Aquila Announces Offering Price for Common Stock and Convertible Senior Notes

Business Wire, August 19, 2004

KANSAS CITY, Mo. -- Aquila, Inc. (NYSE:ILA) announced today that it has priced its offerings of 40 million shares of common stock and 12 million premium income equity securities (PIES). The public offering price of the common stock is $2.55 a share for a total of $102 million. The PIES carry a coupon of 6.75 percent, and represent $300 million aggregate principal amount of mandatorily convertible senior notes, which will convert into common stock no later than September 15, 2007. Total value of the offerings is $402 million.

Net proceeds from these offerings will be used to retire long-term debt and other liabilities, and to strengthen the company's balance sheet. Lehman Brothers, Inc. is the sole book running manager for both offerings. Credit Suisse First Boston, LLC is a joint-lead manager for both offerings. Citigroup Global Markets, Inc. and Merrill Lynch, Pierce, Fenner & Smith, Inc. are co-managers for the common stock offering.

The company has granted the underwriters an option to purchase up to an additional 15 percent of the common stock and of the PIES to cover over-allotments, if any. The common stock and the PIES are expected to be issued on Tuesday, August 24, 2004, subject to customary closing conditions.

The offerings will be made under the company's existing shelf registration statement that has been declared effective by the Securities and Exchange Commission. A copy of the prospectus supplements and related base prospectus concerning the offering may be obtained from Lehman Brothers, Inc., c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, N.Y. 11717, Phone: 631-254-7106.

Based in Kansas City, Mo., Aquila operates electricity and natural gas distribution utilities serving customers in Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri and Nebraska. The company also owns and operates power generation assets. More information is available at www.aquila.com.