Capital Reorganisation

Alumasc Group PLC
04 May 2007


The Alumasc Group plc

4 May 2007



                     THE ALUMASC GROUP PLC (the "Company")

Proposal for the cancellation of the Company's share premium account and capital
                               redemption reserve


1                    Introduction

The board of the Company is proposing to seek shareholder approval at an
extraordinary general meeting, of the Company to be held at 10.00 a.m. on 30 May
2007 at the offices of Wragge & Co LLP at 3, Waterhouse Square, 142 Holborn,
London, EC1N 2SW for the cancellation of the Company's share premium account and
capital redemption reserve. This will involve applying to the High Court for the
reduction of the share premium account and capital redemption reserve. The board
believes that the increase in the Company's distributable reserves, achieved by
the proposed cancellations, will assist with the maintenance of the Company's
current dividend policy and, consequently, the marketability of the Company's
shares as well as allowing a more efficient utilisation of the Company's reserve
accounts.

2                    Reasons, effect and benefits of the board's proposal

The Company currently has a balance on its share premium account of £28,538,881
which has arisen as a result of various prior issues by the Company of its
shares at prices in excess of their nominal value. The Company currently also
has a balance on its capital redemption reserve of £693,352 which has arisen as
a result of prior purchases by the Company of its own shares out of
distributable profits. Under the Companies Act 1985, a company's share premium
account and capital redemption reserve constitute non-distributable reserves of
a company and the sums credited to those reserves are not distributable to
shareholders.

The Company's articles of association and the Companies Act 1985 permit the
Company to cancel its share premium account and capital redemption reserve in
appropriate circumstances provided the Company resolves by special resolution to
do so and if subsequent confirmation of those cancellations is given by the High
Court of Justice.


The reserve which arises as a result of the cancellation of those reserves can
then be transferred to the Company's distributable reserve account as
representing realised profit except to the extent that, and for so long as, the
Company has undertaken that it will not treat the reserve arising as a realised
profit, or where the court has directed that it shall not be treated as a
realised profit.


Subject to any direction given by the court in confirming the proposed
cancellations and subject to the terms of any undertaking given by the Company
in relation to the reserve which arises, the effect of the proposal, if approved
by shareholders, will enable the Company to increase its distributable reserves
by the aggregate of the relevant balances on the Company's share premium account
and capital redemption reserve in existence at the time the proposed
cancellations take effect.

The current aggregate balance of these reserves is approximately £29.2 million.
The board does not anticipate that there will be any material change to the
aggregate balance of those reserves prior to the proposed cancellations taking
effect.


3                    Extraordinary general meeting

As explained above, the proposal is conditional on the approval of the Company's
shareholders. Accordingly, the Company is today issuing a circular to
shareholders in relation to the proposal which includes a notice to convene an
extraordinary general meeting of the Company to be held at 10.00 a.m. on 30 May
2007 at the offices of Wragge & Co LLP at 3, Waterhouse Square, 142 Holborn,
London, EC1N 2SW, at which a resolution will be proposed as a special resolution
to:


   • cancel the share premium account of the Company; and
   • cancel the capital redemption reserve of the Company.

Full details of the proposal are contained in the circular. The circular has
also been submitted to the UK Listing Authority and will shortly be available
for inspection at the UK Listing Authority's Document Viewing Facility which is
situated at: Financial Services Authority, 25 The North Colonnade, Canary Wharf,
London E14 5HS: telephone [phone]. In addition, the circular will be
posted to the Company's website at www.alumasc.co.uk.


The current timetable in relation to the holding of the extraordinary general
meeting is summarised below.


10.00 a.m. on 28 May 2007 - Latest time and date for receipt of Forms of Proxy
for shareholders


10.00 a.m. on 30 May 2007 - Extraordinary general meeting

References to time in the above timetable is to London time.


4                    Confirmation by the court

If the proposal is approved by shareholders at the extraordinary general
meeting, the Company will then seek confirmation of the proposed cancellations
by the High Court of Justice. Prior to confirming the proposed cancellations the
court will need to be satisfied that the interests of the Company's creditors
will not be prejudiced by the proposed cancellations.

The Company intends to offer to the court an undertaking that it will treat the
reserve, which arises as a result of the proposed cancellations, as
non-distributable until certain conditions have been met. The board believes, on
legal advice, that this undertaking will be acceptable to the court. The board
also believes that the Company will be able to satisfy the relevant conditions
set out in the undertaking within a reasonable period of time after the proposed
cancellations become effective.

No guarantee can be given that the court will confirm the proposed cancellations
or that the Company will be able subsequently to satisfy the conditions attached
to any undertaking which would permit the reserve arising to be treated as
realised profit and to be transferred to the distributable reserve account of
the Company.

The proposed cancellations will not become effective until such time as the
order of the court confirming the cancellations is registered by the Registrar
of Companies. It is currently anticipated that the court will hear the Company's
application on 20 June 2007 and that the proposed cancellations, if confirmed by
the court at that hearing, will become effective shortly thereafter.



Enquiries:


The Alumasc Group plc 01536 383844

John McCall (Chairman)

Paul Hooper (Chief Executive)

Andrew Magson (Finance Director)


Bankside Consultants Limited

Charles Ponsonby 020 7367 8851



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