Castlepines Corporations strength comes from its willingness to invest its own equity and transferred capital into

each acquisition.

An International Investment Company

Directors and Partners

Directors and Partners

Grose Property Holdings a New Zealand company founded by David Grose in the mid-seventies, its sole activity has been property investment in office, industrial and retail buildings, during its 31-year span. Mr Grose heads the acquisition team for Castlepines Corporation. Starr Corporation Inc a US development company founded by E Wayne Starr, this entity has developed, managed and owned office buildings, hotels and condominiums constructed since the mid-sixties. Wayne Starr is now semi-retired near Aspen, USA; his son continues in active project management and development. Thomas Doo now in his early 80s, is retired in Auckland, New Zealand and is no longer actively investing.

Alan Whitehead a respected international, corporate and business banker with extensive experience in United Kingdom, South Africa, USA and Australia. He has held senior executive positions with Union Acceptances Ltd (merchant banking arm of Nedbank Limited, South Africa), National Australia Bank in the United States and Australia, and State Bank of New South Wales in Australia. Alan Whitehead is a Fellow of the Australian Institute of Banking and Finance, and a Fellow of the Australian Institute of Company Directors. Peter Irwin Phippen - has been actively involved in property development since 1979, undertaking a large number of predominantly residential development projects, on both an individual and joint-venture basis. He owns two Australian valuation practices and is development consultant to a large number of private and public development groups operating in Australias eastern states.

David Grose Founding Partner

Alan Whitehead

Peter Irwin Phippen

Company Background
Company Background
Castlepines Corporation is a consortium of various private companies and trusts that invest partner equity in a broad range of infrastructure assets. Founded in Australia, it now encompasses interest in assets in Asia (principally Japan, South Korea, and Taiwan), Europe (Russia, Ukraine, Serbia, Hungary, Germany and France), the United Kingdom, North America, Australia and New Zealand. The principals are Wayne Starr and David Grose. Executive control is held by David Grose as founding partner, having designed the trust to meet the needs of his partners and requirements of the banks, whilst also appointing advisers (28) in various countries (12) and acting as sole buyer for the group. Owing to the ages of the principals, a more conservative acquisition style from former years (of intense development, risk-taking and preference for undervalued assets capable of renovation) is now preferred and a common criteria under the Castlepines Corporation banner was developed by Grose Property Holdings to provide income to the superannuation funds of the principals. To this end, Grose Property Holdings acts as adviser and negotiator for all acquisitions. The criteria agreed by Castlepines Corporation and its bankers is quite straight-forward:

Investment Strategy

Investment Strategy

Castlepines Corporation is a US-Australian-UK consortium that invests principally but not solely in renewable energy resources. It is made up of private sector investors who seek to purchase long-term conservatively- yielding assets that provide a secure stream of passive income. Those assets, though infrastructure, are of a broad type and cover 3 main areas of: 1. Renewable Energy 2. Shipping, and 3. In-ground commodities. All assets must be: Over $100 million in purchase price Australia, New Zealand and Singapore (or 100 million for UK / 100 million for Europe) Leased by a strong entity for 20 years or longer. Shorter terms are possible but require a higher initial yield. Leased on a triple net lease structure (or bareboat charter basis if shipping) An agreed annual inflationary increase payable (at say, 3%) on rental The strong entity defined as rated by Standard & Poors at no lower than BBB (or investment grade) Note that the equivalant Moodys minimum rating is Baa2. Acceptable Risk Free of construction risk - achieved by fixed-priced turn-key contracts with known, substantial builders prepared to put up their balance sheet and a completion bond. Free of operational risk - achieved by known, substantial operators in the respective field being prepared to provide 20-year operations and maintenance agreements and/or a maintenance contract of the same period with an annual non-use fee; or the off-taker accepting step-in rights in the event there is a serious break in production. Free of feedstock risk - quantum and base price of any long-term feedstock needs to be supplied for the same term as the offtake (otherwise there exists a timing mismatch) plus be agreed by a very strong supplier with the floor and/or collar price to the feedstock to ensure affordability of it throughout the term.

