SIETEL LIMITED — Proxy Solicitation & Information Statement 2009

Mar 1, 2009

Sietel Limited - ACN 004 217 734

NOTICE OF EXTRAORDINARY GENERAL MEETING

AND EXPLANATORY STATEMENT

AND PROXY FORM

IMPORTANT INFORMATION This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay.

If you wish to discuss any aspect of this document with the Company please contact the Company Secretary, Mr Richard Rees on (03) 9553 5740.

Notice of Extraordinary General Meeting

Notice is hereby given that a meeting of the members of Sietel Limited (Sietel or the Company) will be held at the Registered Office of the Company, 463-467 Warrigal Road, Moorabbin, Victoria on Wednesday 1st April 2009 commencing at 11.00 am.

The Explanatory Statement, which accompanies and forms part of this Notice describes the various matters to be considered.

Terms used in this Notice will, unless the context otherwise requires, have the same meaning given to them in the Glossary of Terms as set out in the Explanatory Statement.

Agenda

• 1. Welcome
• 1. Quorum
• 1. Proxies
• 1. Notice of Meeting
• 1. Special Business

The business of the Meeting is to consider and if thought fit, pass the following Resolution:

THAT for the purposes of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the sale of the business of designing, manufacturing and selling hot water products and associated assets of Sietel Limited (ACN 004 217 734) and Aqua-Max Pty Ltd (ACN 006 852 820) to Rheem Australia Pty Ltd (ACN 098 823 511) on the terms set out in the Sale of Business Agreement.

Note: Aqua-Max Pty Ltd is a wholly owned subsidiary of Sietel Limited.

Voting exclusion statement

Sietel will disregard any votes cast on the Resolution by:

• a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary or preference securities, if the Resolution is passed; and
• an associate of any of them.

However, Sietel need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting entitlement of Shareholders

It has been determined that under regulation 7.11.37 of the Corporations Regulations 2001 (Cth), for the purposes of the Meeting, shares will be taken to be held by the persons who are registered as holders at 7.00pm on Monday 30 March 2009. Accordingly, share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

Preference share voting

In accordance with Rule 4(d)(iii) of the Constitution, the holders of Preference Shares shall have the right to vote (either in person or by proxy) at the Meeting.

In accordance with Rules 4(e) and 66 of the Constitution, each holder of Preference Shares shall on a poll have four votes for each fully paid Preference Share held.

How to vote by proxy

If you do not plan to attend the Meeting in person, you may complete and return the Proxy Form that accompanies this Notice. A Shareholder entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies.

Where more than one poxy is appointed, each proxy must be appointed a specified portion of the Shareholder's voting rights. If a Shareholder does not specify the proportion or number of the Shareholder's votes, each proxy may exercise half the votes.

A proxy need not be a Shareholder of Sietel.

To be effective, the Proxy Form and any power of attorney or other authority (if any) under which the proxy is signed (or a certified copy of it) must be lodged at Sietel's registered office, 463-467 Warrigal Road, Moorabbin, not less than 48 hours before the time for holding the Meeting.

A proxy executed by a Corporation must be under seal.

Dated 26 February 2009

By order of the Board

Richard Rees Managing Director and Company Secretary

Sietel Limited - ACN 004 217 734

Explanatory Statement

This Explanatory Statement forms part of a Notice convening an Extraordinary General Meeting of the Shareholders of the Company to be held on Wednesday 1st April 2009. The Explanatory Statement is to assist Shareholders in understanding the background to and reasons for the Resolution proposed. Certain terms used in this Explanatory Statement are defined in Section 6.

1. INTRODUCTION

On 20 February 2009, Sietel Limited (Sietel) announced that it had entered into an agreement for the sale of the business of designing, manufacturing and selling hot water products and associated assets of Sietel and its wholly owned subsidiary, Aqua-Max Pty Ltd (Aqua-Max), to Rheem Australia Pty Ltd (Rheem) pursuant to the Sale of Business Agreement.

Completion of the transactions under the Sale of Business Agreement is conditional upon approval of the Australian Competition and Consumer Commission (ACCC) and approval by the Shareholders of Sietel.

