Placing to raise GBP11m

TEG Group (The) PLC
23 March 2007


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND, THE
REPUBLIC OF SOUTH AFRICA OR JAPAN.

Neither this announcement nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, in or into the United States, Canada,
Australia, the Republic of Ireland, the Republic of South Africa or Japan. Any
failure to comply with this restriction may constitute a violation of United
States, Canadian, Australian, Republic of South Africa, Republic of Ireland or
Japanese securities laws.


23 March 2007


                   The TEG Group plc ('TEG' or the 'Company')


 Placing of 10,000,000 New Ordinary Shares at a Placing Price of £1.10 per New
                                 Ordinary Share


                    Notice of Extraordinary General Meeting



1. Highlights


   • Placing of 10,000,000 New Ordinary Shares at a price of £1.10 each;


   • Price represents a discount to the volume weighted average price since
    29 January 2007, being the date of the GMW PFI Announcement, of 4.4%;


   • Placing over-subscribed with significant institutional demand and
    several new investors participating;


   • TEG is sub-contractor to the Viridor/Laing consortium that has been
    awarded preferred bidder status for the Greater Manchester Waste Disposal
    Authority PFI contract (the 'PFI Contracts');



   • Potential value of contracts to TEG up to £35 million;



   • Proceeds of fundraising to be used for funding of the potential PFI
    Contracts, for future TEG development projects and for expanding the sales
    and project development teams;


   • EGM seeking shareholder approval to be convened on 20 April 2007.


The Company today announces that it is intending to raise up to approximately
£11 million before expenses by way of an institutional placing of 10,000,000 New
Ordinary Shares at a price of £1.10 per New Ordinary Share. The Company will
also convene an EGM at which shareholder approval will be sought for authority
to issue shares in order to enable the Placing to take place.

Contacts:


The TEG Group plc

Mick Fishwick, Chief Executive 01772 314100

Adventis Financial PR 020 7034 4760 / 020 7034 4758
Peter Binns / Tarquin Edwards 07768 392 582 / 07879 458 364

Canaccord Adams Limited

Robert Finlay/Chris Bowman 020 7050 6500


2. Background

TEG was incorporated in 1995 and its ordinary share capital was admitted to
trading on AIM in July 2004. The Company's principal activity is the design and
production of specialised plant and equipment for the composting of organic
wastes for sale to third party customers and in-house projects. The TEG Silo
Cage composting system is the result of over ten years of design and testing and
TEG has now commissioned four plants in the UK.


Legislation governing the treatment and disposal of organic waste is
increasingly stringent and drives the market for the TEG Silo Cage system and
the services that its process provides. In 2005, new legislation became
effective relating to the disposal of animal by-products and the use of
landfills, increasing the Company's market in the organic waste recycling sector
in the UK.


The Company earns revenues from both (i) gate fees for waste treatment and (ii)
the sale of composting plants.


As announced on 6 March 2007, the Company has reported a significant increase in
its turnover from £555,250 (2005) to £3,559,330 (2006) and has achieved the
following:


(i) the installation of the TEG plant at the Company's facility in Perth,
Scotland has been completed and the transition from the existing technology was
completed in Quarter 4 of 2006;


(ii) the first line at the Company's facility at Sherdley Farm, Preston has been
installed and commissioned and the second line, with an additional capacity of
7,000 tonnes, is expected to be completed by the second quarter of 2007;


(iii) TEG has been named as a principal sub-contractor to the Viridor-Laing
consortium that has been awarded preferred bidder status for the Greater
Manchester Waste PFI contract. Assuming financial close, TEG expects to be the
exclusive supplier of IVC technology to the consortium in the Greater Manchester
region;


(iv) TEG completed the acquisition of the site at Todmorden, Yorkshire in May
2006 and is developing one of the largest composting plants in the UK;


(v) planning consent for the Company's facility in Kildare, Ireland was revised
and re-issued in January 2007 and contract terms have been agreed McCartney
Contracting for waste supply and compost product placement;


(vi) the Company has entered into a research and development project with Shell
UK Limited to investigate opportunities for the composting of oil-based mud
drill cuttings;


(vii) the Company has completed the construction of a TEG Silo Cage plant for
the City and Council of Swansea and handover of the plant took place in February
2007. The final invoiced contract value was £920,000;


(viii) the Company has completed the construction of a TEG Silo Cage plant for
Banham Compost Ltd and handover is expected to take place in March 2007; and


(ix) the Company has been awarded a contract by Lancashire County Council which
has created business for the TEG plant at Sherdley Farm, Preston.


