Proposed Rights Issue

Teather & Greenwood Holdings PLC
04 February 2003


TEATHER & GREENWOOD HOLDINGS PLC



4 FEBRUARY 2003



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF
AMERICA, DENMARK, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA, MALTA, LATVIA, France,
Switzerland, New Zealand OR THE REPUBLIC OF IRELAND



Teather & Greenwood Holdings plc



Proposed Rights Issue



Highlights



-     Proposed 1 for 1 Rights Issue to raise £2.9 million (net of expenses) to
be used to provide working capital and additional resources for growth.



-     Up to 28,517,249 million New Shares to be offered at a price of 12 pence
per share.



-     Proceeds will be used to strengthen the Company's balance sheet and
provide additional headroom in existing borrowing facilities.



-     Rights Issue fully underwritten by Bridgewell Limited.



-     Cost base brought into line with expected revenues.



Jeremy Delmar-Morgan, Chairman of Teather & Greenwood Holdings plc, commented:



'The Company, together with much of the rest of the market, has experienced a
difficult past two years.  We have addressed these difficulties in two ways.
Firstly, we have reduced our cost base by approximately £10 million on an
annualised basis since April 2002 and secondly, strengthened our balance sheet
by up to £5.5 million with the aggregate net proceeds of the disposal of part of
our investment management department, announced on 15 January 2003, and the
rights issue announced today.



We believe these actions give us the strength to endure the current market
conditions, focus on our small and mid cap service to companies and institutions
and grow our agency sales business'.



This summary should be read in conjunction with the detailed announcement which
follows.



For further information, please contact:



Ken Ford/Nick Stagg
Teather & Greenwood Holdings Plc                            Tel: [phone]



Ben Money-Coutts
Bridgewell Limited                                          Tel: [phone]



Richard Pearson
College Hill                                                Tel: [phone]



Introduction



Teather & Greenwood Holdings plc ('the Company' or 'Teather & Greenwood')
announced today a proposed rights issue of 28,517,249 new ordinary shares ('New
Shares') at 12 pence per New Share on the basis of 1 New Share for each Existing
Share to raise approximately £2.9 million, net of expenses.  The Rights Issue
has been fully underwritten by Bridgewell Limited ('Bridgewell') and is
conditional upon the approval of Shareholders of both the proposed disposal of
part of Teather & Greenwood Investment Management ('TGIM') announced on 15
January 2003 ('Disposal') and the Rights Issue.  This approval, and that
required for the Disposal, will be sought at an extraordinary general meeting of
shareholders to be held on 20 February 2003 and convened by a notice set out in
a circular ('Circular') to shareholders to be posted later today.



Strategy



The strategy of the Company is to leverage off its independence and its strong
and extensive institutional relationships in the areas of corporate finance and
agency sales.  The Directors believe the smaller companies team has been built
on our strength in equity distribution, sales trading and market making and the
recognised quality of research coverage so that Teather & Greenwood is now the
third largest corporate broker in the UK to Smaller Quoted Companies and AIM and
OFEX quoted companies (by number of brokerships).  The agency sales business,
which encompasses equities, fixed income, convertible securities and investment
trusts, constituted about two per cent. of all trades on the London Stock
Exchange in 2002 (and about three per cent. of all small cap trades).



Having realigned the cost base to current market conditions the Directors
believe that, following the strengthening of the balance sheet with the proceeds
of the Disposal and the Rights Issue, the Company will be well placed to
increase the number of corporate clients and its share of market volumes.



Board Changes



It has previously been announced that Derek Boothman intends to retire as a
non-executive director of the Company.  He intends to retire on 30 April 2003.
We are actively seeking a new senior non-executive director to strengthen the
Board and we hope to make an announcement in this regard in due course.



The Rights Issue



Background to and reasons for the Rights Issue



In recent years, the Board has had to restructure the group's activities
significantly in an effort to bring the cost base to a level that is appropriate
to those revenues that the Board believes are achievable for the Group, given
prevailing market conditions.  Losses during this period have had an adverse
effect on the balance sheet.  However, the Board believes that the proceeds of
the Rights Issue (together with the proceeds of the Disposal and the cost
savings arising out of the restructuring) will give the Company the financial
flexibility to endure the current market conditions and take advantage of any
market upturn.



Principal terms and conditions of the Rights Issue



It is proposed to issue 28,517,249 New Shares under the Rights Issue to raise
approximately £2.9 million, after expenses.  The issue price of 12 pence per New
Share represents a 36.8 per cent. discount to the closing middle market price of
19 pence per Share on 31 January 2003, the latest practicable date before the
announcement of the Rights Issue.



