South E.p.5.50% Regulatory News (52AF)

UK Power Networks Holdings Limited Announces Tender Offer for the

£300,000,000 5.375 per cent. Senior Unsecured Fixed Rate Notes due November 2016

£250,000,000 5.125 per cent. Notes due 2023

£200,000,000 8.5 per cent. Notes due 2025

and £300,000,000 5.50 per cent. Notes due 2026

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA OR IN ANY OTHER JURISDICTION IN WHICH IT IS UNLAWFUL TO DISTRIBUTE THIS DOCUMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW)

8 September 2014. UK Power Networks Holdings Limited (the Company) announced today its separate invitations to holders of the outstanding £300,000,000 5.375 per cent. Senior Unsecured Fixed Rate Notes due November 2016 of London Power Networks plc (the 2016 Notes), £250,000,000 5.125 per cent. Notes due 2023 of London Power Networks plc (the 2023 Notes), £200,000,000 8.5 per cent. Notes due 2025 of Eastern Power Networks plc (the 2025 Notes) and £300,000,000 5.50 per cent. Notes due 2026 of South Eastern Power Networks plc (the 2026 Notes and, together with the 2016 Notes, the 2023 Notes and the 2025 Notes, the Notes) to tender their Notes for purchase by the Company for cash (each such invitation an Offer and together the Offers). Each Offer is being made on the terms and subject to the conditions contained in the tender offer memorandum dated 8 September 2014 (the Tender Offer Memorandum) prepared by the Company, and is subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.

Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Tender Agent as set out below. Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.

Rationale for the Offers

The rationale of the Offers for the Company is to reduce excess cash. Any Notes purchased by the Company pursuant to each of the Offers will be cancelled by the relevant Issuer and will not be reissued or resold.

Details of the Offers

In respect of each series of the Notes (each a Series), the Company will pay for Notes of such Series accepted by it for purchase pursuant to the relevant Offer a price (each a Purchase Price) to be determined at or around 2.00 p.m. (London time) (the Pricing Time) on 17 September 2014 (the Pricing Date) in the manner described in the Tender Offer Memorandum by reference to:

(a) in the case of the 2016 Notes, the annualised sum (such sum, the 2016 Notes Purchase Yield) of a purchase spread (the 2016 Notes Purchase Spread) and the 2016 Benchmark Security Rate;

(b) in the case of the 2023 Notes, the annualised sum (such sum, the 2023 Notes Purchase Yield) of a purchase spread (the 2023 Notes Purchase Spread) and the 2023 Benchmark Security Rate;

(c) in the case of the 2025 Notes, the annualised sum (such sum, the 2025 Notes Purchase Yield) of a purchase spread (the 2025 Notes Purchase Spread) and the 2025 Benchmark Security Rate; and

(c) in the case of the 2026 Notes, the annualised sum (such sum, the 2026 Notes Purchase Yield) of a purchase spread (the 2026 Notes Purchase Spread) and the 2026 Benchmark Security Rate,

in each case, rounded to the nearest 0.000001 per cent. (with 0.0000005 rounded upwards).

Each Purchase Price (expressed as a percentage and rounded to the nearest 0.001 per cent. (with 0.0005 per cent. being rounded upwards)) will be determined in accordance with market convention, and is intended to reflect a yield to maturity of the Notes of the relevant Series on the Settlement Date based on the relevant Purchase Yield.

Each Purchase Spread will be determined pursuant to a Modified Dutch Auction Procedure, as described in the Tender Offer Memorandum.

Under the Modified Dutch Auction Procedure, the Company will determine, in respect of each Series and in its sole discretion, following expiration of the relevant Offer, (i) the aggregate nominal amount of Notes of the relevant Series (if any) it will accept for purchase pursuant to the relevant Offer (each such amount, a Series Acceptance Amount) and (ii) a single Purchase Spread (expressed as a percentage) that it will use in the calculation of the Purchase Price for the Notes of such Series, taking into account the aggregate nominal amount of Notes of such Series tendered in the relevant Offer and the purchase spreads specified (or deemed to be specified) by tendering Holders.

The Purchase Spread applicable to a Series will be not more than the Maximum Purchase Spread for such Series set out in the table below, and will otherwise be the highest spread that will enable the Company to purchase the Series Acceptance Amount for such Series pursuant to the relevant Offer.

If the Company decides to accept any Notes for purchase, it is the current intention of the Company to set the Final Acceptance Amount (as defined below) such that the total cash amount payable by the Company for Notes validly tendered and accepted for purchase pursuant to the Offers (excluding all Accrued Interest Payments payable in respect of such Notes) (such total cash amount, the Total Cash Spend Amount) is no greater than £185,000,000, although the Company reserves the right, in its sole discretion, to set the Total Cash Spend Amount at an amount greater or less than £185,000,000. The Company may, in its sole discretion, amend the Total Cash Spend Amount at any time prior to its announcement of the results of the Offers.

