Media Releases

• Company continues to realise investments and repay debt
• Discussions under way with Company’s banks to extend term of debt facility
• Shipping asset class still languishing
• Strong Australian Dollar leads to unrealised foreign currency loss
• Half year accounts to be released 10 February 2011

Investments Portfolio

Keybridge Capital currently is not undertaking new investments. It is managing its existing portfolio with the aim of bringing forward repayments, so as to reduce the Company's level of debt. Where this is not practicable, the Company is seeking to protect the value of its investments as much as possible.

Since the last quarterly update, Keybridge has received investment repayments totalling $10 million, spread as follows:

• $5 million from the Company’s two remaining US property investments; and
• $5 million from two lending transactions.

These repayments, in aggregate, have been at levels slightly above the Company's carrying values at 30 June 2010.

As a result of repayments and movements in foreign exchange rates, but before considering changes in carrying values, the composition by asset class of Keybridge's investments portfolio as at the date of this report is approximately as follows:

The updated carrying value of all investments will be considered in finalising the Company’s half year accounts to 31 December 2010. Most investments are performing as anticipated at the last balance date of 30 June 2010. Exceptions would include the following:

• The shipping asset class continues to underperform, with the demand for vessels in certain sectors failing to keep pace with the number of new ships being built. The six vessels underpinning Keybridge’s shipping investments are all chartered, with lease payments up-to-date. Ship prices, however, remain under downward pressure and this is likely to affect the Company’s carrying values for these investments.
• In late December 2010, the Spanish Government announced measures to reduce the subsidies available to solar electricity facilities, including those already installed. The measures involve a retrospective change in legislation and will have some impact on the carrying value of Keybridge’s last remaining infrastructure investment.

Debt Facility

The outstanding principal amount under Keybridge's corporate debt facility is approximately $112 million. Under the terms of the debt facility, repayments of $70.5 million were required to be made by March 2011. Repayments already achieved total approximately $83 million, meaning that all interim repayment obligations have been satisfied.

The debt facility matures in June 2011. The Company is in discussions with its banks about extending the maturity of the facility.

Cashflow

Keybridge continues to have a shortfall between its operating income and its fixed commitments of bank interest and operating costs. This shortfall has been more than accommodated up until now from the cash proceeds raised from the realisation of investments. This should continue to be the case over the next 12 months.

Currency Exposure

The approximate currency breakdown of the Company’s assets and liabilities, prior to considering any changes in the carrying value of investments, is as follows:

This net foreign currency asset position means that the Company incurs translation losses when the Australian Dollar appreciates in value against the US Dollar and Euro. From 30 June 2010 to the end of December, the Australian Dollar appreciated substantially against these currencies. This resulted in an unrealised foreign currency loss for the Company of approximately $13 million.

Half Year Results

Keybridge expects to release its results for the six months to 31 December 2010 on Thursday, 10 February 2011. The combined effect of the loss from foreign currency, the shortfall in operating income and some likely diminution in carrying values is that the Company will declare a loss for the half year to December.

Keybridge Capital is a financial services company that has invested in, or lent to, transactions which predominantly are in the core asset classes of property, aviation, shipping and infrastructure.

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