Qualifying Shareholders will be offered New Shares at a price of 12 pence per
New Share on the following basis:



                      1 New Share for each Existing Share



held and registered in their name at 14 February 2003 ('the Record Date').



The Rights Issue is conditional, inter alia, upon:

(i)   the passing of the resolutions approving the Disposal set out in the
notice of EGM set out in the Circular;

(ii)  the passing of the resolution increasing the share capital of the Company
and granting the Directors authority to allot Shares set out in the notice of
EGM set out in the Circular;

(iii) an underwriting agreement made between the Company (1), the Directors of
the Company (2) Bridgewell Securities Limited (3) and Bridgewell Limited (4) ('
the Underwriting Agreement') having become unconditional in all respects (save
for the condition relating to Admission) and not having been terminated in
accordance with its terms by not later than 8.00 am on 21 February 2003 (or such
later time and/or date as Bridgewell and Teather & Greenwood may agree, not
being later than 17 March 2003); and

(iv)  Admission having occurred by not later than 8.00am on 21 February 2003 (or
such later time and date as Bridgewell may agree not being later than 17 March
2003).



The Rights Issue is not conditional upon completion of the Disposal.



The New Shares, when issued and fully paid, will rank pari passu in all respects
with the Existing Shares including the right to receive all dividends declared
and paid and all distributions made thereafter.



The Company has arranged for the Rights Issue to be underwritten in order to
provide certainty as to the amount of capital to be raised, given the current
volatile market conditions.  Under the Underwriting Agreement, Bridgewell, as
agent for the Company, has conditionally agreed to procure subscribers for or,
failing which, itself to subscribe as principal for any New Shares not taken up
in the Rights Issue at the issue price of 12 pence per New Share.



Based on the existing issued share capital of the Company, 28,517,249 New Shares
will be offered pursuant to the Rights Issue and this number of New Shares has
been underwritten by Bridgewell.  If, as at the Record Date, further Shares have
been issued pursuant to the exercise of any options under the Employee Share
Schemes, the number of New Shares offered pursuant to the Rights Issue could
rise.  However, this is not expected to be the case, therefore, no additional
New Shares have been underwritten.



We expect Admission to occur and dealings to commence in the nil paid New Shares
on 21 February 2003 and the latest time and date for acceptance and payment in
full under the Rights Issue to be 10.30am on 17 March 2003.



The Circular, providing further details of the Rights Issue, including the terms
and conditions on which it is being made, and convening an EGM will be published
and posted to shareholders today.  Copies of the Circular can also be obtained
from Bridgewell, Old Change House, 128 Queen Victoria Street, London EC4V 4BJ.



Intentions of Directors



The Executive Directors have undertaken to take up their full entitlements in
respect of 2,008,402 Existing Shares and certain non-executive Directors have
stated their intention in respect of 2,850,676 Existing Shares to subscribe for
such number of New Shares as can be funded by the net proceeds of sale of the
balance of their remaining entitlements.  Details of each of the Directors'
resultant holdings will be set out in the Circular.



Current trading and prospects



The Interim Results were announced on 16 January 2003 and are set out in full in
the Circular to be sent to Shareholders.



Financial Highlights



Turnover for the Group was £11.3 million (six months to 31 October 2001: £19.8
million) producing an operating loss of £2.4 million before re-organisation
costs (six months to 31 October 2001: an operating profit of £0.4 million). Loss
per share was 9.5p (six months to 31 October 2001: earnings per share 2.7p).
The balance sheet shows net assets of £10.2 million (2002: £12.8m) equivalent to
35.8p per share.



COST REALIGNMENT



The Company has made significant cost reductions to align the cost base with
current market conditions.  Since April 2002 headcount has been reduced from 235
to 184, resulting in a saving which the Directors believe to equal £8.3 million
per annum.  This, together with savings in other areas of the Group including IT
and data provision, has led to cost savings which the Directors believe to be in
excess of £10 million.



Outlook



There are no signs of any upturn in the areas in which the Group operates, other
than the fixed interest desk.  The stock markets have fallen for almost three
years but the Group has now undertaken the necessary restructuring to cope with
these conditions and will continue to address its cost base as appropriate.  At
all times the Company's capital has remained significantly in excess of
regulatory capital requirements and the balance sheet will be strengthened
following completion of the Disposal and the Rights Issue.  The Board is
confident that the Group has the potential to grow in our chosen areas.



