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Cube8 Group PLC (VAL)

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Wednesday 21 November, 2001

Cube8 Group PLC

Disposal

Cube8 Group PLC
21 November 2001


                               Cube 8 Group plc

                        Sale of 61% of Freeloader.com



The Board of Cube 8 Group plc announce that they have completed the disposal
of 61% of Freeloader.com, one of the world's leading games websites, to the
management team for a nominal consideration of £61.00 payable in cash. This
follows Cube8's announcement that it wishes to reduce all stakes in its
portfolio to minority holdings.


The asset value of Freeloader.com in the Company's balance sheet as at 30 June
2001 was £719,000 and produced losses in the period to 30 June of £113,845.


The Directors of Cube 8, with the exception of Tarick Kreimeia and David
Dobson who are involved in the transaction, consider, having consulted with
the Company's Nominated Adviser, that the terms of the transaction are fair
and reasonable insofar as the shareholders of the Company are concerned.


Tarick Kreimeia, David Dobson and SIP have purchased, between them, 61% of the
business for a nominal sum of £61. Mr Kreimeia, Managing Director of
Freeloader.com, now holds 51% of the business. As part of the deal, £350,000
of Cube8 cash invested in the company as a loan has been converted to
redeemable preference shares.


The MBO was prompted by the sudden downturn in online advertising expenditure
immediately after the September 11th attacks. When it became apparent that
Cube8 would need to continue funding losses for longer than previously
expected, all Freeloader staff were given notice whilst a solution was sought.


'From Freeloader's point of view this is good news,' said Cube8 Chief
Operating Officer Steve Masters. 'The company now controls its own destiny and
will therefore not be affected by any actions taken by the Cube8 board
regarding its portfolio. We have already announced that we wish to reduce our
stakes to minority holdings to stem all further liabilities.'


Mr Masters added that the Cube8 board also had more confidence in the business
succeeding as a private concern with a minority Cube8 ownership. He said,
'Tarick is now able to try to take the business forward in a focussed and
independent manner, on a low cost base, which we hope will give the business a
better chance of success. We have every confidence that our preference shares
and our 39% share of ordinary shares in the business will give us, in the long
term, a premium on the price we paid for the business.'


Cube8 purchased Freeloader.com from Pure Entertainment Games plc for £600,000
in Cube8 shares.


Mr Kreimeia, a Cube8 non-executive director who was appointed Freeloader
Managing Director by the Cube8 board, said 'At this stage, we are operating on
a reduced team of three, including myself, with unpaid advisors in the shape
of my fellow shareholders. We have been forced to switch to a minimised
version of our site to keep hosting and maintenance costs down while we
rebuild the business to include a subscription and pay-to-play model. I am
hoping that the rebuild should take three to four months, at which point we
will re-launch the site'.


For more information, contact

Steve Masters

[email protected]
07932 065767


Tarick Kreimeia

Freeloader.com
[email protected]
020 7479 2709


Additional information:


Cube8 suspended its shares on AIM while it completed talks that may lead to a
reverse takeover. These talks are continuing and the company hopes to make a
further announcement in due course.



            

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