Speakers and agenda. Speakers Mike Bennetts Chief Executive Mark Edghill Chief Financial Officer Richard Norris Treasurer

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2 Disclaimer This document does not constitute a recommendation by ANZ National Bank Limited, Craigs Investment Partners Limited, Forsyth Barr Limited or Westpac Banking Corporation, acting through its New Zealand branch (together the Joint Lead Managers ), Trustees Executors Limited ( Bond Trustee ) or any of the directors, officers, employees or agents of the Joint Lead Managers, the Bond Trustee or Z Energy Limited ( Issuer ) to subscribe for, or purchase, any of the Bonds. None of the Issuer (except as required by law), the Joint Lead Managers or the Bond Trustee, nor any of their respective directors, officers, employees or agents, accepts any liability whatsoever for any loss arising from this document or its contents or otherwise arising in connection with the Offer. This document is for preliminary informational purposes only and is not an offer to sell or the solicitation of an offer to purchase or subscribe for the Bonds and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information in this document is given in good faith and has been obtained from sources believed to be reliable and accurate at the date of preparation, but its accuracy, correctness and completeness cannot be guaranteed. You should not decide to purchase the Bonds until you have read the Simplified Disclosure Prospectus dated 4 July 2012 relating to the Bonds. The Issuer intends to offer the Bonds to the public in New Zealand. No action has been or will be taken by the Issuer which would permit an offer of Bonds, or possession or distribution of any offering material, in any country or jurisdiction where action for that purpose is required (other than New Zealand). The Bonds are senior, secured, fixed rate debt obligations of the Issuer. The Bonds rank equally with each other and the existing Series of bonds issued by the Issuer. Bondholders and Z Energy s banks share the same security on an equal ranking basis, with both groups ranking behind security held by suppliers of crude oil and refined products over products each of them has supplied, and their proceeds, to the extent that it has not received payment of the purchase price, and behind statutorily preferred creditors and (in certain circumstances) other working capital providers. Application has been made to NZX Limited ( NZX ) for permission to quote the Bonds on the NZDX market and all the requirements of NZX relating thereto that can be complied with on or before the date of distribution of this document have been duly complied with. However, NZX accepts no responsibility for any statement in this document. NZX is a registered exchange, and the NZDX is a registered market, each regulated under the Securities Markets Act Capitalised terms used in this document and not otherwise defined have the meanings given to them in the Simplified Disclosure Prospectus. No applications will be accepted or money received unless the subscriber has received the Simplified Disclosure Prospectus. 2

3 Speakers and agenda Speakers Mike Bennetts Chief Executive Mark Edghill Chief Financial Officer Richard Norris Treasurer Agenda Offer highlights Z Energy Business overview Business model Business operations Brand Financial overview Security structure and other key Bond terms Issue timetable 3

4 Offer highlights Issuer Bonds Security Z Energy Limited Senior, secured, fixed rate bonds Equal ranking with Z Energy s Banks and existing bondholders Issue Size Up to $100m with oversubscriptions of up to $50m Maturity Interest Rate Rating Quotation Joint Lead Managers 15 November 2019 (~7 years) 6.50% p.a. paid quarterly in arrears Not rated Application to quote the Bonds on NZDX has been made ANZ Craigs Investment Partners Forsyth Barr Westpac Institutional Bank 4

5 Business overview Strategically important New Zealand energy company Stable margin business Operation of substantial logistical and distribution infrastructure 300 retail service stations and truck stops, pipelines, fuel terminals, 17.14% holding in New Zealand s only oil refinery at Marsden Point and 25% holding in Loyalty NZ (Flybuys) Market leader in most segments in which it operates Distributes circa one third of New Zealand s total fuel One of New Zealand s most visible brands Locally owned and operated 5

6 Business model Z Energy is a stable margin business Profitability: buy-sell margin, minus the costs associated with processing, transport, storage, distribution and retailing Prices at which product is purchased and on-sold move together - substantially reduces the risk associated with fluctuations in international oil prices or the value of the NZD Z Energy will be targeting investment opportunities and earnings growth, supported by shareholders 6

7 Business model cont. Defining characteristic of the New Zealand fuels market is the relative stability of consumption and the muted impact of price over the long term Consumption more recently has declined, potentially as a result of general economic downturn 7

