Issue of Equity

United Overseas Group PLC
5 July 2001


                          United Overseas Group plc

Proposed 12 for 7 Rights Issue of 239,835,324 New Ordinary Shares at 2.5p per
                                    share,

                       Proposed Capital Reorganisation

                                     and

                      Reconvened Annual General Meeting


The Directors of United Overseas announce a proposed Rights Issue to raise
approximately £5.6 million, net of expenses, and a proposed Capital
Reorganisation whereby the existing issued ordinary shares of 10p will each be
sub divided and converted into one new ordinary share of 1p and nine deferred
shares of 1p. The Rights Issue, which is on the basis of 12 Rights Shares for
every 7 Ordinary Shares held on 24 July 2001, at a price of 2.5p per Rights
Share, has been underwritten by Jeffrey Curtiss and Madeleine
Sandersson-Curtiss, the two largest shareholders of United Overseas.

The Board believes that without this Rights Issue and associated Capital
Reorganisation, the Company will have insufficient working capital to continue
trading and will therefore cease trading immediately.



Background to and reasons for the Rights Issue

United Overseas is a worldwide distributor of branded consumer goods. Prior to
its flotation in 1997, and immediately afterwards when United Overseas and its
subsidiary companies had substantially increased funds to expand its business,
the Company traded profitably. However, a build up of stock in 1998 and early
1999 at United Overseas Limited and a slowing in the stock turn led to a
period of unprofitable trading, increased borrowing levels and reduced
availability of cash for working capital in the UK business.

During the last two years the Group has implemented more rigid controls over
its stock purchasing and other trading activities, which has enabled it to
reduce stock and borrowing levels, particularly in the UK. After a turnaround
into profitability in 2000, when United Overseas earned £3.2 million profit
before tax, the poor economic climate in the first few months of 2001,
particularly in the toy market, has pushed the Group back into losses.
Furthermore, the effect of current trading losses has been to leave the Group
with insufficient financial resources to maintain stocks at an adequate level
in its core product lines.

The continuing poor trading conditions in the UK have caused a greatly
increased working capital requirement. As a result, the Company has had to
seek additional facilities in order to continue trading and Clydesdale Bank
has agreed to provide a temporary increase in overdraft facilities of £1.6
million. The Group now has borrowing facilities of approximately £27.7
million, of which £19.1 million are represented by overdraft, letter of credit
and forward exchange contract facilities from Clydesdale Bank for use by the
Company and United Overseas Limited, and secured by a fixed and floating
charge over the assets of the Company and United Overseas Limited.

Clydesdale Bank has informed the Company that it considers United Overseas
Limited to be under capitalised and that it would not be prepared to renew the
banking facilities without an injection of equity capital of at least £5.5
million (net of expenses). The Board has considered various banking and other
funding options, but in view of the poor trading that the Group has been
experiencing, the Board has been unable to secure other banking facilities and
believes that it would be very unlikely that there would be sufficiently wide
support for an equity issue of this amount from either existing or new
investors.

The Board therefore commenced discussions with the Group's founders and
largest shareholders, Jeffrey Curtiss and Madeleine Sandersson-Curtiss, with a
view to obtaining additional funding. They, in aggregate, own approximately 39
per cent. of the issued share capital of the Company and have agreed to
support the Group by underwriting a Rights Issue to raise £5.6 million net of
expenses provided that the Board agrees to implement certain measures. These
measures include, inter alia, an aggressive cost cutting programme including
reductions in staffing costs in the UK business and an immediate delisting of
the Company's shares, a commitment from the key trading staff to continue in
the business, agreement from the Clydesdale Bank to support the strategy and
to extend facilities for the next twelve months and the appointment of Jeffrey
Curtiss as Group Chief Executive.

In view of the support from the Underwriters, Clydesdale Bank has agreed that
all of the net proceeds of the Rights Issue may be retained by the Group for
working capital purposes and for implementing certain restructuring measures,
and that, save for the repayment of any monies drawn down under the additional
temporary overdraft facility referred to above, it will not seek to vary the
existing debt repayment schedule. Furthermore, it has confirmed that renewed
facilities, which are described in more detail in the paragraph entitled
'Banking arrangements' below, will be extended until the next review date of
30 June 2002.

The Board believes that without this equity fund raising and associated
Capital Reorganisation, the Company will have insufficient working capital to
continue trading and will therefore cease trading immediately.



Current trading and prospects

The Directors had anticipated continued profitable trading in 2001. However in
the first four months of the year, weak demand across the Group, particularly
in the UK and USA for branded excess toy inventories, has resulted in a
shortfall in the volume of goods sold.

Customers in the UK, which include major retailers and discount retailers,
ended the year with significant stocks of goods and this has caused reduced or
delayed purchases in the current year to date. Although, in recent weeks, the
trading situation has slightly improved with an increase in demand for goods
from customers and the start of the fulfilment of orders taken earlier in the
year, the Group's ability to fulfil these orders is severely restricted by its
current working capital shortage. Turnover in the year to date is well behind
budget and is expected to remain so for the next few months.

In the USA, the slowing economic cycle has also affected demand from major
retail customers and as a consequence of this, previous overstocking by
retailers and reduced demand from United Overseas Limited, turnover in the
year to date is some 18 per cent. behind last year.

The Group's operations in Holland and Ireland are also trading at a
substantially lower level of activity than that experienced in 2000.

The significant shortfall in sales in the first four months of the year has
caused the Group's profitability in the first four months of the current year
to be substantially below that achieved over the same period last year.
However, other than United Overseas Limited, the subsidiary companies are all
able to trade within their existing banking facilities.



