CHORUS LIMITED — Capital/Financing Update 2013

Nov 25, 2013

Chorus Limited Level 9 Datacom House 68-86 Jervois Quay P O Box 632 Wellington New Zealand

Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

26 November 2013

Notification of issue of CFH securities

Chorus Limited has issued further Crown Fibre Holdings (CFH) securities as per the attached notice.

ENDS

For further information:

Andrew Hopkinson Treasurer Mobile: +64 (27) 249 5678 Email: Andrew.hopkinson@chorus.co.nz

Appendix 3B

New issue announcement. application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Chorus Limited ("Chorus")

ABN

152 485 848

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

	be issued	Class of securities issued or to CFH Equity Securities, CFH Debt Securities & CFH Warrants
$\overline{2}$	Number of + securities issued or maximum number which may $ 5,814,718$ Debt Securities be issued	to be issued (if known) or $ 5,814,718$ CFH Equity Securities 342,499 CFH Warrants

Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if *convertible securities. the conversion price and dates for conversion)

$\overline{\mathbf{3}}$

The CFH Equity Securities are redeemable preference shares carrying no right to vote at meetings of holders of ordinary Chorus shares, but entitle the holder to a right to a repayment preference on liquidation.

The CFH Debt Securities are unsecured, non interest bearing and carry no voting rights at meetings of holders of ordinary Chorus shares.

The CFH Warrants are an option to acquire ordinary shares in Chorus on a specified exercise date at a set strike price.

The terms of the issue for the CFH Equity Securities, CFH Debt Securities and the CFH Warrants are as set out in the the subscription agreement between Chorus and Crown Fibre Holdings Limited (CFH) dated 9 November 2011 (Subscription Agreement). Further details are set out on pages 139 to 142 of the demerger Scheme Booklet dated 13 September 2011 and available at

http://www.chorus.co.nz/file/4926/schemebooklet.pdf

⁺ See chapter 19 for defined terms.

$\overline{4}$	Do the securities rank equally in all respects from the + issue date with an existing + class of quoted securities?	CFH Equity Securities No.
	If the additional *securities do not rank equally, please state: the date from which they do the extent to which they e participate for the next dividend, (in the case of a distribution) trust, Or interest payment	On a liquidation or winding up of Chorus, holders of CFH Equity Securities will have the right to repayment of the issue price ranking behind creditors of Chorus but ahead of the ordinary Chorus shares. The CFH Equity Securities will otherwise carry no right to share in the surplus assets of Chorus on winding up or liquidation.
	the extent to which they do not rank equally, other than	CFH Debt Securities
	relation to the next in
	dividend, distribution Оľ interest payment	No.
		The principal amount of each CFH Debt Security will consist of a senior portion, equal to the present value of the sum repayable on the CFH Debt Security, and a subordinated portion equal to the remainder or the face value. The senior portion will rank equally with all other unsecured, unsubordinated creditors of Chorus. The subordinated portion will rank below all other indebtedness of Chorus. On winding up, dissolution or liquidation of Chorus, no payment shall be made to holders of CFH Debt Securities in respect of the subordinated portion until all other indebtedness of Chorus is repaid in full. CFH Warrants
		N/a
5	Issue price or consideration	\$NZ1.00 per CFH Equity Security \$NZ1.00 per CFH Debt Security Nil per CFH Warrant
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Call notice issued by Chorus to Crown Fibre Holdings Limited ("CFH") on 21 November 2013 pursuant to the terms of the Subscription Agreement. The funds are to be used by Chorus in the construction of the Ultra-Fast Broadband network in New Zealand.

6a	Is the entity an + eligible entity has obtained security that holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the *securities the subject of this Appendix 3B, and comply with section 6i	N/a
6b	The date the security holder resolution under rule 7.1A was passed	N/a
6c	Number of + securities issued without security holder approval under rule 7.1	N/a
6d	Number of + securities issued with security holder approval under rule 7.1A	N/a
6e	Number of + securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)	N/a
6f	Number of + securities issued under an exception in rule 7.2	N/a
6g	If + securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the *issue date and both values. Include the source of the VWAP calculation.	N/a
6h	If + securities were issued under rule for 7.1A non-cash consideration, state date on valuation which of consideration was released to ASX Market Announcements	N/a
6i	Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A - complete Annexure 1 and release to ASX Market Announcements	N/a

⁺ See chapter 19 for defined terms.

