Re Joint Venture

Pathfinder Properties PLC
30 May 2002



30th May 2002


                               ANNOUNCEMENT



                    Pathfinder Properties PLC ('Properties')


 Reorganisation of joint venture interests and settlement of litigation between

     Pathfinder Recovery 1 PLC ('Recovery 1') and Pathfinder Recovery 2 PLC
                                 ('Recovery 2')


The Board of Properties announces that agreement has been reached between
Recovery 1, a 95% owned subsidiary of Properties, and Recovery 2 in respect of
joint ventures between those companies and that a settlement has been agreed
between Recovery 1 and Recovery 2 in respect of the claims made by Recovery 2
against Recovery 1.



The effect of this is a clean break between the Properties Group and Recovery 2
whereby each acquire, or have the right to acquire, certain of the previously
jointly-owned ventures.  The ongoing relationship between the companies becomes
solely that of debtor/creditor.



John Parry, Chairman of Properties, commented:



'We are pleased that this matter has now been settled, after an arduous and
difficult process of negotiation, and that the integration process of the
Properties Group, which started with the acquisition of Recovery 1 is, to all
intents and purposes complete.  We can now move ahead with maximising the value
of our projects to the overall benefit of our shareholders.'



The principal effects of the agreement are as follows:


       Pathfinder Recovery Ventures Limited ('PRVL'), previously owned 50% each
by Recovery 1 and Recovery 2, becomes a wholly owned subsidiary of Recovery 1,
which is itself a 95% owned subsidiary of Properties

       The Properties Group increases its interest in its major development
sites at Merchant Village, Glasgow, from 65% to 80% for a consideration of
£475,000

       The Properties Group increases its interest in its major development
sites at River Quay, Manchester, from 65% to 80% for a consideration of £475,000

       PRVL disposes of its interest in its site at Tib Street, Manchester

       All litigation ceases

Enquiries:



Malcolm Bacchus - Pathfinder Properties PLC        020 7736 9669

Marc Green - Pathfinder Properties PLC             020 7736 9669



Robert Lo - Nabarro Wells & Co. Limited            020 7710 7407

David Nabarro - Nabarro Wells & Co. Limited        020 7710 7409




Notes



Background

Recovery 1 and Recovery 2 have been carrying out jointly owned property
developments through PRVL since May 2000.  Recovery 1 and Recovery 2 also each
held 15% interests in Pathfinder (Scotland) Limited and Pathfinder (River Quay)
Limited, respectively the development companies for projects at Merchant
Village, Glasgow and River Quay, Manchester.  A 50% interest in both Pathfinder
(Scotland) Limited and Pathfinder (River Quay) Limited is held directly by
Properties.  In June 2001, Properties acquired a controlling interest in
Recovery 1 thereby acquiring controlling interests in the Merchant Village and
River Quay developments and a 50% interest in PRVL.



Following this acquisition Recovery 2 commenced litigation against PRVL with a
view to forcing an early conclusion to PRVL's joint venture operations.



Other terms of the agreement

1.      PRVL repays £4.2m of a £4.609m loan to Recovery 2 as a
result of a settlement on inter-company debt on the transfer of Pathfinder (Tib
Street) Limited.  The balance to be repaid within two years.

2.      Recovery 1 and Properties will procure that Pathfinder
(Scotland) Limited and Pathfinder (River Quay) Limited will fully discharge
their remaining indebtedness (including purchase consideration outstanding) to
Recovery 2 amounting to £3.554 million, within two years of the settlement.
Recovery 1 acquires Recovery 2's 15% holdings in Pathfinder (Scotland) Limited
and Pathfinder (River Quay) Limited on final discharge of the outstanding
indebtedness.  Any distributions made to Recovery 2 by way of dividend or
equivalent during the above period will be treated as a reduction in the loans
outstanding to Recovery 2 and not as a distribution of value.

3.      Interest is payable on all outstanding indebtedness or
deferred consideration at 5.5% p.a.


4.      The obligations of Recovery 1 and PRVL will be guaranteed by Properties.






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