Statement re: Chapelthorpe

Second Advance Value Realisation Co
28 February 2005


PRESS RELEASE BY

SECOND ADVANCE VALUE REALISATION COMPANY LIMITED

AND

NORTH ATLANTIC VALUE LLP

REGARDING

CHAPELTHORPE plc


On 2 February 2005, Second Advance Value Realisation Company Limited and funds
managed on behalf of discretionary investment management clients by North
Atlantic Value LLP ('the Requisitionists'), who together hold 10.8 per cent of
the issued ordinary share capital of Chapelthorpe plc ('Chapelthorpe' or 'the
Company'), requisitioned an Extraordinary General Meeting ('EGM') of
Chapelthorpe for the purpose of proposing resolutions which, if passed by
shareholders, would result in a major restructuring of the Board of Directors of
the Company. The Requisitionists also submitted to the Company for circulation
an accompanying Statement for Shareholders.

On 23 February the Company responded to the requisition of 2 February, and
issued a Notice convening an EGM to be held on 18 March 2005.

The Statement for Shareholders of 2 February, which was not attached to the
Company RNS release of 23 February, is set out below and ordinary shareholders
should receive this from the Company along with the Notice of EGM. The length of
the Statement for Shareholders of 2 February was restricted to 1,000 words as
required by law and was written before the most recent profits warning issued by
the Company on 8 February 2005.

The Requisitionists will issue a detailed response to the Company's letter of 23
February in due course.


Contact:
Robert Legget 020 7566 5552
Progressive Value Management Limited
Managers of
Second Advance Value Realisation Company Limited


Statement to the Holders of Ordinary Shares in Chapelthorpe plc


1 FEBRUARY 2005


Dear Shareholder,

An opportunity to generate value and liquidity for Shareholders

We are writing as representatives of two large shareholding groups in
Chapelthorpe PLC ('Chapelthorpe' or 'the Company') to seek your support to
effect changes to the Board of the Company, at the forthcoming EGM, in order to
prevent the further destruction of shareholder value and to implement a clear
strategy for return of value to Ordinary shareholders.
     
1.   Destruction of Shareholder Value

In 1997 Messrs. Leckie and Thompson were appointed as Group Chief Executive and
Executive Director respectively. Since then:

The share price has fallen from 38.25p to 20.0p, a decline of 48% whilst the
FTSE Fledgling Index has risen by 152 %;

Earnings per Ordinary Share have dropped by a third and dividends have collapsed
by over 60%;

Shareholders' funds have fallen by more than a third;

Cumulative post tax losses have exceeded £26 million;

More than £31 million has been spent on acquisitions without tangible benefit to
shareholders; and

Despite this record, Messrs. Leckie and Thompson have received total emoluments
and pension contributions of over £5 million.

We believe it is apparent that the Board has delivered poor operating results,
wasted money on acquisitions, been slow to re-act to market developments and
been excessively paid.
     
2.   Outlook Under the Current Board

In September 2004 the Board disclosed a bad debt provision of £1.8 million and a
major asset write-down provision (£5.4 million). The Company's broker is
forecasting a £6.3 million pre-tax loss for the current year.

In December 2004 the Board announced its intention to focus on man-made fibres
and release cash from the Umbrella Frames division, which 'does not fit into
this new direction'. The Board stated that it intended to 'invest in, and grow,
business areas where our skills are demonstrating the capability to provide good
margins and growth over the longer term'.

Given the dismal past performance, we do not believe that the Board will deliver
real shareholder value. We are concerned that acquisitions may be under
consideration and this could further erode shareholder value.
     
3.   A Clear Alternative Strategy

Our strategy is to maximise value and return it to Ordinary shareholders. We
intend to achieve this by the appointment of a highly experienced team led by
Ian Duncan to enhance Chapelthorpe's profitability and efficiently dispose of
the Company's businesses within two years.

Our proposed resolutions, if passed, will remove Messrs. Leckie, Reeve, Standen
and Thompson as directors and replace them with a team consisting of:

Ian Duncan aged 57, if appointed would become Executive Chairman. He was until
recently an Operating Partner of Compass Partners International ('Compass'). He
was formerly Chief Financial Officer for fifteen years and Deputy Chairman of
Tomkins Plc.

Panos Loizou aged 40, if appointed would become Chief Operating Officer. He was
an Operating Principal of Compass and held senior executive positions at GE
Lighting, PepsiCo and OC&C Strategy Consultants.

Rory Macnamara aged 50, if appointed would become non-executive Deputy Chairman.
He was a senior corporate financier with Deutsche Bank and Lehman Brothers,
specialising in mergers and acquisitions. He has recently been involved as a
consultant to the Board of Mentmore plc in the period prior to its acquisition
by Safestore for approximately £209 million.

Stuart Forshaw aged 51, if appointed would become a non-executive director. He
has over 20 years experience in investment analysis, corporate broking and fund
management, most recently with Tilney Investment Management.

The new directors, if all the resolutions at the forthcoming EGM are passed,
will represent a majority of the Board.
     
4.   Terms of Appointment of the New Executive Directors

The proposed terms of Messrs Duncan and Loizou's appointment are designed to
reduce Chapelthorpe's fixed costs and to provide incentive for them to return
value effectively to Ordinary shareholders in the short term. It is proposed
that Dimitra Capital Partners LLP ('Dimitra'), a partnership controlled by
Messrs Duncan and Loizou, would receive a fee of £200,000 per annum in respect
of their services for a minimum term of six months subject to three months'
notice to expire at minimum term end or thereafter. Whilst Dimitra remains under
contract, it would receive a realisation fee of 1% of any capital (including
special dividends) returned to Ordinary shareholders within the first twelve
calendar months following the appointment of the new Board and 0.5% of any
capital (including special dividends) returned to Ordinary shareholders within
the second twelve calendar months. In addition Dimitra would receive a fee
equivalent to 10% of all monies returned to Ordinary shareholders (and/or value
retained within the Company) at contract termination (but excluding normal
dividends) in excess of 20 pence per share, the closing mid-market share price
on the day before notification to the Company of the issue of the EGM
requisition. Messrs Duncan and Loizou (and immediate family) have invested
£373,248 in the Company's Ordinary Shares, representing approximately 1% of the
total equity share capital, at an average price of 17 pence per share.

We urge you to VOTE IN FAVOUR OF ALL THE ORDINARY RESOLUTIONS effecting the
necessary Board changes at the requisitioned Extraordinary General Meeting. The
requisitionists intend to vote in favour in respect of the 22,110,000 Ordinary
Shares managed by us, representing 10.8% of the total equity share capital. We
believe that approval of these resolutions, and implementation of the strategy
outlined in this statement, will enhance both value and liquidity for all
holders of the Company's Ordinary Shares.


Yours faithfully


Robert W L Legget                                    Charles D R C Groves
Duly authorised and on behalf of                     Duly authorised and on
                                                     behalf of
Progressive Value Management Limited                 North Atlantic Value LLP
Manager,
Second Advance Value Realisation
Company Limited


Details of beneficial ownership of shares held by requisitionists referred to in
letter dated 1 February 2005.


Shareholders(beneficial)                                             No. of
                                                            Ordinary Shares

SAVR                                                             8,000,000

Managed by North Atlantic Value LLP
Oryx International Growth Fund                                  4,750,000
Trident Holdings                                                3,677,300
Trident High Tor                                                  695,100
Trident North Atlantic Fund                                     4,987,600

Total                                                          22,110,000



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