Placing

Intercede Group PLC
29 May 2003


          Intercede Group plc ('Intercede', the 'Company' or 'Group')

                                    Placing


1.    Introduction


Intercede is pleased to announce that it has today raised approximately £1.37
million (£1.25 million net of expenses) in a placing (the 'Placing') of
17,582,672 new ordinary shares (the 'Placing Shares') by Credo Corporate Finance
Limited ('Credo') at a price of 7.8p per share (the 'Placing Price'). The
Placing is conditional on shareholder's approval at an EGM to be held on 1 July
2003 (the 'EGM').


2.    Background to, and reasons for, the Placing


Over the last year the Group has continued to make significant commercial
progress in terms of securing wider market penetration through its channel
partners. At the same time the Directors have been working hard to manage cash
reserves. Action has been taken to reduce overheads during the year to 31 March
2003 and the board is continuing to take appropriate actions to constrain near
term costs and cash outflows. However, in order to provide the Group with
additional flexibility as it moves towards a position of profitability and cash
generation, the Directors have taken the decision to proceed with the Placing.
The decision to raise funds in this way, rather than by some form of pre-emptive
issue to shareholders, has been taken for a variety of reasons, primarily having
regard to the speed and cost effectiveness of the Placing.


3.    Details of the Placing


The Placing is intended to raise approximately £1.37 million (£1.25 million net
of expenses) in aggregate by the issue of 17,582,672 new ordinary shares at the
Placing Price. Whilst the Placing does not represent a formal pre-emptive offer
to Shareholders, Credo have placed 15,595,105 Placing Shares with clients who
are existing shareholders of Intercede. In addition, the following board members
have conditionally agreed to subscribe in the Placing as follows:

Director               Number of        Existing   Shareholding    Percentage of
                  Placing Shares      holding of      following  enlarged issued
                   conditionally ordinary shares  completion of  share capital
                     placed with                  the Placing
                      director

R A Parris (note)      769,232       5,643,000      6,412,232             18.9
A M Walker           1,089,744         158,333      1,248,077              3.7
J S Sikorski            37,821          16,666         54,487              0.2
R Hoggarth              90,770          20,281        111,051              0.3


The Placing is conditional, inter alia, on the passing of the relevant
resolutions at the EGM, and admission to AIM of the Placing Shares. Application
will be made for the Placing Shares to be admitted to AIM, which is expected to
take place on 2 July 2003.


The Placing Price represents a discount of 60 per cent. to the current
mid-market price. The current state of the equity markets has played a
significant role in the size of such discount, however the Directors are of the
view that the Company's need for further funds significantly outweighs the
effect of the dilution caused by the Placing.


4.   Capital Reorganisation


Since the Placing Price is less than the current nominal value of the ordinary
shares, the Directors are required by the Companies Act 1985 to reduce the
nominal value per share in order to complete the Placing. The Directors are
proposing that the Company effect a subdivision of each of its existing ordinary
shares of 25p each into 1 ordinary share of 1p each and 24 deferred shares of 1p
each ('Deferred Shares'). The Deferred Shares so created will have minimal
rights attaching to them and will therefore be effectively worthless. No
application will be made to have the Deferred Shares admitted to AIM nor will
any share certificates be issued in respect of them, nor will CREST accounts of
shareholders be credited in respect of any entitlement to Deferred Shares.


5.   Warrants


In part consideration for services provided to the Company in relation to the
Placing, the Company has granted Credo a warrant to subscribe at the Placing
Price for up to 1,017,100 new ordinary shares at any time up to 29 May 2008 (the
'Credo Warrant'). The Credo Warrant is conditional on shareholders' approval at
the EGM.


6.   Loan stock


In recognition of the dilution to be faced by the holders of existing Intercede
convertible loan stock once the Placing Shares are issued, they will be granted
warrants to subscribe for up to 2,982,919 new ordinary shares at the Placing
Price at any time up to the existing conversion dates of 11 December 2006 and 31
March 2007 (the 'Loan Stock Holders' Warrant'). The Loan Stock Holders' Warrant
is conditional on shareholders' approval at the EGM.


7.   Board change


Jayne Murphy has agreed to resign from the board with effect from 29 May 2003
for corporate governance reasons. She will continue to be employed by the Group
in the same executive capacity.


8.   EGM


The EGM has been convened for the purposes of the Placing. Resolutions will be
proposed so as to empower the Directors to allot the Placing Shares for cash
other than on a pre-emptive basis to shareholders and to enable the Directors to
allot ordinary shares pursuant to exercise of the Credo Warrant and the Loan
Stock Holders' Warrant. A further resolution will be proposed to effect the
Capital Reorganisation and to establish the rights attaching to the Deferred
Shares in the Company's articles of association.


A circular to shareholders will be posted in due course setting out the details
of the Placing and convening the EGM. Copies of this circular will be available
free of charge from the Company's registered office, Lutterworth Hall, St.
Mary's Road, Lutterworth, Leicestershire, LE17 4PS for a period of one month
from the date of posting.


Note


The interest of Richard Parris includes that of his spouse, Jayne Murphy, whose
holding was previously disclosed separately. As the above announcement confirms,
Jayne Murphy has today resigned from the board of Intercede. Jayne Murphy
subscribed for 128,206 of the Placing Shares, which are included within Richard
Parris's subscription above.


ENQUIRIES:

Intercede Group plc                                 Tel.      [phone]
Richard Parris, Chairman & Chief Executive
Andrew Walker, Finance Director







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