$\overline{7}$ ⁺Issue dates

Note: The issue date may be prescribed by
ASX (refer to the definition of issue date in
rule 19.12). For example, the issue date for a
pro rata entitlement issue must comply with
the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

$\,8\,$ Number and ⁺class of all *securities quoted on ASX (including the ⁺securities in section 2 if applicable)

25 November 2013 for each of the CFH Equity Securities, CFH Debt Securities and the CFH Warrants

Number	+ Class
396,369,767	fully paid ordinary shares

		Number	+ Class
9	Number and + class of all	80,517,242	CFH Equity Securities
	*securities not quoted on ASX		(unquoted)
	(including the + securities in
	section 2 if applicable)	80,517,242	CFH Debt Securities
			(unquoted)
		4,210,169	CFH Warrants
			(unquoted)
10	Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	CFH Equity Securities
			To the extent they have not been redeemed,
		dividends will become	payable on an
			increasing proportion of the CFH Equity
			Securities from 2025 onwards. The dividend
			rate on the CFH Equity Securities will be equal
		annum.	to a reference rate plus a margin of 6% per
			Chorus is not obliged to declare any dividend
			on CFH Equity Securities in respect of any
			period, but if it does not make a scheduled
			dividend on the CFH Equity Securities it may not make any distribution on ordinary shares
			until a subsequent dividend on the CFH
			Equity Securities is paid in full. The dividends
			payable on the CFH Equity Securities are non-
		cumulative.
			If at any time Chorus' credit rating is three
			notches or more below its initial rating, no
			dividends will be scheduled or payable on the
		CFH Equity Securities.
			Details of the dividends for the CFH Equity
			Securities are set out on pages 140 to 141 of the
			demerger Scheme Booklet dated 13 September
		and 2011	available at http://www.chorus.co.nz/file/4926/scheme-
		booklet.pdf
		CFH Debt Securities
		N/a
		CFH Warrants
		N/a

Part 2 - Pro rata issue

⁺ See chapter 19 for defined terms.

11	ls	security	holder	approval
		required?

• Is the issue renounceable or non- $\sqrt{\frac{N}{a}}$ $12\,$ renounceable?
• Ratio in which the $+$ securities $N/a$ 13 will be offered
• ⁺Class of ⁺securities to which the $\sqrt{\frac{N}{a}}$ $14$ offer relates
• $+$ Record date to determine $N/a$ 15 entitlements
• 16 Will holdings on different $N/a$ registers (or subregisters) be aggregated for calculating entitlements?
• Policy for deciding entitlements $N/a$ $17$ in relation to fractions
• 18 Names of countries in which the $\sqrt{\frac{N}{a}}$ entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with.

Cross reference: rule 7.7.

• Closing date for receipt of $N/a$ 19 acceptances or renunciations
• Names of any underwriters $20$
• Amount of any underwriting fee $21$ or commission
• Names of any brokers to the $\sqrt{\frac{N}{a}}$ $22$ issue
• Fee or commission payable to $N/a$ $23$ the broker to the issue
• Amount of any handling fee $\sqrt{\frac{N}{a}}$ $24$ payable to brokers who lodge acceptances or renunciations on behalf of security holders

$N/a$

$N/a$

$N/a$

25	If the issue is contingent on security holders' approval, the date of the meeting	N/a
26	Date entitlement and acceptance form and offer documents will be sent to persons entitled	N/a
27	If the entity has issued options, and the terms entitle option holders participate to on exercise, the date on which notices will be sent to option holders	N/a
28	Date rights trading will begin (if applicable)	N/a
29	Date rights trading will end (if applicable)	N/a
30	How do security holders sell their entitlements in full through a broker?	N/a
31	How do security holders sell part of their entitlements through a broker and for the accept balance?	N/a

⁺ See chapter 19 for defined terms.

