dividends or otherdistributions made, paid or declared after the date of this document, save forthe 2008 interim dividend of 3.9 pence per Ordinary Share announced by Centricaon 31 July 2008 and to be paid on 12 November 2008 to holders of Existing Shareson the register of members of Centrica at the close of business on 26 September2008. All documents, including Provisional Allotment Letters (which constitutetemporary documents of title) and cheques and certificates posted to, by or fromQualifying Shareholders and/or their transferees or renouncees (or their agents,as appropriate) will be posted at their own risk. Shareholders taking up their rights by completing a Provisional Allotment Letteror by sending a Many-To-Many ("MTM") instruction to Euroclear UK will be deemedto have given the representations and warranties set out in paragraph 2.5.5(i)of Part III "Terms and Conditions of the Rights Issue" of the Prospectus, unlessthe requirement is waived by Centrica. Appendix II: Timetable EXPECTED TIMETABLE OF PRINCIPAL EVENTS Each of the times and dates in the table below is indicative only and may besubject to change. \* T 2008 --------------------------------Record Date for entitlement under the Rights Issue for Qualifying CRESTShareholders and Qualifying Non-CREST Shareholders close of business on 14 NovemberLatest time and date for receipt of General Meeting Forms of Proxy 10.00 a.m. on 19 NovemberGeneral Meeting 10.00 a.m. on 21 NovemberDespatch of Provisional Allotment Letters (to Qualifying non-CREST Shareholders only)(1). 21 NovemberStart of subscription period 22 NovemberDealings in New Shares, nil paid, commence on the London Stock Exchange 8.00 a.m. on 24 NovemberExisting Shares marked "ex" by the London Stock Exchange 8.00 a.m. on 24 NovemberNil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders only)(1) 8.00 a.m. on 24 NovemberNil Paid Rights and Fully Paid Rights enabled in CREST by 8.00 a.m. on 24 NovemberRecommended latest time for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e. if your Nil Paid Rights and Fully Paid Rights are in CREST and you wish to convert them to certificated form) 4.30 p.m. on 5 December Latest time for depositing renounced Provisional Allotment Letters, nil or fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form) 3.00 p.m. on 8 December Latest time and date for splitting Provisional Allotment Letters, nil or fully paid 3.00 p.m. on 10 DecemberLatest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters 11.00 a.m. on 12 December Dealings in New Shares, fully paid, commence on the London Stock Exchange by 8.00 a.m. on 15 DecemberNew Shares credited to CREST stock accounts by no later than 15 DecemberDespatch of definitive share certificates for the New Shares in certificated form by no later than 22 December\* T Notes: (1) Subject to certain restrictions relating to Shareholders with registeredaddresses outside the UK, details of which are set out in Part III "Terms andConditions of the Rights Issue" of the Prospectus. (2) The times and dates set out in the expected timetable of principal eventsabove and mentioned throughout this document may be adjusted by Centrica inconsultation with the Joint Bookrunners in which event details of the new timesand dates will be notified to the UK Listing Authority, the London StockExchange and, where appropriate, Qualifying Shareholders. (3) References to times in this timetable are to London (GMT) times unlessotherwise stated. (4) If you have any queries on the procedure for acceptance and payment, youshould contact the Shareholder Helpline on 0871 384 2972 (from inside the UK),calls to this number are charged at 8 pence per minute if calling from a BTlandline, other telephone providers' cost may vary, or +44 208 495 4641 (fromoutside the UK). This helpline is available from 8.30 a.m. to 5.30 p.m. Mondayto Friday (except bank holidays). For legal reasons, the Shareholder Helplinewill be unable to give advice on the merits of the Rights Issue or to providefinancial, tax or investment advice. Appendix III: Definitions \* TTerm Definition------------------------------------------------------------------------------------------------------------------------Admission the admission of the New Shares (nil paid and fully paid) to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares (nil paid and fully paid) to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance with the Admission and Disclosure Standards------------------------------------------------------------------------------------------------------------------------Admission and the "Admission and Disclosure Standards" of the London Stock Exchange containing, among other things, Disclosure the admission requirements to be observed by companies seeking admission to trading on the London Stock Standards Exchange's main market for listed securities------------------------------------------------------------------------------------------------------------------------Barclays Capital Barclays Bank PLC of 5 The North Colonnade, Canary Wharf, London E14 4BB------------------------------------------------------------------------------------------------------------------------BNP Paribas BNP PARIBAS of 16 boulevard des Italiens, 75009 Paris, France------------------------------------------------------------------------------------------------------------------------British Energy British Energy Group plc, a company incorporated under the laws of England and Wales with registered number SC270184------------------------------------------------------------------------------------------------------------------------business day a day (excluding Saturdays and Sundays or public holidays in England and Wales) on which banks generally are open for business in London for the transaction of normal business------------------------------------------------------------------------------------------------------------------------Centrica Group or the Group the Company and each of its subsidiaries and subsidiary undertakings from time to time------------------------------------------------------------------------------------------------------------------------certificated or in certificated form where a share or other security is not in uncertificated