Asset types As this consortium seeks passive income, its interest is broad and incorporates: Renewable Energy Geothermal power plants Waste-to-energy plants Biomass power plants Forests Wind-farms Bio-diesel power plants Bio-ethanol power plants Waste disposal plants Solar plants Water Assets Dams Pipelines De-salination plants Water purification plants Sewerage Systems Shipping - Tankers LNG Port Infrastructure Natural Resources Energy Assets New and existing forests Oil Iron ore Gas Gravel pits Coal Including these assets in-ground, plus the facilities to assist the above to operate Pipelines oil / gas Paper mills Smelters Refineries Oil rigs Plant and machinery Steel mills Service stations Coal-gasification plants Coal-loaders Other The breadth of other assets is wide and includes: Property office, industrial, retail Airport facilities / Aircraft Highways Telco infrastructure Rail infrastructure /Railway stations Railway Carriages Vineyards Theme parks Municipal chambers and facilities Hospitals Police Stations Universities / Schools Prisons Hotels Financial assets (including mortgage books and long-dated factoring)
2

Castlepines Corporations Service

Castlepines Corporations Service
Outside of the government/public arena, Castlepines Corporation provides corporations with the opportunity to retrieve large quantities of capital tied up in static assets and re-use those funds in more profitable areas. Assets/buildings can be sold to Castlepines Corporation, converted to cash, then leased back for long periods at historically the lowest yields/rental possible over the past 40 years. Assets removed from ownership that are passive, showing little growth and little return to the bottom line, will instead become highly valued liquidity that will improve corporations ratings and creditstanding with lenders and suppliers. Companies pressed for lack of cash may become highly liquid without raising debt or debt-levels and thereby decreasing annual outgoings and debt-service costs.

Capital Available
Capital Available
Castlepines Corporation has negotiated sizeable blocks of capital for minimum 20-year terms at highly competitive margins and rates, all fixed for the 20-year period through its bankers. This enables Castlepines Corporation to invest the capital requiring only relatively low yields, depending on asset type and whether land is leasehold or freehold. Castlepines Corporation has equity via associated entities that ensures its debt-level on commencement of a purchase is conservative and remains so throughout the life of any lease. Castlepines Corporation is well funded with sums of $50 million to $500 million available for each transaction. Larger sums are available provided they are invested in $500 million tranches. Significant equity is also available in multiple jurisdictions and therefore currencies, most notably US dollars, Pounds sterling, Yen and Euro, Singapore dollars, New Zealand dollars and Australian dollars. No guarantee of the principal is required from the vendor/lessee, purely the agreement to pay all rent on time. In a multitude of areas, public funds are forever demanded and locked up for long periods of time,

Investment Where Bank Debt Precedes Castlepines Corporations Equity All of Castlepines Corporations capital is equity. In the case of certain investments eg. a mine or steel mill, it may be required to utilise Castlepines Corporations equity as the final component of investment or development, whereby significant bank/senior debt precedes the equity invested by Castlepines Corporation. This is acceptable, though may require a profit-sharing arrangement owing to the high leverage of the project. In this case also, Castlepines Corporations equity would be long-term passive investment. Castlepines Corporation is seeking only conservatively-leased assets and is not sensitive to pricing of those assets, therefore normally not requiring market valuation prior to purchase. Of importance to Castlepines Corporation is a stable basic yield, small annual inflationary increases and all income being net of outgoings/costs. Where a company wishing to do business is not rated at all, or its rating is too low (ie below BBB by Standard & Poors), Castlepines Corporation may deal with that company provided it sells its product or service to an off-take party that is rated BBB or above. Agreements to buy or supply the

often decades, over-burdening the public sector whilst Castlepines Corporation has relatively lowcost private equity that it is happy to place as a long-term investment with only a low annual yield required. This enables a great deal of public sector assets to have its wealth liberated, the capital returned to Government and those funds deployed in more needed areas. The requirement for related future Government capital expenditure is also removed and taken over by Castlepines Corporation.

product/resource/service over 20+ year periods are then required to secure revenues for Castlepines Corporation.

