Capital Reorganisation

Berkeley Berry Birch PLC
15 December 2005



Proposed Capital Reorganisation, amendment of Articles of Association and Notice
                        of Extraordinary General Meeting

Berkeley Berry Birch plc ('BBB' or the 'Company') is today sending a circular to
shareholders of the Company setting out full details of its proposed capital
reorganisation.

The Company announced on 1 December 2005 that it was requesting a suspension of
trading in its ordinary shares. In that announcement BBB stated that progress
was being made in addressing the Company's regulatory capital shortfall and
future working capital requirements. The Company is working on proposals to
rectify the regulatory capital shortfalls by means of planned disposals and an
equity fundraising. These plans are being advanced but, to date, the Financial
Services Authority has not satisfied itself of the adequacy of these proposals.

In order to facilitate any fundraising, the Company is undertaking a
reorganisation of its existing share capital. This capital reorganisation is
necessitated by the Companies Act 1985 (the 'Act'), which prevents companies
from issuing shares at a discount to their par value. The par value of an
ordinary share is currently 10 pence, as compared with a market price of 5 pence
per share at the close of business on 30 November 2005 (the latest practicable
date prior to the suspension of trading in the ordinary shares of the Company).
Consequently, it is proposed to sub-divide each of the existing ordinary shares
of 10 pence into 1 ordinary share of 1 penny and 9 deferred shares of 1 penny
each. Other than the change in par value the ordinary shares of 1 penny each
will have the same rights as the existing ordinary shares, including voting,
dividend and other rights. The deferred shares will effectively be worthless and
collectively have a negligible value following the capital reorganisation.
All of the ordinary shares resulting from the capital reorganisation will, when
issued and fully paid, rank in full for all dividends and distributions made,
paid or declared after the date of the capital reorganisation and otherwise pari
passu in all respects. The ordinary shares can be held in certificated and
uncertificated form. For those ordinary shares held in certificated form, new
share certificates will despatched shortly after these shares are admitted to
trading.

Application will be made to the UK Listing Authority and the London Stock
Exchange for the ordinary shares of 1 penny resulting from the capital
reorganisation to be admitted to listing on the Official List and to trading on
the London Stock Exchange's main market for listed securities. It is expected
that admission will become effective and that dealings in the ordinary shares
will commence at the same time as the suspension of trading in the Company's
ordinary shares is lifted.

Following the capital reorganisation the number of ordinary shares in issue will
be 91,788,604, giving the Company a market capitalisation of £4.6 million at the
mid-market price of 5 pence (the latest practicable date prior to the suspension
of trading in the ordinary shares of the Company).

Shareholders approval for the capital reorganisation is being sought at an
extraordinary general meeting ('EGM') convened for 11.00a.m. on 9 January 2006.
At the EGM it is also being proposed to increase the Company's authorised share
capital in order to enable any equity fundraising to take place. This proposed
increase will leave the Company with a balance of authorised but unissued
ordinary share capital (which is not reserved for issue in respect of
outstanding options) of 116,666,667 Ordinary Shares having a nominal value of
£1,166,667 (representing 127.10 per cent. of the Company's issued share capital)
which the Directors believe is an appropriate level of authorised but unissued
share capital to cover any equity fundraising.

Shareholder authority is also being sought at the EGM to permit the board to
issue shares required to implement any fundraising and to provide an appropriate
level of authorised but unissued share capital following completion of any
fundraising which the directors have authority to allot, subject always to the
statutory rights of pre-emption contained in section 89 of the Act. The
disapplication of the statutory rights of pre-emption referred to above which is
being proposed at the EGM is also required to implement any proposed fundraising
and to provide limited authority to allot shares for cash thereafter otherwise
than pro rata to shareholders.

As the capital reorganisation will involve the creation of deferred shares the
Company will need to amend its articles of association to set out the rights
attaching to the deferred shares and this will also require shareholder approval
at the EGM.

The rights attaching to the deferred shares (as reflected in the proposed
amendments to the articles of association) will be as follows, namely:

• no rights to participate in or receive any dividends declared made or paid by
the Company,

• no right to receive notice of, attend or vote at any general or class meeting
(other than a class meeting of the deferred shares) of the Company;

• a limited right to a return of capital in a winding-up after the rights of the
holders of the ordinary shares have been discharged in full and a sum of £1 has
been paid in respect of each issued ordinary share but no other right to
participate in the assets of the Company; and

• the approval of the directors of the Company shall be required for any
transfer of the deferred shares.

As soon as the Company is in a position to inform shareholders fully of its
proposals to rectify its regulatory capital shortfalls a further circular will
be sent to shareholders prior to any fundraising being implemented. Further
shareholder approval will be required at that time to effect any such
fundraising.

Enquiries:

BBB plc
Jonathan Hall 02476 232010

Arden Partners
Andrew Raca, Director, Corporate Finance 0121 423 8941

End 15/12/05


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