The Directors believe that the recent success of the Company has been driven by
the TEG System offering an attractive, efficient and cost-effective alternative
to landfill. It is also an attractive alternative to other forms of ABP
disposal, namely rendering, incineration and anaerobic digestion.

3. The TEG System


The TEG Silo Cage system is a large-scale continuous-flow thermophilic
composting plant that converts organic wastes into a natural organic fertiliser.
By mixing appropriate waste streams in the correct ratio, conditions are created
for rapid thermophilic composting activity. The design of the Silo-Cage System
provides an environment for vigorous composting. When the mixed waste is
introduced to the Silo Cage, the micro-organisms already present in the mix
quickly multiply, generate high temperatures and rapidly degrade the waste.


The composting process, which is a continuous-flow and essentially dry operation
requiring no mechanical turning, takes 12 to 14 days, during which time the
temperature of the process is continuously monitored by multiple probes. The
insulated walls maintain the temperature within the cages, which each have a
nominal capacity of 600 tonnes per annum.


The TEG Silo Cage consists of a bank of between 8 and 32 steel-framed cages with
insulated walls. Multiple banks of Silo Cages are supplied for large contracts.
Each bank of Silo Cages is suspended in a rigid steel frame and is supplied via
a bio chopper mixer that feeds onto a conveyor loading mechanism, which evenly
supplies the calculated amount of compost mix to each silo on a daily basis.
Composted product is removed from the base of the Silo Cage by an unloading
mechanism.


As announced previously, a full scale waste composting plant has been developed
by the Company at its demonstration plant at Sherdley Farm near Preston which
has been operational since 2000. In November last year, the plant was validated
to process Category III ABP to the highest UK and EU standard. The ABP approval
represents the highest classification possible in the organic waste treatment
market and it allowed the Company to commercialise the Sherdley Farm facility,
install new larger plants and generate revenues, whilst also creating the
opportunity to open up larger markets for the Company.


The Company has a pipeline of possible opportunities, including the sale of
plant, and several BOO projects.


4. Greater Manchester Waste PFI Contract


As announced by the Company on 29 January 2007, TEG is the principal
sub-contractor to the Viridor-Laing consortium that has been awarded preferred
bidder status for the Greater Manchester Waste PFI contract. Costain Limited has
been retained to manage the construction projects on behalf of the consortium
and will be TEG's immediate customer.


Assuming the consortium achieves financial close, TEG will be the exclusive
supplier of IVC technology to the consortium and will receive an order to supply
all the IVC capacity specified by the PFI contract. It is anticipated that
financial close will be completed by 1 June 2007 and that contracts will become
binding at that point.


The Company expects to be awarded contracts to build four plants over the period
from 2007 to 2010. The combined capacity of the plants will be 180,000 tonnes
per annum, producing 125,000 tonnes of compost product per annum. It is
envisaged that the plants will all process green waste and kitchen waste
collected from households in the Greater Manchester region. Depending upon the
final scope of supply, the total value of the construction projects to TEG could
be up to £35 million over the period 2007 to 2010.


The PFI contract is believed to be the largest waste management contract offered
to date in Western Europe. Total capital investment could be in excess of £300
million and the overall contract value is projected to be £3 billion.


