Disposal

Carclo plc
25 April 2006


For immediate release                                            25th April 2006
                                   Carclo plc
                                   ('Carclo')

Proposed disposal of the business and operating assets of CTP Gills Cables
Limited and 50 per cent. shareholding in CTP Suprajit Automotive Private Limited

Carclo is pleased to announce that it has today reached conditional agreements
to sell the business and operating assets of CTP Gills Cables Limited ('Gills')
and to sell its 50 per cent shareholding in CTP Suprajit Automotive Ltd ('CTP
Suprajit') to Suprajit Engineering Ltd ('SEL').

SEL is the 50/50 joint venture partner of Carclo in respect of CTP Suprajit and,
accordingly, the disposal is a related party transaction for Carclo under the
Listing Rules. Completion is, therefore, subject to approval by shareholders. A
circular convening the relevant shareholder meeting and providing further
details of the disposal will be despatched to shareholders shortly.

The aggregate consideration from the sale of the Gills business and the 50%
shareholding in Suprajit is expected to be £2.2 million. Of this £2.2 million,
£1.4 million is payable on completion (£1.3 million as initial consideration for
the Gills business and £0.1 million as consideration for the sale of shares in
CTP Suprajit) which is expected to occur on or around 12 May 2006 and £0.4
million is the repayment of a term loan from Carclo to CTP Suprajit. An
additional deferred payment in the region of £0.4m, due in May 2008, is also
anticipated based on the performance of the Gills business going forward.

In addition, Gills will also retain its freehold property, Packington Hall (last
revalued in 1999), with a net book value of £0.8 million and its trade debts
which are estimated to be £1.4 million, which will be realised for cash. The
disposal is expected to generate a profit net of transaction costs of £1.1
million as the combined operating assets of Gills and Carclo's 50 per cent.
shareholding in CTP Suprajit are being sold at a premium to the combined net
book value at completion. Furthermore, the continuing restructuring of the Gills
cost base will now take place outside the group.

Carclo intends to use the proceeds initially to reduce the group's bank debt. In
due course, it is also intended that Carclo will make a payment of up to £1.2
million to the Carclo Group pension schemes to accelerate the reduction in the
schemes' deficit.

Completion of the disposal will be conditional on the satisfactory conclusion of
the UK employee consultation process as well as being conditional on shareholder
approval.

Commenting on the disposal Ian Williamson, Carclo Chief Executive, said:

'The agreements announced today are not only in the best interests of the Gills
business, CTP Suprajit and Carclo but they also enable us to focus our attention
more closely on our quality Technical Plastics operations and on the increasing
pace of development of Conductive Inkjet Technology (CIT).'

Strategy and background to and reasons for the Disposal

Since 1997 Carclo has followed a strategy of focusing on its high quality
Technical Plastics operations, which have expanded through acquisitions in the
UK and USA and the development of operations in low cost regions. More recently,
Carclo's primary focus has been on growing its specialist medical moulding and
optical component businesses as well as expanding its general moulding
businesses in the Czech Republic and China. Carclo has also prioritised the
commercialisation of Conductive Inkjet Technology and the development of other
technologies and proprietary know how. In conjunction with this strategy, Carclo
has sought to dispose of non-core businesses.

In 2004, in response to increased pricing pressure in the automotive industry,
Carclo entered into discussions with SEL to develop an Indian control cable
manufacturing operation, which would provide a low cost manufacturing base to
support Carclo's UK automotive cables operation, Gills. On 1 December 2004
Carclo entered into a joint venture agreement with SEL and the joint venture was
established through the creation of a new Indian company, CTP Suprajit. CTP
Suprajit commenced the production of control cables at its Bangalore facility in
April 2006.

The outsourcing of control cable manufacture to India should enable Gills to
become a more competitive supplier to the major car manufacturers across Europe.
However, the success of this strategy will depend on CTP Suprajit winning
significant new contracts and on the effective restructuring of Gills in the UK
to become a sales & marketing and design & technology operation.

The Board has believed for some time that it is in the best interest of the
Gills business, CTP Suprajit and Carclo if the restructuring of the businesses
takes place outside the Carclo Group allowing Carclo to focus on its core
activities.

SEL is a world-class supplier of automotive cables and both Gills and CTP
Suprajit fit well with its existing business and its strategy to gain market
share globally using a competitive cost base. Having received an offer for Gills
and its 50 per cent. shareholding in CTP Suprajit from SEL, which appropriately
reflects the value of the businesses, the Board has concluded that it should
pursue the disposal.

Information on Gills and CTP Suprajit

Gills
Gills manufactures control cables at its Packington Hall facility near Tamworth,
but in recent years has been actively pursuing a strategy of outsourcing
manufacture to lower cost regions, including to SEL.

