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14 June 2013

ASX ANNOUNCEMENT

TRANSFORMATION OF SOLAR BUSINESS CONTINUES


Key points: Acquisitions undertaken to establish national solar leasing products Restructuring of operations completed to support new strategic direction Cash and current assets preserved throughout H2 Guidance revision on previous turnover forecast from $18M to $10.3M

Solco Ltd (ASX: SOO) has taken the next steps in its transformation into an integrated power company by establishing a national finance business offering leasing products for solar retailers and installers servicing SMEs and residential property owners. Solco announces it has purchased the assets of a start-up solar finance company, ZincFinance, from Australian Finance Group (AFG), and in a separate acquisition, the solar lease assets of Bright Generation Holdings (BGH). Both businesses have been in product development during the past 12 months and their operations and processes will be integrated into a new entity Solco Finance from July 2013, which will operate under its own Australian credit licence. Solco will use its traditional national wholesale networks to offer the market a range of commercial and residential solar power leasing products, commencing with a pilot program with one of Australias largest solar retailers. To assist with launching Solco Finance, Solco has secured the services of former AFG General Manager of Leasing and Finance, Ken Ferro. Mr Ferro has substantial experience in providing leasing products via retail networks. Solco CEO Anthony Coles said the acquisitions and new expertise demonstrated the company was continuing its transformation from being primarily a solar products provider into a new energy company with Finance, Distribution and Power operations. We are committed to changing the way people buy their power, Mr Coles said. Distributed generation, supported by the new economics of solar power, is now competitive with traditional sources of power in many parts of Australia. By bundling energy and finance services together, we want to be able to bring new products, to new customers, in a post solar-rebate Australian energy market. Solcos new strategic direction is in response to the downturn in wholesale sector during the past two years due to global over-supply.

Solco Ltd ABN 27 084 656 691 www.solco.com.au

During the past year Solco has restructured its operations and exited various low margin activities, preserving cash to help fund future growth. As previously announced, Solco has streamlined its distribution business to focus on higher margin off-grid and pumping markets, supporting a growing portfolio of dealers around Australia that are focussed on servicing the mining, agricultural and irrigation sectors. Solcos Power business continues to expand its system integration and EPC services with larger commercial grid-connected and off-grid projects across Australia. Board and management focus on cash preservation throughout the year means Solco is currently holding approximately $5 million in current assets, (cash, debtors and inventory), and is well positioned to support future growth. As a result of the restructure of its wholesale activities, Solco will achieve a 2012/13 turnover of approximately $10.3 million, compared with previous guidance of $18 million issued in November 2012.

For further information:

Anthony Coles Chief Executive Officer Solco Limited P: +61 401 434 545 Anthony Hasluck Managing Director Clarity Communications P: +61 438 522 194

Solco Ltd ABN 27 084 656 691 www.solco.com.au

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