Offer for Preference Shares

Debt Free Direct Group PLC
22 December 2003


                          DEBT FREE DIRECT GROUP PLC:

                     OFFER FOR PREFERENCE SHARES/LOAN NOTES


Debt Free Direct Group plc ('the Company') has today made an offer to acquire
all of the preference shares and loan notes issued by its subsidiary Debt Free
Direct Limited ('Debt Free Direct').



Background

Debt Free Direct acquired its business in February 2002 from the former partners
of Lathams, Chartered Accountants.  Part of the consideration comprised the
issue of loan notes aggregating £601,714 which remain outstanding.  In addition,
further payments are due to be made to the former partners of Lathams by way of
redemption of preference shares held by them in the capital of Debt Free Direct
amounting in aggregate to £2,325,033.  These preference shares are redeemable
between 2004 and 2007.



The Offer

The Company has today offered to acquire the preference shares and loan notes
issued by Debt Free Direct ('the Offer').

Under the terms of the Offer the loan notes will be acquired at their par value.
The cash price being offered for the preference shares is the amount due on
redemption less (save in the case of preference shares which are due for
redemption in 2004) a 15% discount to their redemption value plus an additional
6% per annum discount (the effect of which is that the discount will be greater
for preference shares which fall due for redemption later).



Share Alternative

Holders of preference shares/loan notes who accept the Offer may elect to
receive ordinary shares of 1p each in the capital of the Company ('Ordinary
Shares') instead of some or all of the cash consideration under the Offer.
These Ordinary Shares would be issued at a price of 60p per Ordinary Share (the
price at which Ordinary Shares were issued pursuant to the recent placing) and
would be subject to 'lock-in' arrangements for a two year period.  No discount
will be applied to the redemption value of the preference shares/loan notes
exchanged for Ordinary Shares in this way.



Position of the Directors

Andrew Redmond, Paul Latham and John Reynard who are directors of the Company,
are former partners of Lathams and hold in aggregate 233,606 loan notes and
167,016 preference shares and will therefore receive the Offer on the same terms
as other holders of preference shares/loan notes.  Mr Redmond, Mr Latham and Mr
Reynard have irrevocably undertaken to accept the Offer in full and (save in
respect of loan notes held by Mr Reynard in the sum of £28,564 which fall due
for redemption in February 2004) have undertaken to elect to receive the share
alternative in respect of their entire holding of preference shares/loan notes.

The independent directors of the Company (i.e directors other than Mr Redmond,
Mr Latham and Mr Reynard) having consulted with W.H. Ireland, consider that the
terms of the Offer are fair and reasonable insofar as the shareholders of the
Company are concerned.


Effects of the Offer

In view of the irrevocable undertakings given by the directors of the Company
the maximum amount payable by the Company should the Offer be accepted in full
for cash by other holders of preference shares/loan notes is £2,051,434.  If the
Offer does not proceed the aggregate amounts payable by Debt Free Direct upon
redemption of the loan notes and preference shares would be £2,926,747.



Reason for the Offer

When the Company announced on 25 September 2003 that it had successfully placed
6,416,667 Ordinary Shares, the Company indicated that it intended to reduce the
level of gearing in its balance sheet.  Completion of the Offer will help the
Company to achieve this objective.



Conditions of the Offer

The Offer is subject to certain conditions including:-

(a)        the receipt of acceptances in respect of at least 65% in nominal
value of each class of preference shares in Debt Free Direct;

(b)        approval being obtained from the shareholders of the Company in
respect of the acquisition of the preference shares/loan notes held by directors
of the Company (the necessary extraordinary general meeting would be convened if
sufficient acceptances to satisfy the condition in paragraph (a) above are
received).



Should the Offer become unconditional, it is expected to be completed on 15
February 2004.


Enquiries:

Paul Latham
Debt Free Direct Group plc [phone]


David Youngman
WH Ireland Group plc (0161 832 2174)


Sarah Gestetner
Citigate Dewe Rogerson (0207 638 9571)


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