[14 November, 2004 - Hong Kong] Cheung Kong Infrastructure Holdings Limited ("CKI" or the "Group") announced today the sale of 9.9% of the issued share capital of the North of England Gas Distribution Network business ("NEG"). 5.8% of NEG's issued share capital was sold to Challenger Life No. 2 Limited ("Challenger") and the other 4.1% to SAS Trustee Corporation ("STC"). After completion, CKI's shareholding interest in NEG will be reduced to 59.9%. In the event that the previously announced sale to Hongkong Electric Holdings Limited is also completed, CKI's stake will then be reduced to 40%.

The consideration for the sale is £4.59 million. Challenger and STC will further assume between them 9.9% of the equity contribution obligations to NEG and the transaction costs, amounting to approximately £53.1 million.

NEG was acquired by a consortium led by CKI on 31 August, 2004. Its gas distribution business services the region south of the Scottish border to South Yorkshire, including a mixture of large cities (Newcastle, Middlesborough, Leeds and Bradford) and a significant rural area including North Yorkshire and Cumbria, with a total population of approximately 6.7 million. The regulated assets value of NEG as at 31 March, 2004 was GBP1,207,000,000.

Commenting on the sale, Mr H L Kam, Group Managing Director of CKI, said: "We are pleased to welcome our new strategic partners to the investment in NEG. Since our acquisition, the NEG business has proved attractive to Challenger, STC and Hongkong Electric Holdings Limited, reflecting the keen market interest in NEG. This has validated our investment in NEG as a high quality asset."

"Looking forward, we will continue to ride on our momentum of expansion and diversification in the United Kingdom's infrastructure sector, and solicit new opportunities to enrich our global infrastructure portfolio with premium investments," Mr Kam stated.

Challenger Financial Services Group is comprised of three core businesses - Challenger Life, Challenger Wholesale Finance and Challenger Wealth Management. Challenger is listed on the Australia Stock Exchange and as at 30 September, its assets under management and administration totaled A$26.72 billion.

STC is a pension fund for many of the government employees from the state of New South Wales in Australia. As at 30 June 2003, STC had net assets of A$22.3 billion.