Strategy

The Board has had detailed discussions with Jeffrey Curtiss and Madeleine
Sandersson-Curtiss in relation to the future strategy of the Group and over
the next three months there will be an extensive review of all of the Group's
operations in order to assess their opportunities and prospects. It has been
agreed that the first priority is to achieve financial stability for the Group
by returning United Overseas Limited to profitability.

Accordingly, following completion of the Rights Issue, it is planned to
implement immediate cost-cutting measures, particularly at United Overseas
Limited and at the Group's head office. These measures will include after a
period of consultation with employees, management and staff redundancies,
which are essential given the current levels of activity if the Group is to
operate at a profit.

Following this review, it is anticipated that, in due course, some or all of
the individual companies comprising the Group, may be sold, thereby generating
cash with which to reduce bank debt and, if there is any surplus, to make
distributions to Shareholders. Whilst no substantive proposals have been put
forward, the Board believes that the most suitable purchasers of some of the
Group's subsidiary companies are likely to be their current managements.

Save as outlined above, and under the paragraphs entitled 'Board changes' and
'Corporate Governance' below, following the completion of the Rights Issue, it
is intended that in the short term the business of the Group will be continued
in substantially the same manner as at present and that no material amendments
will be made to the existing employment rights of the Group's employees.

Delisting

The Underwriters do not believe that in its present financial and trading
condition there is any benefit to the Company to be gained from maintaining a
listing. Furthermore, they believe that given the Company's present
circumstances and having regard to the planned level of corporate activity,
the time and costs involved in maintaining a listing and a trading facility
are too onerous and have therefore made it a condition of their support and
financial commitment that the Company's shares be delisted. Accordingly it is
the intention of the Board that, following the despatch of share certificates
to Shareholders on completion of the Rights Issue, that the Company will make
applications for cancellation, respectively, of the trading of its shares on
the London Stock Exchange's market for listed securities and the listing of
its shares on the Official List. It is anticipated that this will take effect
on 28 September 2001. Until such time as delisting has occurred, the Listing
Rules will continue to apply to the Company. In any event, should the
Underwriters take up their full underwriting participation, the resulting
shareholding of the Underwriters will be 294,498,138 New Ordinary Shares,
representing 77.55 per cent. of the issued ordinary share capital of the
Company following the Rights Issue and Capital Reorganisation. Under the rules
of the UK Listing Authority, a company with less than 25 per cent. of its
shares in public hands will be unsuitable to remain listed. The result of
delisting will be that Shareholders will not have a recognised investment
exchange on which to trade their shares and therefore that the liquidity and
marketability of the shares will be greatly reduced.

Dividends

It is not expected that any dividends will be paid in the foreseeable future
and certainly not until the planned disposal programme is well advanced and
the Group's indebtedness has been substantially reduced. Indeed, under the
terms of the facilities from Clydesdale Bank, the Company is not permitted to
declare or make any dividend payments without its express consent.



Use of proceeds of the Rights Issue

The net proceeds of the Rights Issue will all be retained within the UK and
utilised as additional working capital in United Overseas Limited, except for
an amount of up to £1.6 million, which will be applied to repay any borrowings
drawn down under the temporary overdraft facility described in the paragraph
entitled 'Banking arrangements' below. Approximately £1.4 million of the
remainder of the net proceeds of the Rights Issue will be used immediately to
satisfy currently outstanding purchase commitments for stock.



Banking arrangements

Each of the principal trading subsidiaries within the Group has independent
banking arrangements with banks local to their own operations.

None of the facilities under these arrangements have changed since the year
end except for the facilities provided by Clydesdale Bank to the Company and
United Overseas Limited and, except for a reduction, in accordance with their
terms of loan facilities provided to the Company's Netherlands subsidiaries by
Fortis Bank NV.

Clydesdale Bank provides to the Company and United Overseas Limited a multi
option facility of £12.5 million, a £3.0 million letter of credit facility and
a £1.96 million forward exchange contract facility. Commencing on 31 July
2001, the multi option facility will reduce by £200,000 at the end of each
month. These facilities were provided with effect from 4 July 2001 and are
renewable on 30 June 2002. The provision of these facilities is subject to the
following conditions:-

*     the deposit by the Underwriters of £6 million with Clydesdale Bank, such
      amount to be held by it pending receipt by the Company of the proceeds of
      the Rights Issue. This condition has now been satisfied; and

*     completion of the Rights Issue prior to 30 August 2001.

The facilities from Clydesdale Bank are 'on demand' and are also subject to
there being no material adverse change in the trading or other conditions of
the Company and United Overseas Limited. The Company and United Overseas
Limited are currently in breach of certain of the covenants relating to these
facilities but Clydesdale Bank has confirmed that it is aware of, and has
waived, these breaches and, furthermore, that it is not aware of any reason
why these facilities may be withdrawn before 30 June 2002.

Clydesdale Bank has also provided a temporary overdraft facility of up to £1.6
million, of which £1.2 million was drawn down on 27 June 2001. Any amounts
drawn down under this facility are intended to be repaid out of the proceeds
of the Rights Issue but, in any event, are repayable on 31 August 2001.

The Underwriters have agreed to subscribe for the 93,570,537 Rights Shares to
which they are entitled in consequence of the Ordinary Shares presently held
by them and Clydesdale Bank has agreed that the subscription price of
approximately £2.3 million may be advanced to the Company on the date of
Admission, from the amount placed on deposit by the Underwriters.