form------------------------------------------------------------------------------------------------------------------------Circular to the circular to shareholders dated 31 October 2008 issued by the Company in connection with the Rights Shareholders Issue and including the General Meeting Notice------------------------------------------------------------------------------------------------------------------------Companies Act the UK Companies Act 1985, as amended or the UK Companies Act 2006, as the context so requires------------------------------------------------------------------------------------------------------------------------Company or Centrica plc, a company incorporated under the Companies Act 1985 (registered under no. 3033654), with Centrica registered office at Millstream, Maidenhead Road, Windsor, Berkshire SL4 5GD------------------------------------------------------------------------------------------------------------------------Credit Suisse Credit Suisse Securities (Europe) Limited of One Cabot Square, London E14 4QJ------------------------------------------------------------------------------------------------------------------------CREST the relevant system, as defined in the CREST Regulations (in respect of which Euroclear UK is the operator as defined in the CREST Regulations)------------------------------------------------------------------------------------------------------------------------CREST Manual the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear UK on 15 July 1996 and as amended since)------------------------------------------------------------------------------------------------------------------------CREST Regulations or Regulations the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/ 378), as amended------------------------------------------------------------------------------------------------------------------------Daily Official the daily record setting out the prices of all trades in shares and other securities conducted on the List London Stock Exchange------------------------------------------------------------------------------------------------------------------------EDF EDF SA, a company incorporated under the laws of France with registered number 552 081 317------------------------------------------------------------------------------------------------------------------------Euroclear UK Euroclear UK & Ireland Limited, the operator of CREST------------------------------------------------------------------------------------------------------------------------Excluded Territories and each an Excluded Territory the Commonwealth of Australia, its territories and possessions and the Republic of South Africa------------------------------------------------------------------------------------------------------------------------Existing Shares the Ordinary Shares in issue as at the date of this document------------------------------------------------------------------------------------------------------------------------FSMA the Financial Services and Markets Act 2000, as amended------------------------------------------------------------------------------------------------------------------------Fully Paid Rights rights to acquire the New Shares, fully paid------------------------------------------------------------------------------------------------------------------------General Meeting the general meeting of Centrica plc to be held at Excel London, Western Gateway, Royal Victoria Dock, London E16 1XL on 21 November 2008, notice of which is set out in the Circular to Shareholders------------------------------------------------------------------------------------------------------------------------General Meeting Notice the notice of the General Meeting set out in the Circular to Shareholders------------------------------------------------------------------------------------------------------------------------GMT Greenwich Mean Time------------------------------------------------------------------------------------------------------------------------Goldman Sachs International Goldman Sachs International of Peterborough Court, 133 Fleet Street, London EC4A 2BB------------------------------------------------------------------------------------------------------------------------HSBC HSBC of 8 Canada Square, Canary Wharf, London, E14 5HQ------------------------------------------------------------------------------------------------------------------------Issue Price 160 pence per New Share------------------------------------------------------------------------------------------------------------------------Joint Bookrunners Goldman Sachs International, Credit Suisse and UBS Limited------------------------------------------------------------------------------------------------------------------------Lake Lake Acquisitions Limited, a company incorporated under the laws of England and Wales with registered Acquisitions number 00612465------------------------------------------------------------------------------------------------------------------------Listing Rules the Listing Rules made by the FSA under Part VI of FSMA------------------------------------------------------------------------------------------------------------------------London Stock Exchange London Stock Exchange plc------------------------------------------------------------------------------------------------------------------------Memorandum of the memorandum of association of the Company, details of which are set out in paragraph 4 of Part IX Association "Additional Information" of the Prospectus------------------------------------------------------------------------------------------------------------------------New Shares Ordinary Shares to be allotted and issued pursuant to the Rights Issue------------------------------------------------------------------------------------------------------------------------Nil Paid Rights rights to acquire the New Shares, nil paid------------------------------------------------------------------------------------------------------------------------Non-CREST Shareholder a Shareholder who does not hold their Ordinary Shares in CREST------------------------------------------------------------------------------------------------------------------------Official List