32	How do security holders dispose
	of their entitlements (except by
	sale through a broker)?

$N/a$

⁺Issue date 33

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• Type of ⁺securities $34$ (tick one)
• +Securities described in Part 1
• All other ⁺securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35

$(a)$

$(b)$

If the *securities are *equity securities, the names of the 20 largest holders of the additional ⁺securities, and the number and percentage of additional ⁺securities held by those holders

36

37

If the 'securities are 'equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$ 10,001 - 100,000 100,001 and over

A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38 Number of ⁺securities for which ⁺quotation is sought

⁺Class of ⁺securities for which 39 quotation is sought

40 Do the ⁺securities rank equally in all respects from the ⁺issue date with an existing ⁺class of quoted ⁺securities?

If the additional ⁺securities do not rank equally, please state:

• the date from which they do
• the extent to which they $\bullet$ participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do $\bullet$ not rank equally, other than in relation to the next dividend. distribution $O_T$ interest payment
• Reason for request for quotation 41 now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another *security, clearly identify that other +security)

$42$ Number and ⁺class of all ⁺securities quoted on ASX (including the ⁺securities in clause $38)$

Number	$+C$ lass

⁺ See chapter 19 for defined terms.

Quotation agreement

• ⁺Quotation of our additional ⁺securities is in ASX's absolute discretion. ASX $\mathbf{I}$ may quote the ⁺securities on any conditions it decides.
• We warrant the following to ASX. $\overline{2}$
• The issue of the 'securities to be quoted complies with the law and is $\bullet$ not for an illegal purpose.
• There is no reason why those 'securities should not be granted *quotation.
• An offer of the 'securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any *securities to be quoted and that no-one has any right to return any *securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the 'securities be quoted.
• If we are a trust, we warrant that no person has the right to return the $\bullet$ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the *securities be quoted.
• We will indemnify ASX to the fullest extent permitted by law in respect of any $\overline{3}$ claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• We give ASX the information and documents required by this form. If any $\overline{4}$ information or document is not available now, we will give it to ASX before *quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

== == == == ==

Sign here:

Date: 25 November 2013 (Director/Company secretary)

VANESSA OALLEY

Print name:

⁺ See chapter 19 for defined terms.

Market Information Services Section NZX Limited Wellington

Chorus Limited Level 9 Datacom House 68-86 Jervois Quay PO Box 632 Wellington New Zealand

26 November 2013

NOTIFICATION OF ISSUE OF SECURITIES

Notice from Chorus Limited ("Chorus") pursuant to Listing Rule 7.12.1.

Pursuant to Listing Rule 7.12.1 please be advised as follows:

(a) Class of Security:	CFH Equity Securities (unquoted)	CFH Warrants (unquoted)
ISIN: (b)	Not applicable	Not applicable
Number of (c) Securities issued:	5,814,718	342,499
(d) Issue price:	NZ\$1.00 per CFH Equity Security	Nil
(e) Payment:	Cash	Nil
(f) Amount paid up:	Paid in full	Not applicable
(g) Reason for issue:	Call notice issued by Chorus to Crown Fibre Holdings Limited (CFH) on 21 November 2013 pursuant to the terms of the subscription agreement between Chorus and CFH dated 9 November 2011 (Subscription Agreement)	Call notice issued by Chorus to CFH on 21 November 2013 pursuant to the terms of the Subscription Agreement.
$(h)$ % of the total class of securities issued:	1.25% of those CFH Equity Securities eligible to be issued under this programme	1.25% of those CFH Warrants eligible to be issued under this programme
Specific (i) authority for issue:	Board resolution passed on 3 April 2012	Board resolution passed on 3 April 2012
(i) Terms or details of issue:	The terms of issue are as set out in the Subscription Agreement. Further information regarding the terms of the CFH Equity Securities is set out in the demerger scheme booklet dated 13 September 2011,	The terms of issue are as set out in the Subscription Agreement. Further information regarding the terms of the CFH Warrants is set out in the demerger scheme booklet dated 13 September 2011, which is

Email: company.secretary@chorus.co.nz

	which is available at http://www.chorus.co.nz/file/4926/sch eme-booklet.pdf	available at http://www.chorus.co.nz/file/4926/s cheme-booklet.pdf
$(k)$ Total number of securities of the class in existence after the issue:	80,517,242 (unquoted)	4,210,169 (unquoted)
(1) Treasury stock (acquisition only):	Not applicable	Not applicable
(m) Date of issue:	25 November 2013	25 November 2013

Yours faithfully

Vanessa Oakley
General Counsel & Company Secretary