In addition, the Underwriters have agreed to pay to the Company on the date of
Admission the sum of £1.2 million by way of subscription for shares renounced
in favour of the Underwriters which forms part of their obligations under the
Underwriting Agreement.



Board changes

Jeffrey Curtiss and Madeleine Sandersson-Curtiss have agreed to be appointed
to the Board with effect from 9 July 2001. Jeffrey Curtiss will become Group
Chief Executive and will assume overall responsibility for the Group's
operations and direct responsibility for United Overseas Limited. Jeffrey
Curtiss currently has an unwritten consultancy agreement with the Company and
following his appointment to the Board, that consultancy agreement will be
renewed in writing but on the same terms, save that the consultancy will be
subject to 12 months notice, whereas the existing consultancy would terminate
on 30 April 2002. He will not receive any other form of remuneration from the
Company.

Madeleine Sandersson-Curtiss will be appointed as a non-executive Director and
has entered into a consultancy agreement with the Company.

Further information on Jeffrey Curtiss and Madeleine Sandersson-Curtiss is set
out in the paragraph entitled 'Information on the Underwriters' below.

Michael Corke, currently Group Chief Executive, will become Group Managing
Director with responsibility for all operations outside of the UK.

As part of the reorganisation referred to above, Philip Green and Philip Carr,
respectively Managing Director of United Overseas Limited and Company Finance
Director, will be made redundant with effect from 1 August 2001. The Company
has not yet agreed the terms of severance with Messrs Green and Carr but any
amount payable to them will be no greater than their entitlements under the
terms of their service agreements.



Corporate Governance

The Company will continue to comply with the Combined Code on Corporate
Governance, as it has in the past, until delisting becomes effective. However
the Underwriters do not consider that the costs of continued compliance with
the Corporate Governance guidelines is merited in the Group's present
financial condition. Accordingly, following delisting, Robert van den Heuvel
and John Gordon will resign from the Board but Alex Watson will continue as
Non-executive Chairman.

Jeffrey Curtiss and Madeleine Sandersson-Curtiss have each entered into a
relationship agreement with the Company whereby for so long as either of them
or both of them together are interested in 30 per cent. or more of the issued
share capital of the Company, neither will undertake any activity or do
anything which is in conflict with the activities of the Company or which
could be detrimental to the interests of the Shareholders of the Company as a
whole.

Jeffrey Curtiss is currently the controlling shareholder and chief executive
of Univers SAM, a company which is also engaged in the distribution of branded
goods. In order to avoid any conflicts of interest he has agreed to wind down
that business so that Univers SAM can cease this trading activity within the
next three months.

Details of the Rights Issue

Subject to the Resolutions being passed at the EGM, Qualifying Shareholders
will be offered the opportunity to subscribe for Rights Shares at a price of
2.5p per Rights Share, payable in cash in full on acceptance. This offer is
being made to Qualifying Shareholders on the basis of:

12 Rights Shares for every 7 Ordinary Shares

held on the Record Date. It is expected that dealings in the Rights Shares
will commence nil paid on 31 July 2001. The latest time for acceptance and
payment in full in respect of the Rights Issue is expected to be 3.00 p.m. on
20 August 2001. The Rights Shares will, when fully paid, rank pari passu in
all respects with the then issued New Ordinary Shares and will entitle
Shareholders to all dividends declared, made or paid thereafter.

On the basis of the middle market quotation of 3.75p per Ordinary Share (as
derived from the London Stock Exchange Daily Official List for 4 July 2001)
and an issue price of 2.5p per Rights Share, the issue will be at a premium of
1.5p over the nominal value of the New Ordinary Shares of 1p and at a discount
of 1.25p to such middle market quotation.

The Rights Issue is being fully underwritten by the Underwriters.



Capital Reorganisation

Under the Act the Company is not permitted to issue new shares at a price
below their nominal value. United Overseas' existing Ordinary Shares have a
nominal value of 10p per share. In order for the Rights Issue to proceed, the
Company therefore proposes, subject to Shareholders' approval, to amend its
Articles of Association and to re-organise its share capital as follows:

(a)   Every issued Ordinary Share of 10p will be sub-divided and converted
      into:

        * 1 New Ordinary Share of 1p each; and

        * 9 Deferred Shares of 1p each.

      The New Ordinary Shares will carry identical rights, on a share for share
      basis, to the Ordinary Shares that they are replacing, i.e. each New
      Ordinary Share of 1p will be treated as though it was one existing
      Ordinary Share of 10p. Certificates for Ordinary Shares will remain valid
      for the same number of New Ordinary Shares.

      The restrictions attaching to the Deferred Shares, which will not be
      listed, will render them effectively valueless. The Deferred Shares will
      carry no rights to receive notice of, attend, speak or vote at any
      general meeting of the Company, nor to receive dividends or capital
      distributions, save that on a return of assets on a winding up, the
      Deferred Shares will entitle the holder to the amounts paid up on such
      shares after the repayment of £10,000,000 per New Ordinary Share. No
      certificates will be issued to Shareholders in respect of Deferred
      Shares.
(b)   Every unissued Ordinary Share of 10p will be divided into 10 New Ordinary
      Shares of 1p each.

