VERBUND launches capital increase

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Capital increase of up to € 1 billion

Today, with the approval of the Supervisory Board, the Managing Board of VERBUND resolved on a capital increase from authorized capital with a total size of up to €1 billion.

“At market” rights issue

The capital increase will provide for subscription rights for VERBUND’s current shareholders with the subscription and offer price being determined in a bookbuilding process close to the current share price (“at market”). Each shareholder will be entitled to subscribe to as many new shares as required in order to maintain its shareholding in VERBUND after the capital increase. Since the total offer size may not exceed € 1 billion based on the Authorization Act passed on 20 October 2010, but at the same time should amount to € 1 billion, the number of new shares will be determined by the final subscription and offer price. The number of new shares will then be the result of dividing the total offer size of approx. € 1 billion by the subscription and offer price. The maximum subscription and offer price was set at € 35 per share. The subscription rights for new shares can be exercised from 9 - 23 November 2010. There will be no trading of subscription rights. The final subscription and offer price will be announced at the end of the bookbuilding period, which is scheduled to end on 24 November 2010. New shares from subscription rights not exercised will be offered in a public offering in Austria and a private placement to international investors outside Austria. The offer and subscription period will start, subject to today’s approval of the prospectus by the Financial Market Authority (FMA), on 9 November 2010 and run through 23 November 2010. Trading in the new shares on the Vienna Stock Exchange is expected to start on 26 November 2010. The new shares will be fully entitled to dividends starting from 1 January 2010. For further details please refer to the prospectus which is expected to be published on the VERBUND website today. 

Participation of the Republic of Austria and other major shareholders in the rights issue

The Republic of Austria will participate in the rights issue with a maximum amount of € 510 million in order to comply with the respective laws requiring it to maintain 51% shareholding in VERBUND. In addition, TIWAG-Tiroler Wasserkraft AG committed to exercise all its subscription rights. The syndicate between EVN AG and Wiener Stadtwerke Holding AG formed on 22 September 2010 publicly announced to exercise a substantial part of its subscription rights in order to maintain the syndicate’s shareholding in VERBUND at 25% plus two shares after the capital increase.

Rights issue to strengthen capital structure and execute investment programme

Wolfgang Anzengruber, CEO: “The proceeds from the capital increase will provide VERBUND with additional flexibility for the implementation of its long-term investment plan and will support our profitable growth. At the same time, the transaction will strengthen the capital structure of VERBUND and help secure a solid rating in “A” territory.

VERBUND’s investment plan comprises growth investments of approximately € 2.4 billion over the next six years. These include large hydro power projects such as the pumped storage plants Limberg II and Reißeck II, the completion of the CCGT plant Mellach as well as the important expansion of the high voltage grid in Austria. The investment programme is complemented by investments in Turkey and Italy.

VERBUND: One of the leading producers of electricity from hydropower in Europe

VERBUND is Austria’s largest power provider and one of the leading producers of electricity from hydropower in Europe. The company operates the largest supra-regional high-voltage grid in Austria with voltage levels of 110 kV, 220 kV and 380 kV. In addition, VERBUND is active in the important power markets Germany, Italy, France and the growth market Turkey. In 2009, VERBUND generated sales of € 3,483.1 million and had an operating result of € 1,042.3 million.

Disclaimer:

This document serves solely marketing purposes in Austria and does not constitute an offer of securities for sale, a solicitation of an offer to purchase or to subscribe for securities of VERBUND AG. A public offer of securities of VERBUND AG may only be made in Austria after publication of a prospectus prepared in accordance with the provisions of the Austrian Capital Markets Act.  Any orders for the purchase of securities of VERBUND AG received prior to the commencement of a public offer in Austria will be rejected. If a public offer of securities of VERBUND AG is made in Austria, a prospectus prepared in accordance with the Austrian Capital Markets Act will be published. 

This information is not for release, publication or distribution in or into the United States of America and may not be distributed to U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act")) or publications with a general circulation in the United States, except to persons reasonably believed to be qualified institutional buyers ("QIBs") as defined in Rule 144A of the Securities Act. This information does not constitute an offer of securities for sale, a solicitation of an offer to purchase or to subscribe for securities of VERBUND AG in the United States. The securities of VERBUND AG may not be offered, sold or delivered in the United States or to or for the account or benefit of U.S. persons, unless registered under the Securities Act or pursuant to an exemption from such registration.  The securities will not be registered under the Securities Act. There will be no public offer of securities of VERBUND AG in the United States.