Winding up proposals

Second Advance Value Realisation Company Limited

Proposal for voluntary winding up

The Company has today posted a circular to Ordinary Shareholders
convening an Extraordinary General Meeting, to be held at 10.30 a.m.
on 22 June 2005, at which Ordinary Shareholders will be asked to
approve a resolution to wind up the Company and to appoint Jeremy
Simon Spratt and Finbarr O'Connell, both of KPMG LLP, as the
Liquidators to liquidate the Company and settle the Company's
liabilities

Background

The Company was launched in April 2003 with the objective of
providing value and liquidity for shareholders from a portfolio of
investments which were acquired in exchange for 13,745,997 Ordinary
Shares and 32,073,993 Preference Shares, in each case issued at £1
per share. The Company acquired 138 investments with a mid-market
value at acquisition of £45.8 million. Since its launch the Company
has realised its investments and progressively returned the proceeds
to Shareholders through purchases (including the tender offer last
June), redemptions of shares and dividends. The redemption or
purchase and cancellation of the Preference Shares was completed on
12 January 2004. In aggregate the Company has returned £53.8 million
to Shareholders since launch. The Company has one remaining
investment which is fully written down. The Directors expect that
this investment will be disposed of before the date of the
Extraordinary General Meeting. At 20 May 2005 (the latest practicable
date prior to the publication of this document) the Company had net
assets of £5.8 million (comprising cash and UK Treasury Bills less
provisions for the remaining expenses of the Company and liquidation
costs). This is equivalent to 218.93p per Ordinary Share.

The aggregate of the amount returned to Shareholders and the latest
net asset value is £59.6 million. This is equivalent to 130.1 per
cent. of the initial gross assets of the Company.

At the time of the Company's launch the Directors stated that, at the
annual general meeting to be held in 2006, Shareholders would be
invited to consider the future of the Company. In June 2004 the
Directors announced new management arrangements to incentivise the
Progressive Value Management Limited, the Manager, to liquidate the
portfolio by 30 June 2005. The Directors consider that the most
effective way of returning the remaining net assets of the Company to
Shareholders is for the Company to be wound up. The Directors
recommend that Ordinary Shareholders vote in favour of the Proposal
to put the Company into liquidation.

Voluntary winding up

The liquidation of the Company, which will be a solvent liquidation
in which all creditors will be paid in full, will involve the passing
of the Resolution to approve the liquidation of the Company and to
appoint the Liquidators. If the Resolution is passed, the appointment
of the Liquidators will become effective immediately upon the filing
of the Resolution with the Greffier in Guernsey. At this point, the
powers of the Directors would cease and the Liquidators would assume
responsibility for the liquidation of the Company, including the
payment of fees, costs and expenses, the discharging of the
liabilities of the Company and the distribution of the remaining
assets.

Since 23 June 2004 the Manager's basic fee has been reduced from 1
per cent. per annum of net assets to 0.5 per cent. If the Proposal is
approved the Manager will be entitled under the terms of the
management arrangements to an early termination fee of £285,000 plus
VAT, to a basic fee in respect of the period to 30 September 2005 and
to an equity appreciation fee estimated to amount to £359,000 plus
VAT based on the net asset value at 20 May 2005.  The Directors have
served notice to terminate all material contracts. The net asset
value of £5.8 million as at 20 May 2005 is stated after provision for
costs (including the fees due to the Manager described above) arising
under such contracts and in respect of their termination.

The Directors propose that Jeremy Simon Spratt and Finbarr O'Connell,
both of KPMG LLP, be appointed as Liquidators. They have agreed to
accept the appointments in the event that the Resolution is passed.

Estimated net proceeds of the liquidation

As stated above, the net asset value per Ordinary Share on 20 May
2005 was 218.93p. This is calculated after providing for the
estimated net expenses to be incurred by the Company prior to
liquidation and for the estimated costs of the liquidation.
Accordingly, if the Company had been wound up on that day, an
Ordinary Shareholder could have expected to receive a distribution of
218.93p per Ordinary Share, subject to any adjustments made by the
Liquidators in confirming the assets and liabilities of the Company.

The Liquidators will begin the process of settling the Company's
liabilities as soon as practicable after the Resolution has been
passed. Subject to the passing of the Resolution, it is expected that
the Liquidators will make a distribution equal to the net assets once
all the Company's affairs, including the tax affairs, have been
settled and all its liabilities paid. It is expected that such
distribution will be made by 30 September 2005.

As stated in the interim report for the six months ended 30 September
2004, the Directors are aware of the legal test case that JP Morgan
Fleming Claverhouse Investment Trust plc has initiated in conjunction
with the AITC against HM Customs & Excise and are aware of the
potential consequences of the case.  A contingent gain exists in the
form of a possible VAT repayment from the Company's investment
manager.  At the present time there is no certainty regarding the
outcome of the case. The total VAT that the Company has paid and will
pay on investment management fees from the Company's launch to the
appointment of the Liquidators is estimated to be £494,000. It is not
clear how much of this sum, if any, may become recoverable or when
any amount would be received.  Therefore the Company has not
recognised any such gain in its accounts nor is any amount reflected
in the net asset value described above.

Under the terms of appointment the Liquidators will be paid at their
normal rates until all surplus funds (other than any potential
amounts from the recovery of VAT) have been realised and distributed
to Shareholders. After this point the Liquidators have undertaken to
keep the liquidation open until the VAT issue is resolved (which
could take several years) and will be entitled only to a fee equal to
20 per cent. of the amount of VAT recovered, if any.

Dealings and Settlement

It is expected that the register of Ordinary Shareholders will close
for transfers of Ordinary Shares at the start of business on 22 June
2005. Transfers lodged with the UK Registration Agent before this
time, accompanied by documents of title, will be registered in the
normal way. Transfers received after that time will be returned to
the person lodging them and, if the Proposal is sanctioned by
Ordinary Shareholders, the original holder will receive any proceeds
from distributions made by the Liquidators.

The Company has made an application to the UK Listing Authority and
the London Stock Exchange for the listing of Ordinary Shares on the
Official List and dealings on the London Stock Exchange to be
cancelled, subject to approval of the Proposal, with effect from 30
June 2005. It is expected that the listing of Ordinary Shares on the
Official List and dealings on the London Stock Exchange will be
suspended at the start of business on 22 June 2005 and, provided the
Resolution is passed, will be cancelled with effect from the start of
business on 30 June 2005. The last date for dealings on the London
Stock Exchange on a normal settlement basis is expected to be 16 June
2005.


Expected timetable


                                                                 2005
Last day for dealings on the London Stock
Exchange on a normal settlement basis                         16 June

Last time and date for receipt of Forms of 10.30 a.m. on
Proxy                                                         20 June

Dealings in Ordinary Shares suspended      7.30 a.m. on       22 June
pending the result of the Extraordinary
General Meeting

Register closes                                               22 June

Extraordinary General Meeting of the       10.30 a.m. on
Company                                                       22 June

Proposed cancellation of listing on the                       30 June
Official List and dealings on the London
Stock Exchange

Distribution to Ordinary Shareholders           By       30 September



For further information please contact:


Robert Legget/Simon Toynbee          020 7566 5550
Progressive Value Management Limited

John Webb/Gary Pinkerton             020 7490 3788
Marshall Securities Limited




23 May 2005

Note: Capitalised words have the same meanings as in the circular.




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