The following table shows the paid up issued share capital of the Company as
it is at present and as it will be following the Capital Reorganisation and
Rights Issue:

At present Proposed

Number £'000 Number £'000

Ordinary Shares
Existing Ordinary Shares         139,903,939       13,990
of 10p
New Ordinary Shares of 1p              -           -       139,903,939    1,399
arising on split

of existing Ordinary
Shares
Issue of Rights Shares of              -           -       239,835,324    2,398
1p (1)
Total ordinary share             139,903,939    13,990     379,739,263    3,797
capital                         
                                ============    ======     ===========    =====

Deferred Shares
Deferred Shares of 1p                  -           -       1,259,135,451  12,591
Total paid up share                    -       13,990              -      16,388
capital
                                 ============    ======     ===========    =====


Note:

1. Based on the entitlement of 12 Rights Shares for every 7 Ordinary Shares
held on the Record Date.

2. The above table assumes that none of the existing issued share options are
exercised.

The Rights Shares shall be free of all liens, charges and encumbrances and
will, when issued and fully paid, rank pari passu in all respects with the
then issued New Ordinary Shares.



Information on the Underwriters

Jeffrey Curtiss founded the Group in 1976 with his wife, Madeleine
Sandersson-Curtiss and remained Chief Executive of the Group until September
2000 when he took up a non-executive role in advance of his retirement on 31
March 2001. He had been responsible for the development of the Group since its
formation.

Jeffrey Curtiss has over 30 years' of distribution and retailing experience,
ranging from direct selling to managing the extensive operations of the Group.
At the age of 20 he started his own business distributing and retailing
ladieswear and general goods which he ran with a partner until he founded the
Group.

Jeffrey Curtiss is involved in a small number of unquoted ventures in the UK
where he has interests in various properties including some which he rents to
the Group. He is the controlling shareholder of Hawk Properties Limited which
also rents a warehouse property to the Group.

In the year ended 31 December 2000, companies in the Group paid rents to Hawk
Properties Limited amounting to £430,000 and also paid rents to Jeffrey
Curtiss in respect of two further properties owned by him amounting to £
510,000. Certain of these properties have been sold or are in the process of
being sold to third parties which will continue to lease the properties to the
Group on the same terms. With effect from 6 July 2001, the rents payable by
the companies in the Group to Jeffrey Curtiss are expected to be £235,000 per
annum and no rents are expected to be payable to Hawk Properties Limited. He
has entered into a new consultancy agreement pursuant to which he will receive
a fixed annual fee of £225,000 but will not be entitled to any other
remuneration.

Madeleine Sandersson-Curtiss is a Swedish national and resident in Monaco. She
owns property in Monaco and Sweden. As a founder of the Group, she held an
executive position on the boards of its principal UK trading subsidiaries from
1976 until flotation in March 1997. She assisted in the original development
of the Group but has taken no active role in the Group since flotation. She
has entered into a consultancy agreement with the Company pursuant to which
she will receive annual fees of £80,000 in addition to her non-executive
director's fees of £20,000.

Madeleine Sandersson-Curtiss has no other business interests.



Approval of the Waiver

Under Rule 9 of the City Code, where a person or group of persons acting in
concert holds not less than 30 per cent. but not more than 50 per cent. of the
voting rights of a company, and that person or group of persons acting in
concert acquires any more such voting rights, that person or group of persons
acting in concert is normally required by the Panel to make a general offer to
all shareholders of that company. Such an offer would have to be made at a
price being at least the highest price paid by that person or group of persons
acting in concert therewith, within the preceding twelve months.

If the Underwriters take up their full underwriting participation pursuant to
the arrangements described in this document, the resulting shareholding of the
Underwriters will be 294,498,138 New Ordinary Shares, representing 77.55 per
cent. of the issued ordinary share capital of the Company following the Rights
Issue and Capital Reorganisation. However, the Panel has agreed, subject to
Independent Shareholders' approval on a poll at the EGM, to waive the
requirement for the Underwriters to make a general offer to all Shareholders
following the Rights Issue and Capital Reorganisation.

In considering that resolution, Shareholders should note that, following the
Rights Issue and Capital Reorganisation, the Underwriters, taking into account
their own entitlements under the Rights Issue, undertakings by others to
renounce entitlements in their favour, and assuming that no options granted
under the Share Option Schemes are exercised, will hold a minimum of
196,312,521 New Ordinary Shares, representing 51.70 per cent. of the issued
ordinary share capital of the Company and, dependent on the level of take-up
of Rights Shares by Qualifying Shareholders under the Rights Issue, but taking
into account commitments by certain Directors to take up their entitlements, a
maximum of 293,298,139 New Ordinary Shares, representing 77.23 per cent. of
the issued ordinary share capital of the Company.

Assuming that the Rights Issue and Capital Reorganisation are approved by
Shareholders, the Underwriters will be able to exercise at least 50 per cent.
of the voting rights exercisable in general meeting of the Company.
Shareholders should be aware that in these circumstances, the Underwriters may
in future be free to increase their shareholdings or their proportion of
voting rights in the Company, without incurring any obligations to make a
general offer under the City Code.

It is a condition of the Underwriting Agreement that the Underwriters are not
required under Rule 9 of the City Code to make a mandatory offer for the
shares that they do not already hold. Accordingly, if Independent
Shareholders' approval, on a poll at the EGM, of the Waiver is not received,
the Rights Issue cannot proceed. Consequently, the Group will have
insufficient capital to continue trading and will therefore cease trading
immediately.



Extraordinary General Meeting and reconvened Annual General Meeting

At the EGM, the following resolutions will be proposed:
1.  Resolution 1, which will be proposed as an ordinary resolution, consists of
    two parts both of which are conditional upon resolutions 2, 3, 4 and 5
    below being passed.