5. Todmorden BOO


In May 2006, TEG acquired a freehold site in Todmorden, West Yorkshire for a
cost of £2 million. The Company has since completed the demolition of the
buildings on the site and completed the construction of a new building to house
the TEG plant and equipment. It is expected that the facility will be
operational by April 2007, considerably ahead of schedule. The facility will be
one of the largest composting plants in the UK and the site has been granted
full planning permission for a TEG IVC plant with a capacity of 50,000 tonnes
per annum of waste feed. The Directors understand that this is the only site in
development with such planning permission within its Local Authority area
(Calderdale) and neighbouring Local Authorities (Greater Manchester, Blackburn
and Darwen).


Market demand is extremely encouraging at this stage and to date negotiations
are currently under way with two Local Authorities (including Calderdale
Council) and numerous private sector food waste customers, both directly and
through the Company's WRAP-funded relationship with Urban Mines Limited.


Plant and equipment installation at the plant is underway and two lines are due
to become operational in April 2007 with a capacity of 25,000 tonnes per annum.
The Company intends that a further two lines will become operational later in
2007, bringing the total capacity to 50,000 tonnes per annum.


6. Recent Developments


Perth Plant, Scotland


As reported in 2005, the Company secured an 11 year contract to acquire the
rights to take over and develop a composting operation at a waste management
site in Perthshire, Scotland. Two 32-cage lines have been constructed with a
joint capacity of 38,000 tonnes per annum and both lines are now operational.
The site's principal customers are SITA UK Ltd (Local Authority service with
Perth & Kinross Council), Binns Skips (collections from food manufacturers),
Scot Loo and Grampian Foods.


The Scottish Environment Protection Agency has granted TEG a Pollution
Prevention and Control ('PPC') permit to carry out ABP composting activities at
the Perth plant. Due to the long lead time, the expense associated with PPC
compliance and the requirement under PPC for the operator to use Best Available
Techniques in respect of the technology and its operation, the Directors believe
that the application of the Pollution Prevention and Control (Scotland)
Regulations to the type of activities carried on by the Company may represent a
significant barrier to competitors attempting to enter into markets governed by
the PPC regime.


Sherdley Farm Plant, Preston


Further to receiving validation to process Category III ABP to the highest UK
and EU standard, the Company has upgraded the Sherdley Farm plant and the first
line was commissioned in February 2006 with a commercially available capacity of
approximately 6,000 tonnes per annum. The Company has reserved some of the total
plant capacity for continued R&D activity for prospective customers. The Company
has also completed a new maturation building and upgraded the infrastructure on
the plant.


By securing contracts with Schwan's, H.J. Heinz and Greater Manchester Waste,
the Company has confirmed demand for its waste disposal service and with the
first line effectively full, the Company is now constructing a second line with
a capacity of 7,000 tonnes per annum and anticipates this line being completed
by the second quarter of 2007. Subject to planning consent, it is intended to
upgrade the waste receipt building and install offices for plant and engineering
staff.


As disclosed previously in the Admission Document, the Company has occupied the
land at Sherdley Farm for a number of years without documentation in place. As
at the date of this announcement, the Company awaits formal execution by the
landlord and Lancashire County Council of a deed of release to allow a lease to
be granted. The Directors believe that both the deed of release and the lease
will be executed shortly.

Kildare Plant, Ireland


The planning consent for the Kildare plant was revised and reissued to the
Company in January 2007, dated October 2006 and the Company is planning to
upgrade the plant to ABP standard with a capacity of 15,000 tonnes per annum by
July 2007. The Company will be installing new panels, upgrading material
handling and improving the building to meet the planning conditions for ABP
waste streams at an estimated cost of £550,000.


The Company now awaits the licence agreement from Kildare County Council to
allow the development to proceed.


In addition, the Company has agreed contract terms with McCartney Contracting
for the supply of waste and the placement of compost product. This will ensure
the facility is fully utilised and will ensure a secure outlet for compost
product following approval by the regulator in Ireland, the Department of
Agriculture.


Swansea


As announced by the Company on 6 February 2007, TEG has completed the
construction of the TEG Silo Cage plant for the City and County of Swansea. The
plant has been operating under TEG management since November 2006 and, following
training and mechanical completion, it was handed over to the City and County of
Swansea on 5 February 2007. The final invoiced contract value for TEG was
approximately £920,000.