The aggregate nominal amount of the Notes the Company will accept for purchase pursuant to the Offers (the Final Acceptance Amount) will be determined by the Company in its sole discretion at or around the Pricing Time on the Pricing Date by reference to the Total Cash Spend Amount, the aggregate nominal amount of the Notes tendered pursuant to the Offers and the purchase spreads specified (or deemed to be specified) by tendering Holders, and will be announced by the Company as soon as reasonably practicable after the Pricing Time on the Pricing Date. The Company will determine the allocation of the Final Acceptance Amount between each Series in its sole discretion, and reserves the right to accept significantly more or less (or none) of the Notes of a Series as compared to the other Series. However, the Company currently intends that the Series Acceptance Amount for the 2026 Notes will be no greater than £30,000,000.

If the aggregate nominal amount of Notes of a Series tendered for purchase pursuant to the relevant Offer is greater than the Series Acceptance Amount for that Series, Notes of such Series may be accepted for purchase pursuant to the relevant Offer on a pro rata basis, as fully described in the Tender Offer Memorandum.

The Company will also pay an Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offers.

A summary of certain of the terms of the Offers appears below:

Tender Instructions

In order to participate in, and be eligible to receive the relevant Purchase Price and Accrued Interest Payment pursuant to, the relevant Offer, Holders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 4.00 p.m. (London time) on 16 September 2014. Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

Tender Instructions must be submitted in respect of a minimum nominal amount of Notes of the relevant Series of no less than the minimum denomination of such Series (being £50,000 in the case of the 2016 Notes, £100,000 in the case of the 2023 Notes, and £1,000 in the case of the 2025 Notes and the 2026 Notes), and may be submitted in integral multiples of £1,000 thereafter. Tender Instructions may be submitted on a competitive basis or a non-competitive basis, as further described in the Tender Offer Memorandum. A separate Tender Instruction must be completed on behalf of each beneficial owner and in respect of each Series.

Indicative Timetable for the Offers

The Company may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate any Offer at any time (subject to applicable law and as provided in the Tender Offer Memorandum) and the above times and dates are subject to the right of the Company to so extend, re-open, amend and/or terminate the Offers.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Holder in order for that Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offers by the deadlines set out above. The deadlines set by any such intermediary and each Clearing System for the submission and withdrawal of Tender Instructions will be earlier than the relevant deadlines set out above and in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Offers will be made (i) by publication through RNS and (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants. Such announcements may also be found on the relevant Reuters Insider Screen and be made by the issue of a press release to a Notifying News Service. Copies of all such announcements, press releases and notices can also be obtained upon request from the Tender Agent, the contact details for which are below. Significant delays may be experienced where notices are delivered to the Clearing Systems and Holders are urged to contact the Tender Agent for the relevant announcements during the course of the Offers. In addition, Holders may contact the Dealer Managers for information using the contact details below.

Holders are advised to read carefully the Tender Offer Memorandum for full details of and information on the procedures for participating in the Offers.

HSBC Bank plc and RBC Europe Limited are acting as Dealer Managers for the Offers and Lucid Issuer Services Limited is acting as Tender Agent.

Questions and requests for assistance in connection with the Offers may be directed to the Dealer Managers.

Questions and requests for assistance in connection with the delivery of Tender Instructions may be directed to the Tender Agent.

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offers. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its securities broker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the relevant Offer(s). None of the Company, the Dealer Managers or the Tender Agent makes any recommendation whether Holders should tender Notes pursuant to the Offers.

OFFER AND DISTRIBUTION RESTRICTIONS

The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Company, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions. Neither this announcement nor the Tender Offer Memorandum constitutes an offer to buy or a solicitation of an offer to sell the Notes (and tenders of Notes in an Offer will not be accepted from Holders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require an Offer to be made by a licensed broker or dealer and any of the Dealer Managers or any of the Dealer Managers' respective affiliates is such a licensed broker or dealer in any such jurisdiction, such Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Company in such jurisdictions.

United States. The Offers are not being made, and will not be made, directly or indirectly, in or into, or by use of the mails 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. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offers by any such use, means, instrumentality or facility from or within the United States. Accordingly, copies of the this announcement and the Tender Offer Memorandum and any other documents or materials relating to the Offers are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States. Any purported tender of Notes in an Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted. Each holder of Notes participating in an Offer will represent that it is not participating in such Offer from the United States or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Offer from the United States. For the purposes of this paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Italy. None of the Offers, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offers have been submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offers are being carried out in Italy as exempted offers pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Accordingly, Holders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase pursuant to the Offers through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

United Kingdom. The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)) or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

France. The Offers are not being made, directly or indirectly, to the public in the Republic of France (France). None of this announcement, the Tender Offer Memorandum or any other document or material relating to the Offers have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire et financier, are eligible to participate in the Offers. Neither this announcement nor the Tender Offer Memorandum have been or will be submitted for clearance to or approved by the Autorité des Marchés Financiers.

Belgium. None of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offers have been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (Autoriteit voor Financiële Diensten en Markten / Financial Services and Markets Authority) and, accordingly, neither Offer may be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids as amended or replaced from time to time. Accordingly, neither Offer may be advertised and neither Offer will be extended, and none of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (as amended from time to time), acting on their own account. Insofar as Belgium is concerned, this announcement and the Tender Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained in this announcement and the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.