Avista solicits consents from holders of 9¾% senior notes

By Laura Lutz

Des Moines, July 10 - Avista Corp. announced a consent solicitation from holders of its 9¾% senior notes due June 1, 2008.

The company is seeking consent to pay as a dividend to its shareholders all the stock of Avista Capital, Inc., the holding company of Avista Corp.'s non-utility businesses. Avista Corp. needs a one-time waiver of compliance with some provisions of the notes.

The waiver will become effective if holders of a majority of the notes consent.

The dividend is planned as part of the formal separation of Avista Corp.'s non-utility businesses from its regulated utility business.

Avista Corp. intends to form a holding company and will then distribute all the stock of Avista Capital to its new corporate parent and sole shareholder. Holders of Avista's common stock and the Federal Energy Regulatory Comission have already approved the plan, but not all of the relevant state utility commissions.

If the waiver becomes effective, Avista Corp. will pay a $1.25 consent fee per $1,000 principal amount of notes.

The solicitation will expire 5 p.m. EDT on July 20.

Goldman, Sachs & Co. (800 828-3182 or 212 357-7867) is the solicitation agent and the information agent is Georgeson Shareholder Communications, Inc. (800 509-1303 or 212 440-9800).

Avista Corp. is a Spokane, Washington-based energy company.

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