Leighton Contractors Acquires Nextgen Networks Pty Limited

Issue Date:  24 December 2003
Issued By:  Leighton Holdings Limited

Company Announcements Office
The Australian Stock Exchange Limited
Level 4
20 Bridge Street
Sydney NSW 2000

Re: Leighton Contractors acquires Nextgen Networks Pty Limited

Dear Sir,

Please find attached a copy of a media release to be issued today by Leighton Contractors Pty Limited, a wholly owned subsidiary of Leighton Holdings Limited.

The telecommunications company, Nextgen Networks Pty Limited, and all the assets of its network have been acquired by Leighton Contractors from Nextgen’s receivers and managers, Messrs Jack Crumlin and Martin Madden.

 Leighton Contractors has successfully formed strategic alliances with various customers such as AARNet (the Australian Academic and Research Network) which will underpin the viability of the business.

Visionstream Pty Limited, a wholly owned subsidiary of Leighton Contractors, will retain the major operations and maintenance contract with Nextgen and undertake additional works worth approximately $100 million over the next 5 years.

Yours sincerely,


A.J. MOIR
Company Secretary

Leighton Contractors Acquires Nextgen Networks Pty Limited

Issue Date: 24 December 2003
Issued by: Leighton Contractors Pty Limited

Leighton Contractors has acquired telecommunications company, Nextgen Networks Pty Limited, from its Receivers and Managers, Jack Crumlin and Martin Madden of Ernst & Young.

Nextgen is Australia’s newest broadband network employing the most sophisticated transmission technology in the country.  It currently provides intercapital data transmission services to a number of significant entities, as well as some smaller ISPs and individual users.

Under the innovative deal, finalised today, Leighton Contractors will purchase Nextgen Networks after forming strategic alliances that underpin the viability of the business.  Although the detailed financial terms of the transaction are confidential, in an alliance with the Nextgen Banking Syndicate, Leighton Contractors will pay an upfront amount and the Banks will then share in network growth over the next ten years.

A long-term alliance formed with the nation’s universities through AARNet (the Australian Academic and Research Network) will deliver unprecedented broadband access for the nation’s research and education networks, particularly in regional Australia.

Existing customers on the Network have expressed interest in converting their current arrangements into longer-term arrangements.

Leighton will acquire all the assets of the network and continue to service Nextgen’s current customers under existing agreement conditions.  It will retain the major operations and maintenance contract with Nextgen held by its Visionstream subsidiary.

Managing Director, Bob Merkenhof said: “The acquisition of Nextgen Networks and the formation of these alliances reflects the flexibility and imagination that Leighton Contractors can bring to business development and finding solutions.”

Mr Merkenhof stated that the addition of Nextgen’s business is in line with Leighton Contractors’ strategic aims and will see the continued growth in its service-related businesses across the telecommunications, commercial and industrial property, transportation infrastructure and mining sectors.

“This is a strategic, long-term investment in an industry in which we have been involved for over a decade and that we have identified as being significant to our future success,” he said.

“Our participation in this area began through our Strategic Supplier Partnership with Optus in the early 1990’s and was extended with the purchase of Visionstream from Telstra in 1996.”

Executive General Manager of Leighton Contractors, Mr Phil Cooper, says that Leighton is best placed to realise the value of the network, having constructed it and held the operations and maintenance contract since the commencement of operations in 2002.

“The Nextgen Network can provide a level of service to the Australian community which is second to none.  It has major service centres in each mainland capital from Perth to Brisbane.  Under the alliance arrangements this will extend, over time, to regional and rural communities,” said Phil Cooper today.

“We are very pleased with the reaction from customers to the prospect of this network being owned and managed by Leighton.  As part of the acquisition of Nextgen we have been able create a significant alliance with AARNet.”

“The agreement with AARnet to provide infrastructure for the provision of services to the higher education community is particularly important.  The collaboration with AARNet will provide benefits for all telecommunications users, especially the education sector and regional communities.”

“Leighton is pleased to maintain its partnership with the banks with whom it has been involved since the inception of the network.  The structure we have developed with the Receivers & Managers provides the banks with a significant opportunity to realise further value as a result of the application of Leighton’s business management know-how and project expertise,” said Mr Cooper.

Mary Fleming, AARNet’s Director of Business Development said,  “AARNet sees this as a unique opportunity to partner with an organization whose skill sets are complementary to ours.   Leighton Contractors brings its expertise in building and operating infrastructure to the partnership, while AARNet enjoys a long history of developing and operating research and educational networks in this country.”

“Nextgen represents an opportunity for significant bandwidth to service more than 800,000 staff and students of universities and research organisations where the AARNet network plays an integral role enabling them to collaborate both nationally and internationally,” she said.

Jack Crumlin of Ernst & Young, Joint Receiver and Manager of Nextgen said, “We are pleased we have been able to enter into this transaction with Leighton Contractors which not only secures the future of this important telecommunications asset, but also enables the secured creditors to participate in that future.”

Leighton Contractors’ subsidiary, Visionstream, currently operates and maintains the Nextgen network. This arrangement will continue under the sale.

Visionstream has significant experience in the area of telecommunications networks, having designed and constructed both the Nextgen and Reef Networks.  In addition, Visionstream now operates and maintains the Reef Network in Queensland.

The Nextgen network consists of fibre optic assets and capacity installed from Brisbane to Perth.  The network is a geographically protected national network, with the Brisbane to Melbourne link utilising self-healing SDH two-fibre ring architecture.

The network covers approximately 8,400 kilometres and can provide connectivity to approximately 70 major and regional population centres, equivalent to approximately 90% of Australia's population.  It is equipped with Lucent Technology not previously utilised in the Australian market but has been installed extensively across the USA and Europe by a large number of significant carriers.

For more information contact:
Leighton Contractors
Simone Holzapfel
02 9925 6675 or 0423 027 576

AARNet
Mary Fleming
02 9449 9146 or 0421 618 110

Ernst & Young
Kate Davies
02 9248 5428 or 0421 615 202