Terra Firma

Kellen Ventures, a new company owned ultimately by East Surrey Holdings plc (25%) and Terra Firma, the European private equity group (75%), announces that it has agreed to acquire Centrica plc’s gas transportation for £90 million.

The business consists of around 139,000 existing connections in the UK and has an order book for a further 35,000 connections.

Notes to Editors

1. East Surrey Holdings is a regulated multi-utility infrastructure business in the UK which comprises: Sutton and East Surrey Water plc (which supplies water to a number of southern London boroughs, East Surrey and parts of Kent and Sussex); Phoenix Natural Gas Limited (which distributes and supplies gas in the Greater Belfast area); and E.S. Pipelines Limited (which is an independent gas transportation business in the UK).

2. Terra Firma pursues a contrarian investment strategy, primarily targeting large, out-of-favour and asset-intensive companies with strong and reliable cashflows operating in basic service industries. The firm has a hands-on management style, working directly with its portfolio businesses to overhaul operations and transform strategy. Terra Firma is the successor to Nomura's Principal Finance Group established in 1994.

3. On 8 April 2005, Terra Firma announced a recommended offer for all of the issued share capital of East Surrey Holdings, which is expected to close at the end of June.