    Part (i) of resolution 1 is to subdivide and convert each issued Ordinary
    Share of 10p into one New Ordinary Share of 1p each and nine Deferred
    Shares of 1p each;

    Part (ii) of resolution 1 is to subdivide each authorised but unissued
    Ordinary Share of 10p each into ten New Ordinary Shares of 1p each.
2.  Resolution 2 will be proposed as an ordinary resolution and is conditional
    upon resolutions 1, 3, 4 and 5 being passed. It authorises the Directors
    for the purposes of section 80 of the Act to allot equity securities in
    connection with the Rights Issue and otherwise to allot relevant securities
    up to an aggregate nominal amount of £4,663,333 representing approximately
    one third of the nominal value of the issued ordinary share capital of the
    Company at the date of the notice. This authority shall expire on the
    earlier of the dates which is fifteen months from the date of the passing
    of the resolution, the conclusion of the annual general meeting of the
    Company in 2006 or the date (if any) on which this authority is revoked,
    varied or renewed.
3.  Resolution 3 will be proposed as an ordinary resolution for Independent
    Shareholders, to approve on a poll, the Waiver granted by the Panel to the
    Underwriters from the requirement to make a general offer for the Company
    under Rule 9 of the City Code.
4.  Resolution 4, which will be proposed as a special resolution, is
    conditional upon resolutions 1, 2, 3 and 5 being passed. It empowers the
    Directors pursuant to section 95(1) of the Act to allot equity security for
    cash pursuant to the authority of the Directors under section 80 of the Act
    conferred by resolution 2 above for the duration of such authority, as if
    the provisions of section 89(1) of the Act relating to pre-emption rights
    did not apply to such allotment, provided that such power is limited to any
    allotment of equity securities in relation to the Rights Issue, and the
    allotment of equity securities up to an aggregate nominal

    value equal to £699,500 representing approximately 5% of the nominal value
    of the issued ordinary share capital of the Company at the date of the
    notice.
5.  Resolution 5, which will be proposed as a special resolution, is to alter
    the existing Articles of Association of the Company by creating Deferred
    Shares of 1p each in the capital of the Company. If passed, the resolution
    will provide that the Deferred Shares will not entitle their holders to
    receive any dividend or other distribution and the holders of such shares
    shall not have the right to receive notice of any general meeting of the
    Company or the right to attend, speak or vote at any such general meeting.
    On a return of capital on liquidation or otherwise, holders of Deferred
    Shares shall be entitled to receive the amounts paid up in respect of
    nominal value only thereon after the repayment of £10,000,000 per New
    Ordinary Share.





Indebtedness
                                                          UK            Company

                                                        £000               £000
Secured bank overdrafts                               13,131             17,725
Secured bank loans                                         -              2,155
Secured revolving credit facility                          -              5,346
                                                      13,131             25,226

                                                       =====              =====



On the same date, the Group had obligations under finance leases of £426,182
and contingent liabilities totalling £2,286,876 in respect of guarantees (£
585,447) and documentary credits (£1,701,429).

Save as disclosed above and apart from intra-Group indebtedness at the close
of business on 15 June 2001, the Group did not have any loan capital
(including term loans) outstanding or created but unissued, nor any other
borrowings or indebtedness in the nature of borrowings, including bank
overdrafts, liabilities under acceptances (other than normal trade bills) or
acceptance credits, hire purchase commitments, obligations under finance
leases, guarantees or other material contingent liabilities.

At the close of business on 15 June 2001, the Group had cash balances of £
1,479,000.

Balances denominated in foreign currencies have been translated into sterling
using rates of exchange ruling at the close of business on 15 June 2001.



Working Capital

The directors are of the opinion that taking into account the net proceeds of
the Rights Issue and the existing bank and other existing facilities available
to the Group, it does not have sufficient working capital for its present
requirements, being at least the next twelve months from the date of the
document sent to Shareholders.

The Directors are aware that as at 30 June 2001, the Company's US subsidiary,
UniTrade Marketing Group, Inc., is in breach of certain of its banking
covenants. However the Directors believe that following the bank's formal
review, such breaches will be waived by the bank and they are not aware of any
reasons or circumstances why this should not be the case. They are of the
opinion that if the bank to UniTrade Marketing Group, Inc., agrees to waive
any breaches of covenant which will arise during this period then the Company
will have sufficient working capital for its present requirements, being at
least the next twelve months from the date of the document sent to
Shareholders.

UniTrade Marketing Group, Inc. has a 3 year revolving credit agreement with JP
Morgan Chase, dated December 2000. Similar arrangements have been in place
between JP Morgan Chase and UniTrade Marketing Group, Inc. since 1997. The
facility is subject to various financial covenants that are reviewed every
June and December and to date, any breaches of covenants have been
retrospectively waived at the time of the year end audit. Typically these have
been with regard to, inter alia, ratio of stocks to debtors. The 30 June
review has not yet taken place and although UniTrade Marketing Group, Inc. has
notified the bank that, as in the past, it will breach the covenants the bank
is unwilling to give any written assurances in respect of future breaches of
covenants as their view is that the terms of the agreement prevail.

In the unlikely event that JP Morgan Chase does not agree to waive the
breaches of covenant which will arise, the US management would seek to
negotiate revised terms to enable UniTrade Marketing Group, Inc. to continue
trading at a lower level of activity with a consequently lower level of
funding requirement. In the event that the bank is not prepared to negotiate
revised terms, the Directors are confident that UniTrade Marketing Group, Inc.
would be able to secure alternative banking facilities. However, if it is not
able to secure such alternative facilities there would be no alternative but
to offer the business for sale, liquidate the stock or file for bankruptcy
protection under the Chapter 11 regulations. If the bank is unable to recover
the full amount of its outstanding lending it would be able to call on a
guarantee of $1 million provided by United Overseas.

