Posting of Circular

Sarantel Group PLC
28 June 2007

Posting of Circular to Shareholders



Introduction



Further to the announcements on the 18 May 2007 and 6 June 2007 whereby the
Company announced that it was proposing to raise £2,130,000, before expenses by
means of a proposed placing ('Placing'), the Company confirms that a circular 
('Circular') has today been posted to shareholders.



The Placing is conditional inter alia, upon shareholders passing the resolution
at the Extraordinary General Meeting of the Company to approve an increase in
the authorised share capital of the Company and to grant to the Directors
authority to allot shares and power to disapply statutory pre-emption rights on
allotment (the 'Resolution'), and upon the placing shares to be issued pursuant
to the Placing being admitted to trading on AIM.  The Resolution is contained in
the notice of EGM within the Circular.



The purpose of the Circular is to explain the background to and reasons for the
Placing and why the Directors believe the Placing is in the best interests of
Sarantel and its shareholders as a whole, and to recommend that shareholders
vote in favour of the Resolution.



Background to and reasons for the Placing

Following admission of the entire issued share capital of the Company to trading
on AIM in March 2005, the Company set out to implement its strategy and the
funds raised at that time have been used mainly to:

•         expand production capacity

•         improve production processes and reduce manufacturing costs

•         develop and launch new antennas

•         develop new business, and

•         fund working capital.

Since floating on AIM, the Company has successfully launched two new products,
the satellite radio antenna and the second generation GPS antenna. The satellite
radio antenna gave rise to the largest single order for antennas ever received
by Sarantel, but follow-on orders were disappointing due to what the Directors
believe was the poor commercial success to date of the portable satellite radio
device.  In GPS applications, the Company has announced a total of 28 design
wins including successes with HP, TomTom and LG Telecom. However none of these
proved to be high volume, despite initial indications. Recently, the Company has
received a number of design wins in what the Directors consider to be an
interesting and relatively new sector, the GPS tracker.  In that sector the
Company's GPS antenna provides in the Directors' opinion, the most viable
solution for devices that are small, hand-portable and highly integrated with
GSM transceivers.

The personal navigation device market ('PND') has grown dramatically since 2005
but the first generation of dash-mounted PNDs were never intended for hand
portable use. These dash-mounted devices are relatively large in size and have
access to a power source which enables the GPS chipset to use additional power
to mitigate poor antenna performance. However, hand portable GPS applications
outside of PNDs continue to proliferate and the Directors remain confident that
the Company's technology is well positioned to capitalize on the growth in these
particular market segments. Additionally, the Company is in discussion with a
number of potential customers who are looking at integrating the Company's
antenna technology into high performance devices in outside markets of GPS such
as WiMax and satellite communications. These nascent markets are attractive to
Sarantel as they require a high performance antenna technology. The location
based services market is starting to emerge and this is driving the integration
of GPS in mobile phones. The Company's technology is very well positioned to
provide a high quality solution to this market although the Board does not
expect mass adoption to come for some time yet.

The Company is also developing its third generation GPS antenna for launch in
the spring of 2008. This antenna is small and is specifically targeted at the
hand portable GPS market and should enable high performance GPS in products
which are less than 10mm thick. Initial samples have already been delivered to a
lead customer and the Company has received very good feedback.

In order to help the Company consider alternative financing options and
implement an optimal strategy to realise the best value for shareholders, the
Board has appointed Needham and Company LLC, a US-based investment bank, to
advise it.

At the end of May 2007, the Group's free cash balances (total cash less amounts
withheld to secure leasing commitments) were £0.8m. The Group's average monthly
cash burn rate since 31 March 2007 was £0.4m and consequently the Company needs
to raise additional funds for its immediate working capital requirements.

Current trading

The Group's interim results for the six months to 31st March 2007 were released
on 19 June 2007 and a copy of the text of the announcement of these results is
provided in Part II of the Circular. Shareholders are referred to the outlook
statement contained therein.

The Company is engaged with a number of potential high-volume new customers in
the GPS navigation market. It is however very difficult to predict if and when
these opportunities will materialise. In order to ensure that the Company is as
well positioned as reasonably possible to capitalise on future high volume GPS,
we have adjusted the Company's immediate focus. Therefore, we are working with a
number of companies which are developing new applications which have the
potential to reach high volumes of sales (in the fields of WiMax and satellite
communications). In addition we are working with companies that could provide
revenue generating short term contracts. In these markets, customers place a
sufficiently high value on the performance benefits our technology provides and
may be willing to fund development projects.

In parallel, we are reducing our manpower and cost base to align better with our
present level of activity.

We continue to make very good progress in reducing our production costs and
achieved a 38 per cent. cost reduction with our second generation GPS antenna.
We are working to achieve a further significant break-through in both material
cost and improved manufacturing processes with our third generation GPS antenna.

The Placing



The Company is proposing to raise £2,130,000 (before expenses) by way of a
conditional placing by Ambrian Partners of 21,300,000 new 'A' Ordinary Shares at
10p per share with certain existing shareholders on a non pre-emptive basis, in
order to avoid the significant cost to the Company, which would arise, were the
Company to make an open offer to all shareholders to subscribe for Ordinary
Shares.  The Placing Shares (if subscribed for in full) will, on issue,
represent approximately 27.9 per cent. of the Enlarged Share Capital.



The Placing Shares will, when issued and fully paid, rank pari passu in all
respects with the existing issued 'A' Ordinary Shares, including the right to
receive all dividends and other distributions thereafter declared, made or paid
on the 'A' Ordinary Shares.

The Takeover Code (the 'Code')

In the Company's announcement of 6 June 2007 regarding the Placing it was
mentioned that it was believed that it would be necessary to obtain a waiver
from the Panel on Takeovers and Mergers (the 'Panel') from the obligation of the
principal shareholders, who have conditionally agreed to subscribe under the
Placing, to make a mandatory cash offer for the Company under Rule 9 as a result
of such subscription.

Following the Placing, the principal shareholders who participated in the
Placing, conditional on shareholder approval, will have shareholdings in the
Company as set out in the table at paragraph 4.3 of Part III of the Circular.



Accordingly, no Shareholder or Shareholders deemed to be acting in concert will
hold in excess of 30 per cent. of the Company (as indicated in the table at
paragraph 4.3 of Part III of the Circular) following the Placing. Therefore (i)
no waiver from the requirement of Rule 9 of the Code is being sought from the
Panel; (ii) Shareholder approval is not required in connection with the
dispensation from the requirements of Rule 9 of the Code in respect of the
Placing and (iii) the Panel has not reviewed the Circular.



Undertakings

The Company is in receipt of undertakings to vote in favour of the Resolution in
respect of 42,241,541 Ordinary Shares (representing approximately and in
aggregate 76.6 per cent. of the current issued share capital of the Company).



The EGM



The EGM will be held at the offices of Pinsent Masons, CityPoint, One Ropemaker
Street, London EC2Y 9AH am at 10 a.m. on 23 July 2007, at which the Resolution
will be proposed.



Recommendation

The Directors unanimously recommend that you vote in favour of the Resolution to
be proposed at the EGM, as they intend to do in respect of their own
shareholdings.

For further information please contact:

Sarantel Group plc                                    Tel: [phone]
Geoff Shingles, Chairman

College Hill                                          Tel: [phone]
Carl Franklin / Ben Way

Ambrian Partners                                      Tel: [phone]
Tim Goodman







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