the Official List of the FSA pursuant to Part VI of FSMA------------------------------------------------------------------------------------------------------------------------Ordinary Shares the ordinary shares of 6 14/81 pence each in the share capital of the Company (including, if the context or Shares requires, the New Shares)------------------------------------------------------------------------------------------------------------------------Overseas Shareholders with registered addresses outside the UK or who are citizens or residents of countries Shareholders outside the UK------------------------------------------------------------------------------------------------------------------------pounds sterling or £ the lawful currency of the UK------------------------------------------------------------------------------------------------------------------------Potential the proposed acquisition by Centrica of a 25% interest in Lake Acquisitions, a subsidiary of EDF Acquisition following completion of the acquisition by Lake Acquisitions of British Energy------------------------------------------------------------------------------------------------------------------------Provisional Allotment the renounceable provisional allotment letter expected to be sent to Qualifying Non-CREST Shareholders Letter or PAL in respect of the New Shares to be provisionally allotted to them pursuant to the Rights Issue------------------------------------------------------------------------------------------------------------------------Qualifying CREST Shareholders Qualifying Shareholders holding Ordinary Shares in uncertificated form in CREST------------------------------------------------------------------------------------------------------------------------Qualifying Non- CREST Shareholders Qualifying Shareholders holding Ordinary Shares in certificated form------------------------------------------------------------------------------------------------------------------------Qualifying Shareholders holders of Ordinary Shares on the register of members of the Company at the Record Date------------------------------------------------------------------------------------------------------------------------RBS Hoare Govett RBS Hoare Govett Limited of 250 Bishopsgate, London, EC2M 4AA------------------------------------------------------------------------------------------------------------------------Record Date close of business on 14 November 2008------------------------------------------------------------------------------------------------------------------------Registrars or Receiving Agent Equiniti Limited------------------------------------------------------------------------------------------------------------------------Resolutions the resolutions to be proposed at the General Meeting in connection with the Rights Issue, notice of which is set out in the Circular to Shareholders------------------------------------------------------------------------------------------------------------------------Restricted Territories Canada, the People's Republic of China, Japan, Singapore, Switzerland, and the United States;------------------------------------------------------------------------------------------------------------------------Rights rights to the New Shares pursuant to the Rights Issue------------------------------------------------------------------------------------------------------------------------Rights Issue the proposed issue by way of rights of New Shares to Qualifying Shareholders on the basis described in this document and, in the case of Qualifying Non-CREST Shareholders, in the Provisional Allotment Letter------------------------------------------------------------------------------------------------------------------------Shareholder or Centrica Shareholder holder of Ordinary Shares------------------------------------------------------------------------------------------------------------------------stock account an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited------------------------------------------------------------------------------------------------------------------------subsidiary undertaking as defined in section 258 of the Companies Act------------------------------------------------------------------------------------------------------------------------UBS Investment Bank UBS Limited of 1 Finsbury Avenue, London EC2M 2PP------------------------------------------------------------------------------------------------------------------------UK Listing the FSA in its capacity as the competent authority for the purposes of Part VI of FSMA and in the Authority or exercise of its functions in respect of the admission to the Official List otherwise than in accordance UKLA with Part VI of GSMA------------------------------------------------------------------------------------------------------------------------uncertificated or in recorded on the relevant register of the share or security concerned as being held in uncertificated uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of form CREST------------------------------------------------------------------------------------------------------------------------Underwriters Goldman Sachs International, Credit Suisse, UBS Limited, Barclays Capital, BNP Paribas, HSBC and RBS Hoare Govett------------------------------------------------------------------------------------------------------------------------Underwriting the underwriting agreement dated 31 October 2008 between the Company and the Underwriters relating to Agreement the Rights Issue and further described in paragraph 16.1 of Part IX "Additional Information" of the Prospectus------------------------------------------------------------------------------------------------------------------------UK the UK of Great Britain and Northern Ireland------------------------------------------------------------------------------------------------------------------------United States the United States of America, its territories and possessions, any state of the United States and the or US District of Columbia------------------------------------------------------------------------------------------------------------------------\* T Copyright Business Wire 2008Related Shares:
Centrica