TEG will continue to work closely with The City and County of Swansea and will
lead the Authority in gaining State Veterinary Service ('SVS') approval for the
plant, a process that is expected to be completed by the second quarter of 2007.
TEG will provide a 12-month warranty period that commences after the SVS
approval is obtained.


Banham


The Company reported in July last year that Banham Compost Limited had placed an
order with TEG for the purchase and installation of two banks of 24 Silo Cages
for approximately £1.7 million. In April 2006, Banham received planning
permission to operate an IVC facility at its Carleton Rode site in Norfolk with
a capacity of 28,000 tonnes per annum. The final contract value was £1.75
million.


The installation of the plant was completed in December 2006 and commissioning
of the first line began in December 2006. The final handover to the customer is
scheduled for March 2007.


Clayland's Corner


The Company reported on 6 April 2006 that it had obtained planning permission
for a composting facility at Clayland's Corner, Somerset. The Company has been
addressing the pre-conditions of the planning permission and believes those will
be satisfied by April 2007. Development of the facility will commence thereafter
and the Directors anticipate the site will be operating by August 2007. The
planning permission is for an 8,100 tonnes per annum facility and the Company
intends to install an 18 Silo Cage plant.


Other Arrangements


(i) Research and Development Project with Shell UK Limited


The Company has entered into a Research and Development Project with Shell UK
Limited to investigate the opportunities for the composting of oil based mud
drill cuttings from North Sea exploration activities using TEG Silo Cage
technology. The contract is initially to trial bioremediation of oil-based mud
cuttings and, if this is successful, the parties will consider further the
commercial potential to develop TEG Silo Cage plants for oil-based mud drill
cutting processing.


The R&D work will focus on bioremediation of oil based mud drill cuttings,
which, if successful would convert a hazardous waste to a less hazardous end
product which can be used as a beneficial product, such as landfill cover.


The project is for Shell to fund research & development work by TEG followed by
full-scale trials at TEG's plant in Perth, Scotland. Macaulay Enterprises
Limited, the commercial arm of the Macaulay Institute and a specialist
environmental consultancy and laboratory services company, will work with the
parties assessing the products and potential end use opportunities.


The laboratory work is complete and the pilot scheme is in progress in purpose
built rigs at the TEG site in Perthshire. The Company expects the results of the
pilot scale work to be available during Quarter 2 of 2007.


(ii) Launch of Natural Organic Fertilizer Company Limited ('NOFCO')


TEG launched a new marketing subsidiary, NOFCO, in January 2007 with the sole
aim of developing new markets for compost products, both for the Company and for
its customers. The beneficial use of compost products is key to all Local
Authority contracts and TEG believes its expertise in this area will benefit its
customers and give the Company a further competitive advantage. The Company
expects to commence commercial scale crop growing trials near Sherdley Farm in
April 2007.


7. The Market


Total waste in the UK is estimated at 360 million tonnes per annum, of which 118
million tonnes is controlled and 42 million tonnes is potentially suitable for
composting. By the year 2020, the UK target is that 25 million tonnes per annum
of waste should have been diverted from landfill. An additional 1.6 million
tonnes of ABP is forecast to be entering the organic treatment market due to
implementation of ABP legislation.


The Waste Resource Action Programme estimates the need for 450 composting plants
by 2020 for Local Authorities, with the increase in ABP providing opportunities
for over 100 plants. The National Audit Office conducted a study in July 2006
into progress with landfill diversion in the UK. The study includes
illustrations of increased composting and recycling requirements from which it
is estimated that a further 1.1 million tonnes per annum of material will
require composting by 2012, the equivalent to approximately 60 TEG plants. In
addition, Defra has recently announced a revision to the PFI process for waste
management contracts and stated it expects increased deals in the sector,
ramping up to a peak in 2010/11.


Parallel to this increase in the requirement for facilities, it is estimated
that the potential market for compost product is nine million tonnes, which the
Directors believe will support the development of up to 640 composting plants.


