Tilt impairment requires change to recommendation

Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
22 October 2018



Significant impairment reported by Tilt Renewables requires change to Independent Directors’
recommendation

On 19 October 2018, Tilt Renewables Limited ("Tilt Renewables") announced that it expects to write-
down the carrying value of its Australian windfarm assets by A$125 - A$130 million. This is
equivalent to a reduction in value of NZ$0.43 – NZ$0.45 per share and represents
approximately 12% of the value of the Australian generation assets.

Infratil believes that adjusting the Northington Partners independent adviser report for the
updated assumptions would put the TLT JV’s offer price of NZ$2.30 per share well within a
revised independent fair value range. Tilt Renewable’s Independent Directors should therefore
urgently update their Target Company Statement recommendation.

Tilt Renewables announced that the impairment has resulted from reductions in expected prices for
large-scale generation credits and forward electricity prices since its last reporting period of 31 March
2018. The 30 September 2018 valuation has been prepared by Tilt Renewables’ independent
accountant, Deloitte, and has also been reviewed by Tilt Renewables’ auditor,
PricewaterhouseCoopers.

The announcement reinforces Infratil's view that the independent Adviser's Report prepared by
Northington Partners does not accurately reflect Tilt Renewables’ current value. As a result, Infratil
believes the Independent Directors of Tilt Renewables should urgently revisit the Northington Partners
fair value range and that the Independent Directors should update their recommendation to Tilt
Renewables shareholders in relation to the TLT JV takeover offer. This will enable Tilt Renewables
shareholders to make a fully informed decision whether to accept the takeover offer before the offer
closes on 29 October (unless extended in accordance with the Takeovers Code).

Infratil also highlights the following key points:

• Infratil maintains that the valuation prepared by Northington Partners is overly optimistic and is
not supported by market benchmarks. Deloitte’s review is further evidence that Northington
Partners have used assumptions that do not adequately reflect the risk profile of Tilt
Renewables, including discount rates that are inconsistent with those that will be applied for Tilt
Renewables’ 30 September financial statements.

• Infratil believes the Independent Directors of Tilt Renewables have fundamentally understated
the risks associated with the business by taking an overly optimistic view on the outlook of the
renewables sector in Australia and New Zealand. The material impairment of the Australian
windfarms a month after the release of the Tilt Renewables Target Company Statement
underlines the risks associated with investing in a company exposed to increased regulatory
and political uncertainty.


Any enquiries should be directed to:

Mark Flesher, Investor Relations, Infratil Limited
mark.flesher@infratil.com