Directors' and Proposed Directors' intentions

Alex Watson, Michael Corke and the Proposed Directors, Jeffrey Curtiss and
Madeleine Sandersson-Curtiss, have irrevocably undertaken to take up their
beneficial entitlements under the Rights Issue, amounting in aggregate to
94,770,536 Rights Shares.

Save for John Gordon, the other Directors who are also Qualifying
Shareholders, namely Philip Green, Robert Myers, Bruce Salkin, Frank Kerins
and Bert Boersema, have irrevocably undertaken to renounce their entitlements
under the Rights Issue, amounting in aggregate to 48,079,710 Rights Shares, in
favour of the Underwriters.

John Gordon has indicated his intention to sell his entire shareholding of
100,000 Ordinary Shares, immediately following this announcement.



TERMS AND CONDITIONS OF THE RIGHTS ISSUE



Further Details of the Rights Issue

The Rights Shares will, subject to the conditions set out below, be offered to
Qualifying Shareholders at a price of 2.5 p per Rights Share, payable in cash
in full on acceptance, on the following basis:

12 New Ordinary Shares for every 7 Ordinary Shares

held on the Record Date and so in proportion for any other number of Ordinary
Shares then held. Where necessary, entitlements to Rights Shares have been
rounded down to the nearest whole number. Fractions of Rights Shares will not
be allotted to Qualifying Shareholders but will be aggregated and sold in the
market as soon as practicable after the commencement of dealings in the Rights
Shares if they can be sold, nil paid, at a price at least equal to the
expenses of sale (including any commissions, brokerage and VAT, if
applicable). The net proceeds of such sales will be retained for the benefit
of the Company.

The Rights Shares will, when issued and fully paid, rank pari passu with the
then issued New Ordinary Shares in all respects including the right to
dividends.

The allotment and issue of the Rights Shares will be made upon and be subject
to the terms and conditions set out in this document and in the Provisional
Allotment Letter to be sent to Qualifying Shareholders. Holders of Ordinary
Shares in Certificated and Uncertificated Form will be treated in the same way
for the purpose of the Rights Issue. Accordingly, Qualifying Shareholders will
only be entitled to participate in the Rights Issue in accordance with the
procedure set out below, whether they hold Ordinary Shares in Certificated
Form or Uncertificated Form.

The Rights Issue is conditional on approval of the Resolutions at the EGM to
be held on 30 July 2001, the Underwriting Agreement not being terminated and
becoming unconditional in all respects and on Admission.

The Provisional Allotment Letter to be sent to Qualifying Shareholders will
set out the holding of shares on which the relevant Qualifying Shareholder's
entitlement will be based, the aggregate number of which such holder is to be
provisionally allotted and instructions regarding acceptance and payment,
splitting, renunciation, consolidation and registration and the procedure to
be followed if a Qualifying Shareholder wishes to transfer all or part of his
entitlement.

Application will be made to the UK Listing Authority for the Rights Shares to
be admitted to the Official List and to the London Stock Exchange for the
Rights Shares to be admitted to trading on the London Stock Exchange. None of
the Rights Shares are being made available to the public other than pursuant
to the Rights Issue. Dealings in the Rights Shares are expected to commence,
nil paid, on 31 July 2001. If listing of the Rights Shares does not become
effective by that date (or such later date as the Company and the Underwriters
may agree) the provisional allotment of the Rights Shares will lapse and any
payments received will be returned without interest. If listing of the Rights
Shares is delayed beyond 31 July 2001, the timetable of the Rights Issue
described in this document will be delayed accordingly. After the latest time
for registration or renunciation and pending despatch of definitive
certificates, instruments of transfer will be certified by Northern Registrars
Limited against fully paid Provisional Allotment Letters or, in the case of
renounced Provisional Allotment Letters, fully paid registration receipt
forms.

Definitive certificates for the Rights Shares are expected to be despatched no
later than 31 August 2001 at the risk of the persons entitled thereto and on
this date allotment letters and/or receipts for renounced fully paid
Provisional Allotment Letters, will cease to be valid for any purpose
whatsoever. Alternatively, where Ordinary Shares are held in a CREST account,
the Rights Shares, subscribed for will be credited to such CREST accounts.
Pending despatch of definitive certificates and the crediting of CREST
accounts, transfers of Rights Shares will be certified against the surrender
of fully paid Provisional Allotment Letters or, where renunciation has been
registered, temporary receipts for renounced Provisional Allotment Letters
bearing the stamp of Northern Registrars Limited, Northern House, Woodsome
Park, Fenay Bridge, Huddersfield, West Yorkshire HD8 0LA.

The latest time for acceptance and payment in full is expected to be 3.00 p.m.
on 20 August 2001.

Procedure for acceptance and payment

Full instructions regarding acceptance, payment, splitting, registration,
consolidation and renunciation will be contained in the Provisional Allotment
Letter. If Qualifying Shareholders wish to take up all or part of their
entitlement to Rights Shares, their Provisional Allotment Letters, together
with a remittance in sterling for the full amount payable on acceptance, must
be lodged in accordance with the instructions to be printed thereon with the
Company's registrars by post or by hand to Northern Registrars Limited,
Northern House, Woodsome Park, Fenay Bridge, Huddersfield, West Yorkshire HD8
0LA so as to arrive not later than 3.00 p.m. on 20 August 2001. If a
Qualifying Shareholder wishes to accept part only of his provisional
allotment, he should first apply for split Provisional Allotment Letters in
accordance with the paragraph below headed 'Splitting, renunciation and
transfer''.