8 Business operations Procurement and inventory Imports ~ 2 billion litres crude and 500m litres refined products p.a. Inventory varies ~ 300m - 650m litres 31 March m litres valued at $671m 2011 ran a competitive procurement process for the supply of finished products Crude oil - arrangement with Shell until at least April 2013 Well placed to benefit from competitive global crude supply markets Refining and National Distribution 17.14% holding in NZRC market value $130m-$230m during FY2012 Circa 75% of the fuels distributed by Z Energy are refined locally NZRC $365m project investment self funded Refined fuels are distributed nationally by pipeline, road and coastal tankers 8

9 Business operations cont. Terminals, storage and regional distribution Fuel is stored and distributed from 12 owned or leased terminals around NZ Distributed from the terminals by contracted road haulage to retail petrol stations, truck stops and directly to commercial customers Jet fuel delivered to Auckland Airport by pipeline Marine fuels distributed from port storage, road tankers and barges Retail delivery Z Energy has ~208 retail service stations (owned or leased) ~50% of Z Energy s total fuel volumes are distributed through the retail channel Each Z service station dispenses ~5.8m litres of fuel per year (on average), almost twice the average of the rest of the industry Service station operating model: paid a cents-per-litre fee on fuel sales / share of shop sales / meet some of the operating costs Intense competitive pressure customers choose which company they wish to support based on convenience, quality of fuels and products, service, price and loyalty schemes 9

10 Business operations cont. Commercial delivery Owns and operates 94 truck stops across New Zealand ~50% of Z Energy's fuel sales are for commercial use e.g. shipping, fishing, jet aircraft, construction, farming and land transport Commercial customer fuel is delivered direct, in many cases to bulk storage tanks International and domestic jet aircraft customers are supplied at Auckland and Christchurch airports Network of 51 general aviation refuelling facilities International shipping customers are supplied via: Purpose-built bunkering barge based in Auckland harbour Other ports via pipelines from bulk terminals Direct delivery to domestic fishing customers in the key fishing ports of Dunedin, Timaru, Nelson and Auckland 10

11 Z Energy brand All retail service stations have been rebranded all commercial sites expected to be complete by mid July 2012 With the new Z brand comes a commitment to customer service, overhauled food, coffee and convenience offers, support for local neighbourhoods and world-class fuels Within a flat to declining market over FY12, Z Energy has outperformed industry averages in fuel volume sales in a highly competitive market Z Energy won the Supreme Award in the Deloitte Energy Company of the Year Awards in August 2011 and is a finalist in three categories in the 2012 Awards Z Energy already has outperformed all competitors in terms of customer satisfaction (Canstar customer satisfaction survey, July 2012) 11

12 Financial performance 12

13 Financial position 13

14 Financial position Significant headroom in relation to existing covenants Assuming total debt (including fair value of derivatives) as at 31 March 2012 of $410m, Covenant EBITDA would need to fall by ~ $38m (22%) to breach the bank covenant and ~$58m (33%) to breach the Bond Covenant Guidance has been provided that Z Energy anticipates Current Cost earnings to be higher in the financial year ended 31 March 2013 than the financial year ended 31 March

15 Group and security structure Z Energy Group members provide security to the Bondholders, Banks and crude oil and refined product providers Z Energy main operating entity Z Energy Holdings % holding in NZRC 15

16 Bond security structure The Bond Security Structure remains unchanged from the two previous issues Equal Ranking Security Rights Z Energy has bond and bank debt, with both sets of lenders sharing the same security on an equal ranking basis, including this issue Generally, Bondholders Security rights will be amended (without Bondholder consent) if the Banks agree to the amendment If the Banks release the Security completely, Bondholders Security rights will be replaced by a negative pledge, equivalent to what the Banks receive at that time Security consists of at least 95% of the assets of the group by value and by contribution to EBITDA The Bonds are fully and unconditionally guaranteed by Aotea Energy Limited, Z Energy Holdings Limited, Z Energy Limited, Harbour City Property Investments Limited, Mini Fuels & Oils Limited and Greenstone Energy Finance Limited ( Guarantors ) The guarantee is secured over all assets of the Guarantors, except for certain excluded assets The ultimate owners of the Z Energy Group, New Zealand Superannuation Fund and Infratil, do not guarantee the Bonds A key protection for Bondholders is the cross default provision, and that they share the proceeds of Security enforcement with the Banks on an equal ranking basis 16