Furthermore, gate fees are very attractive and the cost of landfill, the
benchmark for waste disposal, is rising sharply. Published prices for ABP
disposal are up to £82 per tonne, up to £55 per tonne for catering waste,
between £21 and £29 per tonne for green waste, and an average of £47 per tonne
for landfill disposal.


8. Legislation


Landfill Directive 1999


The Landfill Directive 1999 (1999/31/EC) was transposed into English law as the
Landfill (England and Wales) Regulations 2002 and became effective on 15 June
2002. The Directive requires significant reductions in the quantity of
biodegradable municipal waste disposed of by landfilling and the prohibition of
the disposal of hazardous and non-hazardous wastes in the same landfill. As part
of the drive to comply with the Landfill Directive, the Government set mandatory
recycling targets for local authorities. Set against a 1995 baseline, the
Landfill Directive requires a reduction of 25 per cent. by 2010, 50 per cent. by
2013 and 65 per cent. by 2020. Failure to meet the Landfill Directive targets
within the next decade will result in the UK facing substantial fines from the
EU. A penalty system was imposed in April 2005 pursuant to which Local
Authorities may be fined £150 for every tonne landfilled beyond the limit set by
the Local Authority's allowance, and the Directors believe that such financial
sanctions will most probably be passed on to Local Authorities and then
collected through Council Tax, and the threat of these sanctions will provide a
further catalyst for change.


Regulation 11 of the Landfill (England and Wales) Regulations 2002 states that a
landfill operator cannot charge a price per tonne of waste to be landfilled
which is equivalent to less than the cost to the operator of operating that
landfill site in respect of each tonne of waste. The result of this is that the
price of using landfill as a method of waste disposal is likely to become more
expensive and the Directors believe that demand for the attractive, efficient
and cost-effective TEG system will increase as a result.


Furthermore, there are now limits on the amounts of biodegradable waste that can
be landfilled. These changes are in addition to the landfill tax, which has
increased at a rate of £3 per tonne per annum since April 2005 and is expected
to rise by £8 per tonne per annum from April 2008, further increasing the
attractiveness of recycling and composting options over landfill.


Waste and Emissions Trading Act 2003


The Landfill Allowance Trading Scheme ('LATS') was implemented in April 2005
under the Waste and Emissions Trading Act 2003. The purpose of LATS is to
encourage recycling by the trading of recycling credits whereby Local
Authorities that fail to achieve recycling and composting targets can buy excess
recycling capacity from those that have exceeded their targets. The price for
recycling credits will be market driven and is expected to fall between the cost
of recycling and composting, and the cost of fines implemented under the
Landfill Directive, thus stimulating investment in additional recycling and
composting facilities.


Animal By-Products Regulations 2003


The EU Regulation concerning ABP became effective from 1 May 2003, and the
regulation came into force in England and Wales on 1 July 2003 introducing
higher standards of treatment and banning the use of certain traditional methods
for disposal. Given the outbreaks of human and animal disease which have focused
attention on the safety of the food chain, the need to protect against
pathogens, such as Salmonella, E Coli. 0157, and the need to protect against
animal diseases, such as Foot and Mouth and Swine Fever, has become imperative
in the Government's policy. It has become clear that traditional methods of
disposal are unsafe and that organic wastes should be treated to a high standard
so that they may safely be recycled to land. The EU Commission was therefore
charged with implementing further measures, including the approval of
alternative disposal methods. The Regulation bans the disposal of animal
by-products including most food wastes to landfill, although temporarily
catering waste continued to be landfilled during a transition period which, with
the exception of a further derogation for some supermarket-type waste, ended in
December 2005.


The Company believes that the development and enforcement of environmental
legislation will continue to strengthen the Company's markets. However, whilst
the Company operates within and aims to comply with the current waste industry
regulatory framework, there can be no assurance that such regulatory framework
will not change to the detriment of the Company.