In recent weeks, certain competitors have withdrawn from the small to mid-cap
broking arena, a trend which the Board believes is likely to continue.  The
Board believes that this will offer the Company the opportunity to recruit
quality personnel at cost efficient levels and provide the opportunity to grow
our corporate client base.



Overseas shareholders



Shareholders who have registered addresses in United States of America, Canada,
Japan, Australia, Malta, Latvia, France, Switzerland, New Zealand, South Africa,
Denmark or the Republic of Ireland will not be sent the Circular.



Extraordinary General Meeting



An extraordinary general meeting of the Company will be held at the offices of
Teather & Greenwood at Beaufort House, 15 St Botolph Street, London EC3A 7QR at
10.00am on 20 February 2003, at which the resolutions necessary to enable the
Rights Issue and the Disposal to proceed will be put to Shareholders for
approval.



Expected timetable of principal events


                                                                                                           2003
Record Date for the Rights Issue                                                                    14 February


Latest time and date for receipt of Forms of Proxy                                       10.00am on 18 February


Extraordinary General Meeting                                                            10.00am on 20 February


Despatch of Provisional Allotment Letters                                                           20 February

(to Qualifying non-CREST Shareholders only)


Dealings in New Shares, nil paid, commence on the                                         8.00am on 21 February

London Stock Exchange


Existing Shares marked 'ex' by London Stock Exchange                                      8.00am on 21 February


Nil Paid Rights and Fully Paid                                                            8.00am on 21 February

Rights enabled in CREST as soon as practicable after


Recommended latest time for requesting withdrawal of Nil Paid Rights or Fully                4.30pm on 10 March
Paid Rights from CREST


Latest time for depositing renounced Provisional Allotment Letters, Nil paid,                3.00pm on 12 March
into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a
CREST stock account


Latest time and date for splitting Provisional Allotment Letters, nil paid or                3.00pm on 13 March
fully paid


Latest time and date for acceptance, payment in full and registration of                    10.30am on 17 March
renunciation of Provisional Allotment Letters


Dealings in New Shares, fully paid, commence on the London Stock Exchange                    8.00am on 18 March


New Shares credited to CREST stock accounts                                                         by 18 March


Expected dispatch of definitive share certificates for New Shares                                   by 25 March


Expected completion of the Disposal                                                                   by 31 May



Notes

(i)   The dates set out in the expected timetable of principal events above and
to be mentioned in the Circular and in the Provisional Allotment Letters may be
adjusted by Teather & Greenwood, in which event details of the new dates will be
notified to the UK Listing Authority and to the London Stock Exchange and, where
appropriate, to shareholders.



(ii)  References above are to London time unless otherwise stated.



This announcement does not constitute or form part of, and should not be
construed as, an offer for sale or subscription of, or solicitation of an offer
to buy or subscribe for, any securities of Teather & Greenwood Holdings plc nor
should it, or any part of it, form the basis of, or be relied on in connection
with, any contract or commitment whatsoever. Any decision in connection with the
proposed Rights Issue should be made solely on the basis of the information
contained in the Circular.



This announcement is not for publication or distribution or release, directly or
indirectly, in the United States of America, Canada, Japan, Australia, South
Africa, Malta, Latvia, France, Switzerland, New Zealand or the Republic of
Ireland. This announcement does not constitute or form any part of any offer to
sell, issue or to acquire any securities of the Company in the United States of
America, Denmark, Canada, Japan, Australia, South Africa, Malta, Latvia, France,
Switzerland, New Zealand, or the Republic of Ireland or in any other
jurisdiction. Neither the Company's New Shares nor the Provisional Allotment
Letters are being registered under the US Securities Act of 1933, as amended
(the 'Securities Act') and they may not be offered or sold in the United States
(as such term is defined in Regulation S under the Securities Act) at any time
except pursuant to the terms of an applicable exemption under the Securities Act
and applicable securities laws of the states of the United States.



Bridgewell and Smith & Williamson Corporate Finance Limited are acting for the
Company, and no one else, in connection with the Rights Issue and will not be
responsible to any other person for providing the protections afforded to their
respective clients or for providing advice in relation to the proposed Rights
Issue.



Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and, by their nature, are
subject to a number of risks and uncertainties that could cause actual results
and performance to differ materially from any expected future results or
performance, expressed or implied by the forward-looking statement. The
information and opinions contained in this announcement are subject to change
without notice and Teather & Greenwood Holdings plc assumes no responsibility or
obligation to update publicly or revise any of the forward-looking statements
contained herein.



Terms in this announcement shall bear the same meaning, unless the context
otherwise requires, as defined in the Circular, published later today in respect
of the Rights Issue.



END


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