Orica to Raise $400-$500 Million Through an Issue of Orica Step-Up Preference Securities ("Orica SPS")

7 February, 2006

Orica Limited today announced that it has lodged a prospectus to issue four million Orica Step-Up Preference Securities  (“Orica SPS”) (“the Offer”) at an issue price of $100 per Orica SPS, to raise $400 million, with the ability to accept oversubscriptions of up to a further $100 million.

Use of proceeds

The proceeds of the Offer will be used to partially fund Orica’s US$685 million (A$902 million) acquisition of the European, Middle Eastern, African, Asian and Latin American businesses of Dyno Nobel. The acquisition was announced on 19 September 2005 and has already been partially funded through the successful completion of a rights issue in December 2005, with the balance of the funding to be raised through this issue of Orica SPS and drawdown of existing debt facilities.

In the event that more than $400 million is raised via this Offer, Orica will use the additional proceeds to support other future growth opportunities.

The Orica SPS provide some equity support for Orica’s balance sheet and credit rating but are not earnings per share dilutive.

Standard & Poor’s Equity Credit Assignment

Standard & Poor’s has assigned an “intermediate equity” content to the Orica SPS meaning that it will consider the hybrid as part of its assessment of Orica by treating it alternatively as equity and as debt. Standard & Poor's will balance its analysis between these two sets of figures by considering both the qualitative features and the equity content of the instrument.

Terms of SPS and Timetable

A summary of the terms of the SPS and a timetable are attached.

Joint Lead Managers

Citigroup Global Markets Australia Pty Limited and Macquarie Equity Capital Markets Limited have been appointed as Joint Lead Managers to the Offer.

Contact:

Frank Micallef, General Manager Treasury and Investor Relations: (03) 9665 7479 / 0409 961 569

John Fetter: Group Manager, Corporate Affairs: (03) 9665 7870 / 0412 311 371

Shareholders and others interested in investing in Orica SPS:

Orica SPS Information Line 1300 733 154

Web site: www.orica.com

ATTACHMENT

Summary Terms of Orica SPS

The summary terms of the Orica SPS offer are as follows:

• “Stapled securities” comprising a fully paid SPS Preference Share and a fully paid unsecured note;
• Face value of $100;
• Discretionary, unfranked, semi-annual, floating rate, non-cumulative distributions;
• Distribution rate equal to the 180 day Bank Bill Swap Rate plus a margin to be determined by bookbuild;
• No fixed repayment date, but Orica has the right from November 2011 to: 1) remarket the Orica SPS to establish a new margin and adjust certain other terms of the Orica SPS, which will then apply until the next Remarketing Date; 2) repurchase the Orica SPS for cash; or 3) convert the Orica SPS into a variable number of ordinary shares in Orica;
• Following the First Remarketing Date (30 November 2011), if Orica has not reset the margin through a successful remarketing process, repurchased or converted the Orica SPS, Orica will increase the margin by 2.25%;
• Ranks ahead of Orica ordinary shareholders, but behind the existing Orica preference shares currently on issue and all Orica’s creditors, for the payment of distributions and for payments in a winding up of Orica; and
• Investment grade credit rating of BBB- from Standard & Poor’s (“S&P”).

Timetable

These dates are indicative only and are subject to change.