9. Strategy


The Directors remain committed to developing the business in three main areas:


(i) Build Own and Operate projects


BOOs provide sustainable, long-term revenues, and allow the Company to take
advantage of rising waste disposal prices. Gate fees of just under £40 per tonne
will enable the Company to secure favourable returns with estimated revenues of
at least £1.3 million per annum for a plant with capacity of 35,000 tonnes. The
Company currently has two BOOs in operation and a further three BOOs in
development.


(ii) Plant Sales


The Company sells plant to third parties who prefer to run their own waste
disposal operations. This area of the business provides large revenues to the
Company. A single bank of 28 cages is valued by TEG at over £1 million and the
Company has received interest in increasing the scope of supply to include
buildings and civils infrastructure, raising the overall potential value of a
sale to £5-10 million. The main clients that might purchase a TEG plant are
local authorities, waste management companies, water companies and other
utilities and a variety of private sector businesses, including major food
producers/processors.


(iii) Development of the compost marketing business

This is seen by the Company as a key strategic element and the Company has given
clear focus to its subsidiary, NOFCO, to develop secure markets and to leverage
value by demonstrating the quality of the compost product. The Directors believe
the compost from the TEG system is of a high quality and gives the Company a
competitive advantage.


The Company is committed to continuing its investment in R&D whilst developing
the compost marketing business to support plant sales and BOOs. It also intends
to strengthen its commercial skills in sales, operations and project delivery,
through several key appointments.


10. Future Developments


TEG has a pipeline of numerous actual and potential projects. In addition, the
Company believes there will be considerable further interest in TEG technology
as the market grows and the number of Local Authority tenders and PFI projects
grow. Developments of particular note include:


(i) a number of potential medium scale BOO projects and some in development with
waste management operators. The most advanced BOO opportunity is in Tempsford,
Bedfordshire, where TEG has secured an exclusive option to lease a site. The
Company intends to submit a planning application by the end of March 2007;


(ii) two early stage potential large BOOs;


(iii) ongoing trials with Shell UK Ltd;


(iv) discussions and tenders with Local Authorities and large waste management
companies; and


(v) TEG is developing the NOFCO business and about to commence trials on large
scale crop management and production of industrial crops for potential
industrial and renewable power applications.


11. Use of Proceeds of the Placing


It is intended that the proceeds of the Placing will be used as follows:


(i) funding of bonds and working capital for the Greater Manchester build
projects;


(ii) providing capital for the construction of BOO projects over the period from
2007 to 2009;


(iii) the strengthening of the sales, business development and project
development teams for the UK and European markets as a result of increasing
interest from both the UK and abroad; and


(iv) the development of the NOFCO industrial crop business.


12. Working Capital


The Directors are of the opinion that, taking into account the net proceeds
receivable under the Placing, the working capital available to the Group is
sufficient for its present requirements, that is, for at least the next twelve
months from the date of Admission.


13. Principal Terms of the Placing


Canaccord has agreed to use their reasonable endeavours to procure placees for
10,000,000 New Ordinary Shares at the Placing Price and the New Ordinary Shares,
when issued, will rank pari passu with the Existing Ordinary Shares, including
the right to receive all dividends and other distributions, thereafter declared,
made or paid.


The Placing, which is not underwritten, will be conditional, inter alia, on
Admission taking place.


14. Extraordinary General Meeting


Notice of the Extraordinary General Meeting to be held at The Bridgewater Hall,
Lower Mosley Street, Manchester M2 3WS at 11:50 a.m. on 20 April 2007 will be
sent to Shareholders on Monday 26 March 2007 at which one ordinary resolution
and one special resolution will be proposed as follows:


Ordinary Resolution


1. to grant the Directors a general authority pursuant to section 80 of the Act
to allot relevant securities (within the meaning of section 80(2) of the Act) of
the Company up to an aggregate nominal amount equal to £500,000, representing
26.28 per cent. of the Existing Ordinary Shares as at 22 March 2007 (being the
last practicable date prior to the publication of this announcement) all of
which will be used for the Placing.


