Issue of Capital Notes

Guinness Peat Group PLC
24 July 2006

                      Guinness Peat Group plc Announcement

               Proposed Issue of Capital Notes by GPG Finance plc

Guinness Peat Group plc (GPG) announces a proposed issue of capital notes
(Offer) to New Zealand investors by its subsidiary GPG Finance plc (GPG
Finance). The proposed Offer will be for an aggregate principal amount of NZ$250
million and GPG Finance will have the ability to accept up to a further NZ$100
million of over-subscriptions. The Offer will be made only to New Zealand
resident investors and is conditional on requisite resolutions being passed at
GPG's shareholders' meeting on 31 August 2006.

The Offer will consist of an Exchange Offer for holders, as at 2 August 2006, of
existing capital notes issued by GPG Finance in 2001 (Existing 2001 Noteholders)
and a General Offer available only by firm allocation.

The Exchange Offer will allow Existing 2001 Noteholders to exchange their 2001
capital notes for new capital notes issued under the Offer. It is proposed that
the Exchange Offer will open on 8 August 2006 and will close on 29 August 2006.
The General Offer will open on 31 August 2006 and will close on 29 September
2006.  GPG Finance will have the right to extend or otherwise vary the opening
dates and the closing dates.

To facilitate the Exchange Offer, New Zealand Exchange Limited (NZX) has, at the
request of GPG Finance, agreed to impose a trading halt in respect of the 2001
capital notes from 31 July 2006 until close of business on 1 September 2006.
Trading in 2001 capital notes which are not exchanged under the Exchange Offer
will recommence on 4 September 2006.  GPG (UK) Holdings plc will be exercising
its option, under condition 4.5 of the conditions applicable to the 2001 capital
notes, to purchase for cash on 15 November 2006 all 2001 capital notes which are
not exchanged.

Chairman of GPG, Sir Ron Brierley said, "The new capital note issue will be a
useful complement to GPG's existing capital resources when considering
prospective investment opportunities.  GPG is presently considering a range of
investment opportunities within its existing portfolio and in the broader
Australian, New Zealand and UK markets."

The new issue will have a similar structure to GPG's previous two issues of
capital notes, undertaken in 2001 and 2003.  GPG's previous issues of capital
notes were strongly sought after by investors.  "The issue will provide New
Zealand investors another opportunity to invest in GPG following on from the
previous highly successful capital note issues" Sir Ron said.

Goldman Sachs JBWere (NZ) Limited is the Lead Manager and Organising
Participant.



Contacts:



Tony Gibbs
Director
New Zealand                       Tel: + 64 9 379 8888



Richard Russell
Company Secretary
United Kingdom                    Tel: + 44 207 484 3370



Andrew Barclay
Goldman Sachs JB Were
New Zealand                       Tel: + 64 9 357 3200



Dated: 24 July 2006



Under the terms of the Offer, no offer or invitation is made in any jurisdiction
other than New Zealand.  This announcement is directed only at persons in New
Zealand.  Any person not resident in New Zealand should not rely or act upon
this announcement or any of its contents.  Any person not resident in New
Zealand who receives the Offer Document should not rely or act upon the Offer
made in that document.  GPG Finance has reserved the right to reject any
subscription received in respect of the capital notes other than from within New
Zealand or which GPG Finance or any agent of GPG Finance believes may originate
from outside New Zealand.




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