Share Placing to Raise £580,000

Tandem Group PLC 20 January 2000 Placing to raise £580,000 Tandem Group PLC ('Tandem' or 'Company') has today conditionally raised £550,000 (net of expenses) by the placing of 8,055,555 new ordinary shares (8.6 per cent. of the current issued share capital) at a price of 7.2p per share, a 10 per cent discount to the middle market price at the time that the placing was arranged.. The new ordinary shares have been conditionally placed with three institutional investors by Peel, Hunt & Company Limited ('Peel Hunt'). As this placing does not fall within the existing authorities of the board of Tandem, a circular is being posted to shareholders to seek approval for an increase in share capital and a waiver of pre-emption rights in respect of the Placing Shares. In its Interim Statement for the 26 weeks to 1 August 1999 dated 2 September 1999, Tandem reported that borrowings had significantly reduced but still remained high and that in addition to the interest charge, the overdraft level incurred an overhead cost which was disproportionate to the size of the Group's business. Tandem's Board continues to consider possible opportunities to address these issues and restore shareholder value. Bank facilities have just been renewed for a period up to 31 July 2000. As part of the terms of the renewal, two members of the banking consortium have agreed to write off in aggregate £839,039 of principal owed to them in consideration for the early repayment of £548,260. Tandem considered other methods of raising the necessary funds, including the offer of new ordinary shares by way of open offer or rights issue but considered that in the circumstances taking account of time constraints and transaction costs the proposed placing is considered the most appropriate method. An EGM to approve the placing has been convened for 10.00 am on Monday 21 February 2000 at 1 Royal Place, Nottingham NG1 6FZ. Application will be made for the new ordinary shares to be admitted to the Official List, with dealings expected to commence on 22 February 2000. The Placing Shares will, when allotted, rank pari passu in all respects with the existing issued Ordinary Shares of Tandem. The placing is conditional, inter alia, on admission of the new ordinary shares to the Official List by 9.00 am on 22 February 2000 (or such later date agreed by Peel Hunt and the Company). For further information contact: Mervyn Keene (Finance Director, Tandem Group plc) 01733 211399 Adam Hart (Peel, Hunt & Company Limited) 0171 418 8900