17 Priority of security Existing crude oil and refined product suppliers have prior ranking security over products they have supplied to Z Energy (and the proceeds of these products) for which they have not been paid. Bondholders and Banks then rank equally. In certain circumstances, other working capital providers/funders may also obtain priority. In addition, if an Event of Default occurs and Z Energy is to continue trading: In practice, it will need to continue to procure products, and it may need to grant priority over those products to the relevant suppliers/working capital providers The Bond Trustee may, if it considers it in the best interests of Bondholders as a whole, allow any supplier/working capital provider to take priority over relevant products No such arrangement exists at present Priority of repayments of working capital during breach of Bond Covenant In practice, any repayment of the Banks' Facilities before security enforcement will repay working capital facility and hedging obligations first Only when these and similar amounts are repaid, will core bank debt be repaid If security is enforced before the Debt Covenant breach is remedied, Banks and Bondholders share (a) security enforcement proceeds, and (b) core bank debt prepayments made after the breach occurred, in proportion to the total amount of debt each provides Proportional sharing of core debt repayments does not apply to repayments of working capital or hedging obligations, or to scheduled repayments of core bank debt 17

18 Bond repayment rights Bondholders have the right to require repayment if there is: A Change of Control of a key Z Energy Group entity Put option triggered if Infratil and the New Zealand Superannuation Fund, together with associates, cease to hold or control, in aggregate, more than 50% of the voting rights in the entity Put option not triggered if the Change of Control is an IPO Events of Default Breach of Bond Covenant currently Debt (excl. working capital)< 3.5x Current Cost EBITDA on two consecutive test dates The 3.5x varies with the bank covenants (plus 0.5x) but may not rise above 4.0x Bank covenant currently 3.0x (2012 calendar year) Material change of core business or breach of distribution stopper not remedied within 30 days Acceleration of the obligation to repay other debt exceeding $10m (cross default) or enforcement of the security Other typical events of default for Bonds of this nature refer to the SDP for more detail Z Energy has no contractual right to repay early 18

19 Debt overview Z Energy has four complementary funding arrangements $203m bank core debt facilities (secured) June 2014 ANZ, BNZ, HSBC, Westpac - same group for working capital $107m as at 31 March 2012 Proceeds of Bond issue to be used to repay bank debt and for general corporate purposes $350m bank working capital (secured) May 2014 $33m as at 31 March Term Debt Maturity Profile by calendar year Crude oil and refined product funding (standard 30 day vendor terms) $m $297m retail bonds $147m retail bonds (secured) October 2016 $150m retail bonds (secured) August Utilised Core Bank Debt Un-utilised Core Bank Debt Max Proposed Issue Retail Bond Issues 19

20 Key offer terms Issuer Bonds Security Z Energy Limited Senior, secured, fixed rate bonds Equal ranking with Z Energy s banks and existing bonds Issue Size Up to $100m with oversubscriptions of up to $50m Maturity Interest Rate Bond Covenant Distribution Stopper Change of Control Put Applications 15 November 2019 (~7 years) 6.50% p.a. paid quarterly in arrears Debt coverage ratio currently < 3.5x (Event of Default for breach on two consecutive test dates) While a Bond Covenant breach or Event of Default (Bonds / Banks) continues no distribution to a non guarantor Bondholder right to put all Bonds back to Z Energy if a Change of Control (other than an IPO) occurs Minimum $5,000 and multiples of $1,000 thereafter 20

21 Z Energy bonds and swap rates The term interest rate environment has changed significantly over the period Z Energy has been accessing the retail market Rates (%) Oct yr, 7.35% Aug yr, 7.25% New Nov 2019 ~7 yr 6.50% Jan 10 Jul 10 Dec 10 Jul 11 Dec 11 Jun Source: NZDX, Bloomberg Note: Historic swap rates are not an indication for the direction of future swap rates. Swap rate period shown from 1 January 2010 until 6 July

22 Issue process / issue timetable Brokerage Brokerage 0.75% Firm 0.50% Early Bird Interest Issue Mechanism Prospectus Registered Roadshow Firm Bids Due Book Build / Reservations Allocated Offer Opens SDP Hard Copies Delivered Closing Date (Issuer option to amend) Issue Date Quotation Payable at the Interest Rate, paid shortly after the Issue Date Firm allocation process 5 July July 12.00pm, Tuesday, 17 July 17 July 18 July 18 July 5.00pm, Friday, 10 August 15 August 16 August 22

23 Summary Key features of Z Energy and this offer: Locally owned and operated, strategically important New Zealand energy company Owns and operates substantial logistical and distribution infrastructure Stable margin business and market leader in most fuel sectors Targeting investment opportunities and earnings growth, supported by shareholders Experienced board and management team 6.50% coupon A free copy of the Simplified Disclosure Prospectus for the Bonds can be obtained by contacting the Joint Lead Managers 23