TerniEnergia announces its share capital increase to support and strengthen its industrial growth and resolves to request the admission to the star segment of Borsa Italiana

• The Board of Directors approves the project aimed at increasing the share capital, in one or more tranches, in cash, with the exclusion of pre-emption rights
• Called an extraordinary shareholders’ meeting to approve the share capital increase
• Approved the request for admission to the STAR segment of Borsa Italiana’s MTA market
• Exceeded all the targets of its industrial plan presented in November 2009 as a result of the favorable conditions in the photovoltaic market

The Board of Directors’ meeting of TerniEnergia S.p.A., a company operating in the renewable energy sector, held today, has resolved to submit to the extraordinary shareholders’ meeting a proposal to increase the Company’s share capital, into one or more tranches, in cash, for a maximum nominal amount of Euro 60,000,000.00, with the exclusion of shareholders’ pre-emptive rights pursuant to art. 2441, fifth paragraph, of the Italian civil code. The share capital increase is expected to be carried-out within 31st July, 2011, at a price to be determined on the basis of a bookbuilding process, in agreement with the Global Coordinator, taking into account, pursuant to art. 2441, sixth paragraph, of the Italian civil code, also the price of shares registered during the placement period, the quantity and the quality of the demand collected in the context of the private placement, the national and international securities market trend during the placement period and the indications received by the Global Coordinator, all the above in compliance with the current law provisions, and to be completed through a private placement addressed to Italian and foreign qualified investors, with the exclusion of the United States of America, Canada, Australia and Japan.

The share capital increase is an opportunity that TerniEnergia S.p.A. wants to exploit, provided that the market conditions allow to obtain an issue price reflecting the Company’s value and prospects with the objective to maximize the shareholders’ investments value.

This transaction fits with TerniEnergia’s growth strategy that it has been pursuing since the date of its incorporation and is aimed at:

– putting the Company into favorable economic and financial conditions in order to strengthen its leading position in the construction of industrial sized photovoltaic plants sector, also through the purchase of companies operating in the same field, and to further increase the power generation activity through the incorporation of new joint venture companies or the entry into foreign markets;

– increasing visibility in the market, also through the entry of qualified investors into its share capital, in order to develop the free float, trading volumes and liquidity, and to reduce the volatility of the stock;

– stressing the Company’s “public company” profile, due to the fact that, in case of a complete subscription of the share capital increase, the main shareholder, Terni Research S.p.A., will be diluted from currently 67.38% below 50% of the Company’s share capital;

– realizing to the fullest extent the value of the new shares through a bookbuilding process, in consideration of the expressions of interest collected, the seriousness of the proposals, their economic convenience and the investors’ quality;

– promptly taking advantage, through a private placement reserved to qualified investors only, of the best possible market conditions, also taking into account the high volatility of the financial markets, thereby also avoiding the lead time normally associated with any exercise of pre-emption rights by existing shareholders.

The financial resources collected through the share capital increase will be used by the Company for its own industrial development and not for reduction or changes in the financial indebtedness.

The Board of Directors has also resolved to submit to its Shareholders the request for admission of its ordinary shares to listing on the STAR segment of the Mercato Telematico Azionario, organized and managed by Borsa Italiana S.p.A.

The share listing transfer to the STAR segment reflects the Company’s desire to enter into a market characterized by a larger capitalization and liquidity, that will enable the Company to increase its competitive position and its visibility among the institutional investors, also at the international level, and to obtain a full assessment of its true economic value.

The admission to such a segment is subject to the satisfaction of certain requirements pursuant to art. 2.2.3 of the Regulation of the Market organized and managed by Borsa Italiana, mainly in terms of size, liquidity, information transparency, corporate governance (in this respect Paolo Ottone Migliavacca has been appointed lead independent director), economic strenght.

Stefano Neri, Chairman and Managing Director of the Group, commented as follows:

“Our company has been characterized since its incorporation for its ability in catching growth and development opportunities in its reference market. Over the years it was able to create a business model which ensured growing volumes and margins, thus overcoming the targets that were communicated from time to time to the market, always keeping a well balanced capital structure. Thanks to the significant growth as compared to the last year, overcoming our expectations and leading us to consider the forecasts in our last November industrial plan overcome too, the share capital transaction aims at creating the best conditions for strengthening the leading position already achieved in the market. At the same time, we want to grant the institutional investors access to the share capital. Although the share capital increase could determine a significant reduction of the controlling stake held by the main shareholder, such a transaction is deemed fully appropriate in order to support the strong trend of growth and to fully exploit the opportunities offered by the photovoltaic market. Notably, we believe that strong development potential that do still characterize this sector, both in Italy and abroad, as well as the undergoing strategy of diversification towards the power generation, put TerniEnergia in the best conditions for speeding up its growth path. Indeed, the Company wishes to construct on its own account and to sell industrial sized plants already connected to the electricity grid and fully in operation. The proposal to the shareholders’ meeting of approving the request of admission of the Company to the STAR segment completes our development project, and it shall permit to qualify our company between the top-notch Italian companies and to affirm ourselves in the industrial and financial international scenario, in order to create a higher value also for the benefit of the current shareholders”.

TerniEnergia S.p.A. will be assisted by BNP Paribas as Global Coordinator and Bookrunner in the placement of newly issued shares, by EnVent, as financial advisor, as well as by Norton Rose, as legal consultant.

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The Board of Directors approved the Report drafted pursuant to art. 72 of Consob Regulation no. 11971/1999 and art. 3 of Ministerial Decree no. 437/98 and it conferred the Chairman of the Board of Directors the power to call the shareholders’ meeting.

All the documents requested by the law in relation to the transaction shall be made available to the public according to terms and conditions set forth by the applicable laws.

In view of strengthening and growing the industrial perspectives of the Company, the Board of Directors of TerniEnergia S.p.A. renewed the services contract with the controlling company Terni Research S.p.A., concerning the lease of properties, the provision of legal and administrative services and the supply of ICT. Such a resolution was taken as a result of the need to have wider production spaces, catching the opportunity to concentrate the activity into a one single location, in Nera Montoro in Narni Municipality, that is characterized as an historical production center and by important infra-structural facilities (warehouse storages, electric station AT, offices, links to roadway and railway), industrial activities and management offices