Capital Reorganisation

Caledonia Investments PLC
07 March 2003

                           CALEDONIA INVESTMENTS PLC



          Conversion to Investment Trust Status: Reduction of Capital





In connection with the proposed conversion of Caledonia Investments plc ('
Caledonia') to investment trust status for UK tax purposes (the 'Proposals'),
details of which were set out in its circular to shareholders dated 16 January
2003, Caledonia is pleased to announce that the High Court of Justice (the '
Court') has confirmed the reduction of capital of Caledonia by the cancellation
and extinction of all of the new class of deferred ordinary shares issued on 21
February 2003.  The Order of the Court was registered by the Registrar of
Companies yesterday at which time the reduction of capital became effective.



Caledonia intends to convert to investment trust status with effect from 1 April
2003, being the start of its next financial year.







                                                                    7 March 2003



ENQUIRIES:


Caledonia Investments plc                       Tel: [phone]

Tim Ingram

Chief Executive


College Hill                                    Tel: [phone]

Alex Sandberg

Tony Friend




Notes to editors



Caledonia is a long established investment company with international scope
listed on the London Stock Exchange.  Caledonia's strategy has delivered
outperformance against its benchmark FTSE All-Share Total Return index of 26%
over the five year period to 31 December 2002 and 37% over the ten year period
to 31 December 2002.  Caledonia has a policy of delivering a progressive annual
dividend growth with a 35-year record of unbroken annual dividend increases.
Through holding a diversified portfolio, Caledonia aims to maintain a medium
overall risk position.



At 31 December 2002, Caledonia had a Net Asset Value of 939 pence per ordinary
share (after deducting £20 million for contingent tax and other costs associated
with conversion to investment trust status, being the amount which such costs
are not expected to exceed). Based on a share price as at 31 December 2002 the
discount to its Net Asset Value per share (after deducting costs associated with
conversion referred to above) was 30.1 per cent.



Following Tim Ingram's appointment as chief executive in June 2002, a strategy
review was undertaken.  The results of the strategy review were announced on 21
November 2002 together with the interim report for the half year to 30 September
2002.



Caledonia plans to focus on a portfolio of around 30 to 40 principal
investments, with a policy that at least 50% of the total portfolio should be in
quoted securities or other liquid assets.  New investments will typically be in
the range £10 million to £25 million. Careful control is exercised over costs,
notwithstanding Caledonia's active and participative management style. The Board
believes that Caledonia has a long established and valuable reputation for being
a supportive long term investor, which brings a strong deal flow of
opportunities not always available to others.



Caledonia's investments are focused on a selected range of sectors where it has
good in-house knowledge that can add value to management of investee companies.
Where particular expertise is not held in-house, investments may be made through
third party managed funds where Caledonia will often seek a significant stake in
the management company.



Caledonia's selected sectors are: Financial comprising 33% of the portfolio,
including holdings in Close Brothers Group plc, ICAP plc and Rathbone Brothers
Plc; Leisure and Media comprising 17% of the portfolio, including holdings in
Kerzner International Ltd and The Sloane Club Group Ltd; Property and General
comprising 17% of the portfolio, including holdings in Quintain Estates and
Development PLC; Industrial and Services comprising 15% of the portfolio,
including investments in Offshore Logistics Inc. and Amber Industrial Holdings
PLC. Investment Funds comprising 15% of the portfolio includes holdings in
British Empire Securities and General Trust plc and funds managed by Aberforth
Partners.  Technology comprises 3% of the portfolio. The percentages of the
portfolio quoted are as at 31 December 2002.



Conversion to investment trust status will eliminate Caledonia's future
liability for corporation tax on chargeable gains.  As a result, Caledonia
believes it will be able to build greater value for shareholders and be more
appealing to retail shareholders which ultimately should contribute towards a
lower discount of Caledonia's share price to Net Asset Value per share.  As an
investment trust, Caledonia expects to be included in the AITC Global Growth
sector where its investment performance would have put it in the top quartile by
reference to both five and ten year total shareholder returns for the period to
31 December 2002.



The Cayzer Trust Company Limited and other Cayzer family interests together
control some 49.9% of Caledonia.




                      This information is provided by RNS
            The company news service from the London Stock Exchange