Statement of reasons

This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Securities Act (Contact Energy Limited) Exemption Notice 2003 (the principal notice) by amending its expiry date from 31 October 2008 to 31 October 2013.

The principal notice exempts Contact Energy Limited (Contact), and the NZX Firm that it appoints to act as its broker, from sections 37 and 37A of the Securities Act 1978 and from the Securities Regulations 1983, other than regulation 8. The principal notice concerns a dividend reinvestment plan (referred to in the principal notice as a share top-up plan), under which certain smaller shareholders of Contact can choose to convert dividends to be paid to them by Contact into previously allotted shares in Contact. The notice is subject to a number of conditions.

The Securities Commission considers that it is appropriate to extend the term of the principal notice because—

• there is no economic difference between the types of dividend reinvestment schemes exempted by the Securities Act (Dividend Reinvestment) Exemption Notice 1998 (a class notice involving newly issued shares) and the share top-up plan provided in the principal notice (which involves previously allotted securities):

• the share top-up plan gives all eligible shareholders the option of easily reinvesting dividends without incurring brokerage or other charges:

• there will be no dilution of existing shareholdings because the share top-up plan involves only previously allotted securities.