For the year ended 31 March 2005, Gills reported sales of £11.0 million and a
loss before tax of £101,400. For the six months ended 30 September 2005, Gills
reported sales of £4.1 million and a loss before tax of £114,351. As at 30
September 2005, the net asset value and the gross asset value of the assets of
Gills, which are subject to the disposal, amounted to approximately £584,000 and
£1,818,000 respectively.

CTP Suprajit
CTP Suprajit was incorporated on 21 December 2004 and is located in Bangalore in
Karnataka State in India. The company is not yet fully operational. No income or
costs were recognised in the profit and loss account for the period from
incorporation to 30 September 2005. As at 30 September 2005, the net assets of
CTP Suprajit were approximately £257,000 (Rupees 20 million) and the gross
assets were approximately £514,000 (Rupees 40 million).

To date, Carclo has invested a total of £523,000 in CTP Suprajit. Of this,
£125,000 was invested in the share capital of CTP Suprajit with the remainder
invested through a term loan.

Principal terms and conditions of the Disposal

Under the Sale and Purchase Agreements, Carclo will sell (or procure the sale
of) the business and operating assets of Gills and, conditional on the
completion of the Business Sale and Purchase Agreement, its 50 per cent.
shareholding in CTP Suprajit to SEL for a maximum total cash consideration of
£2.4 million (£2.3 million in respect of Gills and £0.1 million in respect of
CTP Suprajit). A further £0.4 million will be received as repayment of a loan
from Carclo to CTP Suprajit. The maximum aggregate amount payable under the Sale
and Purchase Agreements is therefore £2.8 million. Immediately following the
completion of the Business Sale and Purchase Agreement, Carclo and SEL shall
enter into the Share Sale and Purchase Agreement. These transactions have been
aggregated in accordance with the requirements under the Listing Rules as the
transactions will occur simultaneously and are with the same related party,
being SEL.

Of the £2.8 million, £1.4 million is payable on completion (£1.3 million as
initial consideration for the Gills business and £0.1 million as consideration
for the sale of shares in CTP Suprajit), which is expected to occur on or around
12 May 2006. The remaining £1.4 million is payable as follows: £0.4 million
being the repayment of a term loan from Carclo to CTP Suprajit which is
repayable on the approval of the Reserve Bank of India. A further payment (up to
a maximum of £1.0 million) will be made on 30 May 2008, being the deferred
variable element to the consideration for the sale of the Gills business,
calculated as 50 per cent. of the sum of the earnings before interest, tax and
depreciation of the Gills business less the costs of redundancy of the
transferring employees for the period from completion up to 31 March 2008. The
directors expect that, based upon their understanding of the Gills business and
the current business plan for Gills, the actual deferred variable element
received will be in the region of £0.4 million.

Excluded from the transaction are the following items on the Gills balance sheet
at completion; freehold land and buildings, trade debts, bank balances, deferred
tax and inter group balances. The freehold property will be retained by Carclo
and leased to SEL's new UK subsidiary company with effect from completion for a
period of 12 months for a peppercorn rent. The trade debts of Gills stated in
the completion balance sheet will be collected on behalf of Gills by SEL's new
UK subsidiary company and remitted to Gills subsequent to completion. It is
estimated that the trade debts stated in the completion balance sheet will
amount to approximately £1.4 million. Upon completion Gills will remain within
the Carclo group.

The unaudited net assets of Gills are estimated to be £2.5 million at 31 March
2006. Of this, £0.4 million (in aggregate) of these assets will be transferred
to SEL at completion, being the plant and equipment, stock, prepayments and
other debtors, and trade and other creditors. The balance of the net assets,
which are not subject to the disposal, will be retained by Gills at their net
book value. These unaudited figures have been sourced, without material
adjustment, from the latest management accounts dated 4 March 2006.


                                     - Ends-

Enquiries:
Carclo plc                                                          01924 268040
Ian Williamson, Chief Executive
Robert Brooksbank, Finance Director

Dresdner Kleinwort Wasserstein Limited                             020 7623 8000
Michael Covington
Robert Dawson

Weber Shandwick Square Mile                                        020 7067 0700
Richard Hews
James White

Notes to Editors

• Carclo plc is a global supplier of technical plastic components. It is a 
public company whose shares are quoted on the London Stock Exchange.

• 65% of sales are derived from the supply of fine tolerance, injection 
moulded plastic components, which are used in medical, automotive, telecom and 
electronics products. This business, Carclo Technical Plastics, operates 
internationally in a fast growing and dynamic market underpinned by rapid 
technological development.

• 35% of sales are derived from the supply of manufactured systems to the 
automotive and aerospace industries.

• Carclo's strategy is to grow rapidly in low cost manufacturing regions and to 
develop new technologies and products to underpin future growth.



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