All payments must be received by Northern Registrars Limited by way of a
cheque or bankers' draft drawn in pounds sterling, made payable to 'Northern
Registrars Limited - A/c United Overseas Group plc'' and crossed 'A/c Payee''
and drawn on a bank or building society in the UK which is either a settlement
member of the Cheque & Credit Clearing Company Limited or the CHAPS Clearing
Company Limited or which has arranged for its cheques and banker's drafts to
be cleared through the facilities provided for settlement by the members of
either of those companies and must bear the appropriate sorting code in the
top right hand corner. Any application which does not comply with these
requirements may be treated as invalid. Cheques and banker's drafts may be
presented for payment on receipt. No interest will accrue on payments made
before the due date. Any person returning the Provisional Allotment Letter
with the remittance in the form of a cheque, warrants that the cheque will be
honoured on first presentation. The Company may elect not to treat as valid,
acceptances in respect of which cheques are not so honoured. The Company
reserves the right to instruct Northern Registrars Limited to seek special
clearance of cheques to allow the Company to obtain full value for remittances
to be obtained at the earliest opportunity. Any monies paid in excess of the
amount due in respect of an application made will be returned to the applicant
(as the applicant's risk) without interest as soon as practicable.

The Company reserves the right, but shall not be obliged, to accept:

(i) Provisional Allotment Letters and accompanying remittances which are
    received through the post not later than 10.00 a.m. on 21 August 2001 (the
    cover bearing a legible postmark not later than 3.00 p.m. on 20 August
    2001); and
(ii) acceptances in respect of which remittances are received prior to 3.00 p.m.
    on 20 August 2001 from an authorised person (as defined in the Financial
    Services Act 1986) specifying the Rights Shares concerned and undertaking
    to lodge the relevant Provisional Allotment Letter duly completed in due
    course.

The Company also reserves the right, but shall not be obliged, to treat a
Provisional Allotment Letter as valid and binding on the persons by whom or on
whose behalf it is lodged, even if it is not completed in accordance with the
relevant instructions or is not accompanied by a valid power of attorney,
where required.

All queries in connection with the Provisional Allotment Letters should be
addressed to Northern Registrars Limited, Northern House, Woodsome Park, Fenay
Bridge, Huddersfield West Yorkshire HD8 0LA or on telephone number 01484 600
900.

All documents or remittances sent by or to a Qualifying Shareholder, or as he
may direct, will be sent through the post at his own risk.



Splitting, renunciation and transfer

A Qualifying Shareholder may wish to split his Provisional Allotment Letter in
order to dispose of part of his entitlement and retain the balance, or to
dispose of part or all of his entitlement to more than one person in which
case he must complete and sign Form X on such letter in accordance with the
instructions thereon. The Provisional Allotment Letter must then be lodged, by
post or by hand, with Northern Registrars Limited, Northern House, Woodsome
Park, Fenay Bridge, Huddersfield, West Yorkshire HD8 OLA by 3.00 p.m. on 16
August 2001 to be cancelled and exchanged for the split letters required. The
number of split Provisional Allotment Letters required and the number of
Rights Shares to be comprised in each split letter should be stated in an
accompanying letter.

The right to all (and not part only) of the Rights Shares comprised in any
Provisional Allotment Letter may, save as provided by the laws of certain
foreign jurisdictions, be transferred by renouncing the Provisional Allotment
Letter or, in the case of a person in whose favour rights have been renounced,
by delivery of such letter to the transferee. The Provisional Allotment Letter
may be renounced by completing and signing Form X on the Provisional Allotment
Letter and handing the Provisional Allotment Letter intact to the person
through or to whom the right to Rights Shares is being transferred. Once
renounced, a Provisional Allotment Letter will become a negotiable document in
bearer form.

On the basis of the expected timetable, the latest time for registration of
renunciation will be 3.00 p.m. on 20 August 2001. Thereafter the Rights Shares
will be in registered form. After 20 August 2001 and pending the issue of
definitive share certificates, instruments of transfer will be certified by
Northern Registrars Limited against lodgement of fully paid Provisional
Allotment Letters or, in the case of renounced Provisional Allotment Letters,
fully paid registration receipt forms.

Rights Shares will not be registered in the names of persons other than
Qualifying Shareholders unless the renouncer or his agent completes Form Y on
the Provisional Allotment Letter and lodges the entire letter, by post or by
hand, with Northern Registrars Limited, Northern House, Woodsome Park, Fenay
Bridge, Huddersfield, West Yorkshire HD8 OLA, or by hand only (during normal
business hours) to Northern Registrars Limited. Registration cannot be
effected unless the amount payable in respect of the Rights Shares subscribed
for is paid in full.



Procedure in respect of rights not taken up

If you do not wish to take up your entitlement, you do not need to take any
action.