By the accompanying Notice, an Extraordinary General Meeting of the Shareholders of Sietel is convened for Wednesday 1st April 2009 to consider and if thought fit approve the sale to Rheem.

2. RESOLUTION

Proposed Resolution

The Shareholders of Sietel will be asked to approve by ordinary resolution the following resolution in at the Extraordinary General Meeting:

THAT for the purposes of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the sale of the business of designing, manufacturing and selling hot water products and associated assets of Sietel Limited (ACN 004 217 734) and Aqua-Max Pty Ltd (ACN 006 852 820) to Rheem Australia Pty Ltd (ACN 098 823 511) on the terms set out in the Sale of Business Agreement.

Voting

In accordance with the Constitution of Sietel, the holders of Preference Shares in the capital of Sietel shall have the right to vote on the Resolution proposed.

Voting shall be by way of show of hands unless a poll is demanded by the Chairman of the Company or otherwise in accordance with the Corporations Act. On a poll the holders of Ordinary Shares will be entitled to cast one vote per Ordinary Share held, and the holders of Preference Shares will be entitled to cast four votes for each fully paid Preference Share held by the Shareholder.

Proxies

A Shareholder may appoint a proxy to vote on behalf of the Shareholder. Further details are set out in the Notice and Proxy Form attached to the Notice.

3. OVERVIEW OF THE TRANSACTION

Sale of Assets

Sietel and Aqua-Max agree to sell to Rheem the business of designing, manufacturing and selling hot water products and associated assets of Sietel and Aqua-Max. The sale does not include the sale of certain excluded assets.

Purchase Price

The Purchase Price to be paid by Rheem is $38,200,000, plus inventories (subject to adjustments for prepayments, capital expenditure and employee leave entitlements).

Conditions Precedent

Completion of the sale to Rheem is subject to satisfaction of the following conditions precedent:

• ACCC approval: confirmation by the ACCC that it does not propose to intervene in the acquisition of the business assets contemplated by the Sale of Business Agreement, with such confirmation not subject to any condition not acceptable to Rheem; and
• Shareholder approval: approval by the shareholders of Sietel Limited

The ACCC has been notified of the proposed transaction and is undertaking its investigations and enquiries. The Extraordinary General Meeting will consider a resolution to approve the transaction.

If the ACCC approval and Shareholder approval requirements are not satisfied on or before 15 May 2009 the Sale of Business Agreement may be terminated. If the ACCC approval is obtained, but the Shareholders of Sietel do not approve the transaction, Sietel will forfeit a $500,000 security deposit to Rheem.

Completion of the sale to Rheem will take place following satisfaction of the conditions precedent and finalisation of due diligence.

Employees

Rheem will, on or prior to Completion of the sale, make offers of employment to employees of Sietel and Aqua-Max involved in the Aqua-Max business (and listed in the Sale of Business Agreement).

Lease of Moorabbin Premises to Rheem

At Completion of the Sale of Business Agreement Rheem will enter into a lease of Sietel's Moorabbin premises for a period of up to five years (minimum two years) with a commencing rent of $1,000,000 per annum.

4. OPERATIONS OF SIETEL LIMITED

Sietel's principal activities under its ASX listing are:

Investment in industrial and commercial real estate, provision of leased facilities, and plant and management services to its controlled entities and management, evaluation and expansion of these and other business opportunities.

Sietel will, both up to and after Completion of the sale of the Aqua-Max business to Rheem, continue to conduct these activities. In particular, the proposed transaction does not involve a sale or disposal of Sietel's investment in:

• Sietel's extensive property portfolio in Moorabbin and Sunshine (Victoria) and warehousing in Sydney;
• Cook's Body Works Pty Ltd;
• The Cylinder Company Pty Ltd,

and Sietel will continue to manage, evaluate and expand these and other business opportunities.

5. ASX LISTING REQUIREMENTS: CHANGES TO ACTIVITIES (LISTING RULES 11.1, 11.2 AND 11.3)

Sietel, as a company listed on the ASX, must comply with the requirements of the Listing Rules.

