Disposal of Milmega Limited

Elektron PLC
04 February 2004




FOR IMMEDIATE RELEASE                                         4 February 2004

                                  ELEKTRON PLC

                          Disposal of Milmega Limited

Elektron Plc (the 'Company' or 'Elektron'), the AIM quoted components and
electronics group, announces that it has disposed of Milmega Limited ('Milmega')
to Frameflair Limited ('Frameflair'), a newly formed company that is partly
owned by the management of Milmega, for an initial gross consideration of
£1,003,500 free of borrowings and inter-company indebtedness subject to
adjustment as described below.

Milmega

Milmega operates from a 6,000 square foot leasehold facility on the Isle of
Wight employing 22 staff. The Company designs and assembles high specification
amplifiers for the telecommunications, defence, physics research and
electro-magnetic testing sectors. Milmega reported sales and a loss before tax
of £2.0 million and £107,000 respectively in its last audited accounts to 31
January 2003. In the eleven months to 31 December 2003, Milmega management
accounts show a loss before tax of £24,000 on sales of £1.8 million. Audited net
assets as at 31 January 2003 amounted to £538,000. As at 31 December 2003
Milmega management accounts show un-audited net assets of £772,000 excluding
inter-company indebtedness and borrowings.

Consideration

The initial gross consideration payable to Elektron is £1,003,500 less £18,000
in respect of hire purchase liabilities to be retained by Milmega on completion.
£735,500 was paid in cash on completion and the balance of £250,000 has been
satisfied by the issue of five-year redeemable secured loan notes (the 'Loan
Notes').

The final consideration will be determined by the net asset value recorded in
the completion accounts to be prepared as at 31 January 2004. The initial
consideration will be adjusted pound for pound in respect of any difference
between net asset value recorded in the completion accounts and £764,000, save
that any adjustment upwards or downwards to the initial consideration is capped
at £38,200.

The Loan Notes are repayable in tranches. £50,000 is repayable 12 months from
completion, £100,000 is repayable 24 months from completion and the balance of
£100,000 is repayable 36 months from completion. The Loan Notes bear interest at
base lending rate plus 2 per cent per annum payable quarterly in arrears.

At the option of Frameflair repayment of the Loan Notes may be deferred
providing certain net asset conditions are met but not beyond 31 January 2009.
In the event of deferral, interest is payable at base lending rate plus 10% per
annum payable quarterly in arrears. The Loan Notes are secured by a second
charge over the assets of Milmega and Frameflair.

The proceeds of the disposal will be used by the Company to reduce borrowings
and provide additional working capital. The profit or loss impact on Elektron
relating to the disposal of Milmega is not expected to be material.

Related party issues

As Frameflair is partly owned by one of the Directors of Milmega, the disposal
is a related party transaction for the purposes of the AIM Rules. The Directors
of Elektron consider, having consulted with its nominated adviser Beaumont
Cornish Limited, that the terms of the transaction are fair and reasonable
insofar as its shareholders are concerned.

Reasons for the disposal

Following a strategic review, the Board has decided that the business of Milmega
is no longer a core activity.



For further information please contact:
Adrian Girling                                              Christopher Leigh
Executive Chairman                                          Finance Director
Elektron Plc                                                Elektron Plc
Tel: [phone]                                          Tel: [phone]

Michael Cornish
Beaumont Cornish Limited
Tel: [phone]



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