If payment in full in respect of any Rights Shares (whether from the original
provisional allottee or any person in whose favour the rights have been
renounced) has not been received before 3.00 p.m. on 20 August 2001 in
accordance with the procedure laid down for acceptance and payment in the
Provisional Allotment Letter, or such later time as may be permitted under the
paragraph above headed 'Procedure for acceptance and payment', then the
provisional allotment will be deemed to have been declined and will lapse. Any
rights to Rights Shares not so taken up will be placed in the market by
Williams de Broe not later then 3.00 p.m. on 21 August 2001 provided that a
price at least equal to the Issue Price and placing expenses, including any
value added tax, can be obtained. The excess of net placing proceeds over the
Rights Issue Price (after expenses) will be distributed pro rata among those
Qualifying Shareholders who were originally entitled to take up such rights
(and to certain overseas Qualifying Shareholders) save that amounts of less
than £3.00 will be retained for the benefit of the Company. Cheques for the
amounts due will be sent by post at the risk of such persons to their
registered addresses.

Neither the Company nor Williams de Broe nor any person arranging for placees
to take up Rights Shares following the latest date for acceptance and payment
shall be responsible for any insufficiency or alleged insufficiency of any
price at which such Rights Shares may be placed or the timing of such placing
or any decision not to seek placees. Williams de Broe shall not be obliged to
procure such persons to take up Rights Shares on the terms described above if
in their opinion there is no reasonable prospect of such persons being found.


Key Dates for the Proposed Rights Issue
                                                                           2001

Record date for the Rights Issue                  Close of business on Tuesday,
                                                                        24 July
Latest time and date for receipt of completed      10.00am on Saturday, 28 July
forms of proxy
Extraordinary General Meeting                          10.00 on Monday, 30 July
Reconvened Annual General Meeting                      10.15 on Monday, 30 July
Provisional Allotment Letters despatched                        Monday, 30 July
Dealings expected to commence in the Rights                    Tuesday, 31 July
Shares, nil paid,

and the Ordinary Shares marked ex-rights
Latest time and date for splitting Provisional       3.00pm Thursday, 16 August
Allotment Letters
Latest time and date for acceptance and payment        3.00pm Monday 20, August
in full
Latest time and date for registration of               3.00pm Monday 20, August
renunciation
Expected date for crediting of CREST accounts               Thursday, 23 August
Expected date for despatch of definitive share             by Friday, 31 August
certificates for

Rights Shares



Definitions

The following definitions apply throughout this announcement, unless the
context requires otherwise:

'Act'           the Companies Act 1985 (as amended)
'Admission'     admission of the New Ordinary Shares, in nil paid form, to the
                Official List becoming effective in accordance with the Listing
                Rules which is expected to take place on 31 July 2001
'Annual General the annual general meeting originally convened for 21 June 2001
Meeting' or     and reconvened for 10.15 a.m. on 30 July 2001 or as soon
'AGM'           thereafter as the EGM shall have been concluded or adjourned
'Capital        the proposed reorganisation of the Company's share capital
Reorganisation'
'City Code'     The City Code on Takeovers and Mergers
'Clydesdale     Clydesdale Bank PLC, the bankers to the Company and United
Bank'           Overseas Limited
'Deferred       the 1,259,135,451 deferred shares of 1p each in the capital of
Shares'         the Company arising from the Proposed Capital Reorganisation
'Directors' or  the board of the directors of the Company
'Board'
'Extraordinary  the extraordinary general meeting of the Company to be held at
General         10.00 a.m. on 30 July 2001
Meeting' or
'EGM'
'Independent    Shareholders other than the Underwriters
Shareholders'
'Listing Rules' the Listing Rules, made under section 142 of the Financial
                Services Act 1986
'New Ordinary   the 379,739,263 new ordinary shares of 1p each in the share
Shares'         capital of the Company, arising from the proposed Rights Issue
                and the proposed Capital Reorganisation
'Ordinary       the 139,903,939 issued ordinary shares of 10p each in the
Shares'         capital of the Company whether in Certificated or
                Uncertificated Form
'Panel'         The Panel on Takeovers and Mergers
'Proposed       Jeffrey Curtiss and Madeleine Sandersson-Curtiss
Directors'
'Provisional    the renounceable provisional allotment letter(s) to be sent to
Allotment       Qualifying Shareholders in connection with the Rights Issue
Letter(s)'
'Qualifying     shareholders on the Company's register on the Record Date
Shareholders'   (other than certain overseas shareholders)
'Record Date'   the close of the business on 24 July 2001
'Resolutions'   the resolutions set out in the notice of EGM sent to
                Shareholders
'Rights Issue'  the proposed Rights Issue to Qualifying Shareholders by way of
                rights
'Rights Issue   2.5p per New Ordinary Share
Price'
'Rights Shares' the 239,835,324 New Ordinary Shares to be issued pursuant to
                the Rights Issue
'Shareholders'  the holders of Ordinary Shares
'Underwriters'  Jeffrey Curtiss and Madeleine Sandersson-Curtiss
'Underwriting   the agreement dated 5 July 2001 between the Company and the
Agreement'      Underwriters relating to the Rights Issue
'United         United Overseas Group plc
Overseas' or
the 'Company'
'United         United Overseas and its subsidiary undertakings
Overseas Group'
or the 'Group'
'United         United Overseas Limited, the Group's principal trading
Overseas        subsidiary, based in the UK
Limited'
'Waiver'        the proposed waiver of the obligation to make a general offer
                under Rule 9 of the City Code, granted by the Panel conditional
                on the approval of the Independent Shareholders by the passing
                on a poll of Resolution 3 at the EGM
'Williams de    Williams de Broe Plc
Broe'



Further information:

United Overseas Group plc Michael Corke (Group Chief Executive) tel: [phone]
300

Williams de Broe Plc Tim Worlledge/Alastair Stratton tel: [phone]

Binns & Co. PR Ltd      Peter Binns/Paul Vann tel: [phone]