Letter to Non-Qualifying Shareholders

3 October 2014

Dear Shareholder

Ceramic Fuel Cells Limited - renounceable rights issue

Ceramic Fuel Cells Limited (Company) has recently announced to ASX that it is undertaking a 3 for 5 renounceable rights issue to raise a maximum of approximately $13.7 million (before costs of the issue) through: 

· the issue of up to 1,529,530,459 new ordinary shares on the basis of 3 new ordinary shares for every 5 existing shares held by qualifying shareholders at 7.00pm on 3 October 2014 (Record Date) at an offer price of 0.90 cents each (New Shares); and

· the grant of up to 764,765,229 options, being one option to subscribe for a new ordinary share for every two New Shares issued, which options shall be exercisable on or before 30 October 2015 with an exercise price of 1.1 cents each,

(together, the Offer).

The prospectus detailing the Offer has been lodged with ASX and is available on both the ASX website (www.asx.com.au) and the Company's website (www.cfcl.com.au). 

Qualifying Shareholders

Only those shareholders recorded on the Company's share register at the Record Date with an address in Australia or New Zealand will be entitled to participate in the rights issue (Qualifying Shareholders).

The Company has determined that it is unreasonable to make offers to shareholders under an Australian prospectus other than to Qualifying Shareholders, having regard to the number of shareholders outside of Australia and New Zealand, the number and value of the shares that would be offered and the cost of complying with legal and regulatory requirements outside of those countries.

The Company wishes to inform you that, given that you do not have a registered address in Australia or New Zealand, you are not a Qualifying Shareholder and therefore are not entitled to participate in the Offer.

Additional information

If you have any queries at this time, please phone Computershare on 1300 850 505 or phone our office on +613 9554 2300 or send an email to [email protected].

On behalf of the Board, I take this opportunity to thank you for your ongoing support of the Company.

Yours sincerely

Mr Alasdair Locke

Chairman, Ceramic Fuel Cells Limited