Special Resolution


2. to disapply statutory pre-emption rights in relation to shares with a nominal
value of £500,000 representing 26.28 per cent. of the Existing Ordinary Shares
as at 22 March 2007 (being the last practicable date prior to the publication of
this announcement) and representing the allotments contemplated in this letter
pursuant to the Placing.


15. Definitions

'ABP'                                animal by-product;

'Act'                                the Companies Act 1985 (as amended);

'Admission'                          admission of the New Ordinary Shares to
                                     trading on AIM and such admission becoming
                                     effective in accordance with the AIM Rules;

'Admission Document'                 The admission document relating to the
                                     Company dated 6 July 2004;

'AIM'                                the market of that name operated by the
                                     London Stock Exchange;

'AIM Rules'                          the AIM Rules for Companies published by the
                                     London Stock Exchange as in force at the
                                     date of this document or, where the content
                                     requires, as amended or modified after the
                                     date of this document;

'Board' or 'Directors'               the board of directors of the Company;

'BOO'                                build, own and operate;

'Canaccord'                          Canaccord Adams Limited, the Company's
                                     nominated adviser and broker;

'Circular'                           the circular to be sent to Shareholders on
                                     26 March 2007;

'Company' or 'TEG'                   The TEG Group plc;

'CREST'                              means the computer-based system established
                                     under the Uncertificated Securities
                                     Regulations 2001 which enables title to
                                     units of relevant securities (as defined in
                                     the Regulations) to be evidenced and
                                     transferred without a written instrument and
                                     in respect of which CRESTCo Limited is the
                                     Operator (as defined in the Regulations);

'Existing Ordinary Shares'           the 38,045,381 Ordinary Shares in issue at
                                     the date of this document;

'Extraordinary General Meeting' or   the extraordinary general meeting of the
'EGM'                                Company to be held at The Bridgewater Hall,
                                     Lower Mosley Street, Manchester M2 3WS at
                                     11:50 a.m. on 20 April 2007, notice of which
                                     is set out at the end of the Circular;

'GMW PFI Announcement'               the announcement made by the Company on 29
                                     January 2007 that the Viridor-Laing
                                     consortium had been awarded preferred bidder
                                     status in relation to the Greater Manchester
                                     Waste PFI contract;

'IVC'                                in-vessel composting;

'New Ordinary Shares'                the 10,000,000 Ordinary Shares to be issued
                                     pursuant to the Placing;

'NOFCO'                              the Natural Organic Fertilizer Company Ltd,
                                     a subsidiary of the Company;

'Ordinary Shares'                    ordinary shares of 5 pence each in the share
                                     capital of the Company;

'PFI'                                Private Finance Initiative;
'Placing'                            the conditional placing by Canaccord of the
                                     New Ordinary Shares at the Placing Price;

'Placing Agreement'                  the agreement dated today, a summary of
                                     which is set out in paragraph 13 of this
                                     announcement;

'Placing Price'                      the price at which the New Ordinary Shares
                                     will be issued pursuant to the Placing,
                                     being £1.10 per New Ordinary Share;

'Proxy Form'                         the form of proxy accompanying the Circular
                                     for use by Shareholders at the Extraordinary
                                     General Meeting;

'Resolutions'                        the special resolution and the ordinary
                                     resolution to be proposed at the EGM, as set
                                     out at the end of this announcement;

'Share Option Schemes'               the TEG Unapproved Share Option Scheme, the
                                     Company Share Option Plan and the Company
                                     Enterprise Management Incentive Share Option
                                     Plan;

'Shareholders'                       holders of Ordinary Shares.



Canaccord Adams Limited (which is authorised and regulated in the United Kingdom
by the Financial Services Authority) is acting solely for The TEG Group plc in
connection with the Placing and is not acting for any person other than The TEG
Group plc and will not be responsible for any person other than The TEG Group
plc for providing the protections afforded to customers of Canaccord Adams
Limited or for providing advice to any person in connection with the matters
described in this announcement.


This announcement does not constitute, or form any part of, an offer or
solicitation of an offer to subscribe for the New Ordinary Shares.




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