BC95 Citi Fun 24

RNS Number:3530W
Powergen UK PLC
10 March 2004


Powergen Luxembourg Holdings Sarl launches bond purchase solicitation


Powergen Luxembourg Holdings Sarl (PLHS), Luxemburg, indirectly 100% owned by
E.ON AG, Dusseldorf, announced today that it is offering to purchase for cash
any and all of the outstanding debt securities set out in the table below, which
were issued by its wholly-owned subsidiaries in the Powergen and Midlands
Electricity groups. The cash tender offer will be made by wayof a solicitation
of offers to sell. PLHS is launching this offer to purchase lower-rated,
subsidiary debt as part of E.ON's financing policy to act as the main borrower
for the whole group.


The transaction demonstrates E.ON's continued commitment towards the efficient
use of funding sources and active balance sheet management. E.ON intends to
concentrate more of its debt at the parent company level, through this
solicitation, in line with its financing policy, whilst simultaneously allowing
it to achieve savings in its cost of finance. The solicitation also provides
bondholders with the opportunity to crystallise gains that have materialised as
the trading spreads on the specified bonds have converged towards those on bonds
issued by the parent company.


The tender period begins on March 10 and ends on March 18 for the GBP and EUR
bonds and on March 19 for the USD bond. The tender is to be done via the
relevant clearing system:


Issuer                    Bonds           Reference           Fixed Tender Illustrative
                                               Government Security Spread       Price*

Powergen (East Midlands)  US$409.5 million     UST 4.375%          +59bps       114.666
Investments           7.450% due 15 May,   May 15, 2007
                          2007

Powergen UK plc           EUR500 million       DBR 4.5%            +35bps       107.132
                          5.000% due 8 July,   4 July, 2009
                          2009**

Powergen UK plc           GBP250 million       UKT 7.50%           +38bps       107.744
                          8.500% due 3 July,   7 December, 2006
                          2006**

Midlands Electricity plc  GBP150 million       UKT 7.25% +46bps       107.752
                          7.375% due 14
                          November, 2007**     7 December, 2007

Powergen UK plc           GBP250 million       UKT 8.00%           +77bps       110.079
                        6.250% due 29 April, 7 June, 2021
                          2024**


*Based on adding the Fixed Tender Spread to the bid yield to maturity of the
Reference Government Security quoted as of 9 March and converting to a price.


** The solicitation of offers to sell with respect to these bonds is not being
made in the United States of America as more fully explained below.


The solicitation of offers to sell with respect to any of the bonds is not being
made in the Republic of Italy as more fully explained below.


Deutsche Bank, HSBC and JP Morgan are acting as Dealer Managers in this
transaction.


For further details, please contact the Dealer Managers at the details shown
below.

Dealer Managers:


Deutsche Bank AG London            HSBC Bank plc                      J.P. Morgan Securities Ltd.

Sandra Hughes                      Alexi Chan                         John Cavanagh/Paul Hawker

Tel: +44 (0)20 7545 8011           Tel: +44 (0)20 7991 5890           Tel:+44 (0)20 7742 7506

Deutsche Bank Securities Inc       HSBC Securities (USA) Inc.         J.P. Morgan Securities Inc.

Jenny Lie                          Jeff London                        Alykhan Lalani

Tel: +1 866 627 0391 (US Toll      Tel: +1 877 472 2008 (US Toll      Tel: +1 866 834 4666 (US Toll
Free)                              Free)                              Free)

or                                 or                                 or

+1 212 250 7445                    +1212 525 7561                    +1 212 834 4802


This press release does not constitute, or form part of, any solicitation of any
offer or invitation to sell any securities in any jurisdiction nor shall it (or
any part of it), or the fact of its distribution, form the basis of or be relied
on in connection with any contract therefore.  No indications of interest in the
solicitation of offers to sell are sought by this press release.  The
solicitation of offers to sell are not being made to, and offers will not be
accepted from or on behalf of, bondholders or intermediaries in any jurisdiction
in which the making or acceptance thereof would not be in compliance with the
applicable laws, rules and regulations of such jurisdiction.


United States of America

The solicitation of offers to sell with respect to the EUR500 million 5.000%
bonds due 8 July, 2009, GBP250 million 8.500% bonds due 3 July, 2006 and GBP250
million 6.250% bonds due 29 April, 2024 is not being made and will not be made,
directly or indirectly, in or into, or by use of the mail of, or by any means or
instrumentality of interstate or foreign commerce of, or of any facilities of a
national securities exchange of, the United States of America.  This includes
but is not limited to, facsimile transmission, electronic mail, telex, telephone
and the internet.  Accordingly, the solicitation of offers to sell with respect
to such bonds cannot be acted on by any such use, means, instrumentality or
facility from or within the United States of America, and copies of any
documents or materials related to such solicitations of offers to sell are not
being, and must not be, mailed or otherwise transmitted or distributed in or
into the United States of America.  Any purported offer in response to such
solicitations of offers to sell resulting directly or indirectly from a
violation of these restrictions will be invalid, and offers to sell made by a
resident of the United States of America or any agent, fiduciary or other
intermediary acting on a non-discretionary basis for a principal giving
instructions from within the United States of America will not be accepted.


Republic of Italy

With respect to all of the bonds, the solicitations of offers to sell are not
being made in the Republic of Italy and the solicitation memoranda in relation
to the bonds have not been submitted to the clearance procedure of Commissione
Nazionale Per Le Societa E La Borsa (CONSOB) pursuant to Italian laws and
regulations and may not be used in the Republic of Italy in connection with the
solicitations of offers to sell.  Accordingly, noteholders are hereby notified
that, to the extent such noteholders are Italian residents, the solicitations of
offers tosell are not available to them and, as such, any offers to sell
received from such persons shall be void and neither the solicitation memoranda
nor any other material relating to the solicitations of offers to sell may be
distributed or made available in the Republic of Italy.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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