Shipping and Associated Assets

Shipping and Associated Assets
Grose Property Holdings also acts as adviser and negotiator for all shipping and associated facilities acquisitions. The criteria agreed by Castlepines Corporation and its bankers is quite straight-forward: All assets must be: Over $100 million in purchase price Leased by a strong entity for 20 years or longer. Shorter terms are possible but require a higher initial yield. Leased on a bareboat charter basis The strong entity defined as rated by Standard & Poors at no lower than BBB* (Note that Moodys Baa2 is the equivalent minimum rating) All maintenance issues and daily operations are handled and paid by the charterers. Castlepines Corporation has no expertise in ship and facilities management and will neither bid for nor is interested in this during the term of the charter. Its role is to be purely passive investor. Assets require use and profit extraction, not ownership, which shows little growth and little return to the bottom line. Instead, utilising Castlepines Corporation equity, they become highly

Gifting Provision/Buyback Provision At the end of the charter period Castlepines Corporation is prepared to gift 50% ownership in each vessel to the charterer. It is unlikely that any asset will be sold by Castlepines Corporation prior to 20 years. Castlepines Corporation, though not requiring it from a vendor, is prepared to offer a buy-back arrangement whereby the charterer has the first right of re-purchase of the remaining 50%, with, if need be, a formula for how the price is set, agreed in advance of the sale to Castlepines Corporation. Lease Type A bareboat charter is required, with monthly rental payable in advance, and annual CPI or say, 3% pa increases, whichever is the greater. Castlepines Corporation is prepared to make available in advance all the capital required to permit the upgrade or replacement of vessels once or twice throughout the charter, so that the life and effectiveness is maintained until charter end. Plant/Equipment/Wiring/Depreciating Assets A conservative yield also is required for these asset types, though marginally above property yields.

valued liquidity that will improve corporations ratings and credit-standing with lenders and suppliers. Maritime companies pressed for lack of cash may become highly liquid without raising debt or debt-levels and thereby decreasing annual outgoings and debt-service costs. In market downturns such companies will have unused credit still available with its bankers, having used Castlepines Corporations credit and equity instead, plus the cash reserves provided by Castlepines Corporations purchase of vessels.

Corporate Philosophy
Corporate Philosophy
As Advisor Internally, Castlepines Corporation advises its affiliates and associated companies of the best time for them to invest their surplus capital or to divest themselves of a large proportion of their real estate holdings and repatriate funds to other activities. Investor Castlepines Corporation acts principally as the adviser and partial investor in each asset. Castlepines Corporation's strength comes from its willingness to invest its own equity profits and transferred capital into each acquisition and to back investment in real rather than in theoretical terms. On Accounting Stringent monthly reporting requirements indicate great emphasis from the parent company that assets be managed with initial objectives in mind without excuse, that projections be met without subsequent watering down of those projections. The financial projections on the company's activities in each asset including leasing and financial trends, will become the basis for a comprehensive operating program for each asset and for the implementation of renovation/upgrading strategies as needed.

Acquisition Philosophy (In real estate) Castlepines Corporations philosophy is to ferret out opportunities available on a wide range of different markets where economic and market conditions suggest that property is not at the time the most appropriate or attractive investment medium. We are attracted to adverse market conditions that offer high yield and profit potential. Summary Castlepines Corporation is looking for a secure revenue base. In essence, well-located assets with excellent tenants, reliable revenue and above average returns. Importantly, a strong and virtually assured potential to increase the capital value of any acquisition is paramount.

Sound management requires comprehensive accounting and reporting procedures for the benefit of our investment partners and lenders. Annual operating budgets and asset management plans will be prepared in advance and monthly financial statements are compiled in conformity with the strictest accounting principles and income tax requirements. The emphasis will remain on safety of yield, then capital profit.

Castlepines Corporation
Australia Head Office Level 6 49-51 York Street Sydney NSW 2000 Lawyers Bruce and Stewart Level 2 299 Elizabeth Street Sydney NSW 2000 Tax Lawyers TT Legal Level 10 530 Little Collins Street Melbourne Victoria 3000 Global Shipping Advisers Marine Capital Corporation Australia UK Lawyers Norton Rose London USA Lawyers King and Spalding Houston Japan Lawyers Yoshida and Partners Tokyo Hong Kong Tax Advisors Nelson Wheeler

Castlepines Corporation

www.castlepines.com.au