Disposal

API Group PLC
08 December 2004



8 December 2004


                                 API GROUP PLC

                       SALE OF METALLISED PAPER DIVISION


API Group plc, the specialist packaging group, announces today the sale of its
Metallised Paper division to Metallised Products Limited, a company established
for the purpose of the acquisition controlled by a management buy-in group.


The Metallised Paper division manufactures a range of specialised
aluminium-coated papers for use in cigarette packaging and as label papers in
the food and drinks industries. The operating loss before exceptional items and
goodwill amortisation of the Metallised Paper division increased to £2.7 million
for the year to 30 September 2004 from a loss of £0.4 million in the previous
year, following a 13% reduction in sales.


Included in the sale are the production assets, working capital and employees of
the business. The purchase price, which is subject to completion accounts,
comprises a deferred consideration of £0.5 million, of which £0.1 million is
payable in March 2005, with the balance due in two equal instalments in April
2006 and April 2007. The estimated net book value of the assets and working
capital acquired at completion is £2.4 million which is stated net of a loan
from API Group plc of £0.6 million which is due for repayment in March 2005. The
net proceeds from the disposal will be applied to reduce Group debt.


In addition, Metallised Products Limited has entered into a lease for the
division's premises in Caerphilly for a minimum period of five years and has
been granted an option to purchase the premises within the next twelve months at
a price to be determined by reference to an independent valuation up to a
maximum of £0.6 million.


The payment obligations of Metallised Products Limited to API Group plc that are
due to be paid in March 2005 are secured by way of a floating charge over the
assets that have been sold.


Commenting on the disposal, David Walton, API Group Chief Executive said:


'We indicated in our recent results announcement that we were reviewing our
strategic options for the Metallised Paper division. Its disposal represents
another important step in refocusing the Group on its core activities of Foils
and Laminates, which are profitable and expanding. The elimination of the losses
and funding requirements arising from the Metallised Paper division will
positively impact the Group's results and financial position.'


                                      ENDS


Enquiries:

David Walton, Chief Executive, API Group plc                      020 7653 3300

Tim Spratt/Michelle Morton, Financial Dynamics                    020 7831 3113


                      This information is provided by RNS
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