Whilst it is not the view of Sietel, Listing Rule 11.1.3 (which applies in relation any significant change to the nature or scale of a listed company's activities) provides that if the ASX requires, the entity must meet the requirements in Chapters 1 and 2 of the Listing rules as if the entity were applying for admission to the official list.

Sietel is of the view that in the present circumstances this is not necessary. Sietel was listed (under its former name "Pyrox Limited") over fifty years ago, well prior to commencement of the Aqua-Max business, and will continue to invest in commercial property and other opportunities.

Sietel does not believe that the cost and restrictions on its operations of an application for readmission, and compliance with Chapters 1 and 2 of the Listing Rules, would be in the best interests of the Company, and it would not propose to undertake such an application.

6. GLOSSARY OF TERMS

Aqua-Max means Aqua-Max Pty Ltd (ACN 006 852 820).

Company means Sietel Limited (ACN 004 217 734).

Constitution means the constitution of Sietel.

Meeting means the Extraordinary General meeting to be held at 11.00 am on Wednesday 1st April 2009.

Notice means the notice of Extraordinary General Meeting which accompanies this Explanatory Statement.

Ordinary Shares means ordinary shares in the capital of Sietel.

Preference Shares means shares in the capital of Sietel issued in accordance with Rule 4(d) of the Constitution.

Resolution means the resolution set out in the Notice.

Rheem means Rheem Australia Pty Ltd (ACN 098 823 511).

Sale of Business Agreement means the agreement to sell the Aqua-Max hot water business to Rheem signed on 20 February 2009.

Shareholders means the shareholders of Sietel.

Sietel means Sietel Limited (ACN 004 217 734).

Sietel Limited ABN 75 004 217 743 Registered Office: 463-467 Warrigal Road, Moorabbin 3189

I/We……………………………………………………………………………………………

of………………………………………………………………………………………………

being a member/members of Sietel Limited and entitled to…………………………….

HEREBY APPOINT…………………………………………………………………………

…………………………………………………………………………………………………

of ………………………………………………………………………………………………

or in his/her absence, the Chairman of the Meeting as my/our proxy vote for me/us and on my/our behalf at the Extraordinary General Meeting of the Company to be held at the Registered Office of the Company, 463-467 Warrigal Road, Moorabbin, Victoria on Wednesday 1st April 2009 commencing at 11.00 am or at any adjournment of that meeting.

Unless otherwise instructed the proxy will vote as he or she thinks fit, or abstain from voting. If the Chairman is appointed proxy, he will vote all undirected proxies in favour of all resolutions. Should the member wish to direct the proxy how to vote, the following should be completed.

I/WE INSTRUCT MY/OUR PROXY TO VOTE AS INDICATED BELOW IN RESPECT OF THE FOLLOWING RESOLUTION:

THAT for the purposes of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the sale of the business of designing, manufacturing and selling hot water products and associated assets of Sietel Limited (ACN 004 217 734) and Aqua-Max Pty Ltd (ACN 006 852 820) to Rheem Australia Pty Ltd (ACN 098 823 511) on the terms set out in the Sale of Business Agreement.

	FOR	AGAINST	ABSTAIN
Adoption of the Resolution
As witness on this……………day of………………….2009
Signature…………………………………………………………

A Shareholder entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies. Where more than one poxy is appointed, each proxy must be appointed a specified portion of the Shareholder's voting rights. If a Shareholder does not specify the proportion or number of the Shareholder's votes, each proxy may exercise half the votes. A proxy need not be a Shareholder of Sietel.

To be effective, the Proxy Form and any power of attorney or other authority (if any) under which the proxy is signed (or a certified copy of it) must be lodged at Sietel's registered office, 463-467 Warrigal Road, Moorabbin, not less than 48 hours before the time for holding the Meeting. A proxy executed by a Corporation must be under seal.

In accordance with Rules 4(e) and 66 of the Constitution, each holder of Preference Shares shall on a poll have four votes for each fully paid Preference Share held.