Acquisition of Terna Participações SA and contribution of investments

On 13 March 2006, the parent Terna SpA acquired 100% of the Brazil-based Donnery Holdings SA (worth real 100) for roughly real 25 thousand (approximately euros 10 thousand).
During the annual meeting, the new shareholders resolved to change the company’s name to Terna Participações SA.
On 27 April 2006, the Board of Directors of Terna SpA resolved to reorganize the group’s Brazilian businesses, also in view of floating the company on the Brazilian stock exchange.

As part of the reorganization process, on 6 June 2006, Terna SpA contributed the investments held by Transmissora Sudeste-Nordeste SA (“TSN”) and Novatrans Energia SA (“Novatrans”) to Terna Participações SA, after it had received authorization from the local regulatory authority ANEEL (Agência Nacional de Energia Elétrica) and TSN’s and Novatrans’ lending banks.

Stock market listing of Terna Participações SA

On 27 October 2006, the placement of the subsidiary Terna Participações SA on the Nivel 2 segment of Brazil’s San Paolo stock market (Bolsa de Valores de São Paulo - BOVESPA) was successfully concluded.
It entailed an IPO in Brazil and an institutional offer in Brazil and abroad, consisting of a secondary offer (sale of shares held by Terna SpA) and a primary offer (Terna Participações share capital increase subscribed by third parties), accounting for 40.7% and 59.3% of the overall offer, respectively.
The main conditions of the offer were as follows:

• Seller - Terna - Rete Elettrica Nazionale Società per Azioni;
• Issuer - Terna Participações SA;
• Market - Nivel 2 segment - Bolsa de Valores de São Paulo (BOVESPA);
• Underlying securities - Certificados de deposito de ações, representing one ordinary and two preference
  shares each (the “Certificates”);
• Price - real 21 per certificate;
• Structure - IPO in Brazil and offer to institutional investors in Brazil and abroad for 29,841,453 certificates,
  equal to 34.0% of total Terna Participações share capital, broken down as follows:
  
• Global offer of 22,104,780 certificates, equal to 26.1% of total Terna Participações share capital;
• Hot issue of 20% of global offer, i.e., 4,420,956 certificates, equal to 4.2% of total Terna Participações share capital;
• Greenshoe option for up to 15% of the global offer, i.e., 3,315,717 certificates, equal to 3.7% of total Terna
  Participações share capital.
  
• Lock-up agreements - For 100% of the certificates underlying the offer for the first 180 days and for 40% for the subsequent 180 days;
• Global coordinators - Banco UBS SA and Banco Itaú BBA SA;
• Financial advisor - Goldman Sachs & Co;
• Co-managers - Banco ABN AMRO Real SA and Banco Santander Brasil SA.

The success of the offer generated gross receipts of approximately real 255 million (approximately euros 94 million) on the secondary offer for Terna SpA and approximately real 372 million (approximately euros 137 million) on the primary offer for Terna Participações, which it will use to finance the company’s growth in Brazil and Latin America.
Following the offer, Terna SpA holds 66% of the share capital of Terna Participações and 85.3% of ordinary shares.