ASX Announcement - 1 for 10 Rights Issue

5 May 2000

Utility Services Corporation Limited today announced a 1-for-10 rights issue at $0.80 with one bonus share attached to each rights issue share. The issue will raise over $6.7million and is fully underwritten by the Directors at no fee reflecting their commitment and confidence in the company.

The rights issue follows yesterday's announcement that USC's associate, the ILID partnership, has reached an agreement with K-Mart to proceed with the second stage of introducing ILID price display technology in five more stores over the next 18 months. This move follows a successful six-month trial at K-Mart Chadstone. Stage 2 will begin immediately with an order to install the system in another of K-Mart's Melbourne stores, with decisions on subsequent stores to follow in the next financial year.

The company initially intended to raise these funds through a convertible note issue, which was approved by shareholders at an EGM held on 4 May 2000. The Directors have deferred the note issue as it was considered that a rights issue was preferable for shareholders considering recent interest rate movements and the perceived positive impact following the announcement of the K-Mart agreement.

Shareholders will be sent a prospectus for the rights issue along with details of their entitlement within the next three weeks.