Future Strategy

Lupus Capital PLC
21 November 2002



21 November 2002


PRESS RELEASE

Lupus Capital plc - Future Strategy

The board of Lupus Capital plc ('Lupus' or the 'Company'), together with its
advisers, has been giving, as stated in its circular to shareholders dated 5
November 2002, further detailed consideration to the structure of the Company.
The board of Lupus (the 'Board') has now reached the following conclusions.


The Board considers that there are two points to be recognised:


  • Lupus's business model is a very effective means of meeting the strategic
    challenges encountered by small and medium sized companies.  The relevance
    of such a business model is increasing and the Board notes that within the
    last fortnight two groups have announced similar plans.
  • The depressed state of the financial markets - and the demands for
    liquidity and cash - have meant that fewer and fewer institutional investors
    have an appetite for investing in small public companies and hence a desire
    to invest in a company of Lupus's size and nature.  This is in contrast to
    the position of a large number of individual shareholders who are supportive
    of smaller companies including Lupus.  However, no public company wishing to
    grow - as Lupus does - can flourish without sustained support from
    institutional investors.



The Board is, therefore, announcing some far-reaching decisions.


As an initial measure the Board intends to launch, subject to shareholder
approval, a tender offer to return up to £2 million to shareholders by the end
of January 2003.  This is in recognition of the short-term needs for cash and
liquidity of some shareholders.  The Board intends formally to announce the
tender offer and post the necessary circular to shareholders before Christmas
with a view to holding the required extraordinary general meeting during January
2003.


Discussions with potential buyers continue in relation to the sale of Gall
Thomson Environmental Limited ('Gall Thomson').  If a sale of Gall Thomson is
achieved (subject to shareholder approval), one of two options will be chosen to
return value to shareholders:


  • All other assets of the Company will be sold, the Company effectively
    wound down and all net proceeds returned to shareholders as quickly and
    prudently as possible.
  • Alternatively, in the unlikely event of significantly more favourable
    financial market conditions for small companies - and particularly for
    companies like Lupus - becoming apparent during the early part of next year,
    the Board would consider a further tender offer returning part of the net
    proceeds from the sale of Gall Thomson.  This would allow those who did not
    wish to participate in Lupus's future to sell their shares while those
    shareholders who shared the Board's enthusiasm for its strategy would have
    the option to continue to participate in the Company's future.


In the event that a satisfactory offer for Gall Thomson is not forthcoming, the
Board is prepared to pursue other options to maximise shareholder value.


The Board will report back to shareholders as soon as possible and no later than
the announcement of Lupus's results for the year to 31 December 2002, scheduled
for late March 2003.


As a further sign of the Board's commitment to resolving the Company's future in
the best interests of shareholders, the executive directors of the Company and
the other members of the management team will convert their rolling twelve month
employment contracts to twelve month fixed employment contracts to take effect
from 1 December 2002.


The Board repeats its recommendation that shareholders vote against all the
resolutions proposed by the requisitionists at the Extraordinary General Meeting
to be held on Thursday, 28 November 2002.


                                    - Ends -




Lupus Capital plc                                    Tel: [phone]
Charles Ryder, Chief Executive                       www.lupuscapital.com
James Orr, Finance Director


Oriel Securities Limited                             Tel: [phone]
Simon Bragg/Adrian McMillan


Merlin Financial                                     Tel: [phone]
Paul Downes/Tom Randell






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