Proposed Return of Capital & Other News

De La Rue PLC
22 November 1999


De La Rue plc Proposed return of capital, creation of New De La Rue plc and
repayment of the preference shares


Further to the announcement made on 31st August 1999 concerning De La Rue's
intention to return capital to shareholders, De La Rue today announces
proposals to return approximately £103.7 million, equivalent to 46 pence per
De La Rue ordinary share ('Ordinary Share') to shareholders, a scheme of
arrangement under section 425 of the Companies Act ('the Scheme'), the
creation of New De La Rue and the repayment of the 500,000 2.45 per cent. £1
cumulative preference stock units ('Preference Shares') at par.

Details of the Scheme

Under the proposed restructuring, a Court approved scheme of arrangement will
be effected whereby ordinary shareholders will receive ordinary shares in New 
De La Rue ('New Shares') and a cash payment in return for the cancellation of
their existing Ordinary Shares on the following basis:

For every 20 Ordinary Shares:       17 New Shares and 920p in cash

The ratio is based on the closing mid market price on 22nd November 1999 of
310p, after adjusting for the interim dividend of 4p per share declared today.

Background to and reasons for the return of capital 

On 31st August 1999, De La Rue announced the sale of the card activities of
its Card Systems Division for a total consideration (inclusive of the
assumption of debt by the purchaser of £30 million) of £200 million. This sale
was completed on 1st October 1999. 

The Board has concluded that following the disposal, the Group has more
capital than it requires to fund its future growth and accordingly has decided
that this surplus capital should be returned to shareholders.

In considering the appropriate level of capital return and the method by which
this should be achieved, the Board has sought to:

-  reduce the cost of capital through the repayment of surplus cash and the
   reintroduction of debt;
-  to maintain the financial strength of the Group pending further investment
   in its retained businesses and in developing its new Services and Solutions
   Division; and
-  benefit both shareholders and the Group by making the repayment in as tax
   efficient manner as possible.

In addition, the creation of New De La Rue will allow greater flexibility in
managing the Group's businesses.

Financial effects of the Scheme

Upon implementation of the Scheme, the net assets of the Group will be reduced
by the amount of the return of the capital and the Group's results will be
impacted by the effect that the return of capital has on the Group's interest
charge. The Directors expect that the reduced number of shares in issue will
result in an enhancement in earnings per share.

Change of name

In order to maintain continuity and protect the goodwill in the company's
name, it is proposed that conditional upon the Scheme becoming effective, New
De La Rue plc will immediately change its name to De La Rue plc.

Authority to repurchase New Shares

Conditional upon the Scheme becoming effective, the Directors will have the
authority to make market purchases of approximately 10 per cent. of the issued
share capital of New De La Rue. 

The Directors have no present intention of exercising the authority, although
they will continue to review the capital resources available to the Group and
may where appropriate seek to make further capital returns.

Dividends

The Directors intend to adopt a dividend policy consistent with the dividend
policy of De La Rue. After taking into account the reduction of the number of
shares in issue, New De La Rue will pursue a progressive dividend policy
whilst also seeking to build the level of cover from the lower levels reported
by De La Rue in recent years.

Repayment of the Preference Shares

Conditional upon the approval of shareholders and the consent of the Court,
the 500,000 Preference Shares of £1 each will be repaid at par together with
any accrued dividends and cancelled.
 
Other issues


The board of directors of New De La Rue will be identical to the board of
directors of De La Rue.

New De La Rue will be listed on the London Stock Exchange.

Proposals will be made to existing share option holders to rollover their
existing entitlements into similar schemes in the new company. 

A circular convening a Court meeting and Extraordinary General Meeting
together with full Listing Particulars for New De La Rue will be sent to
shareholders in early December. The shareholder meetings will be held in early
January 2000. Conditional upon shareholder and Court approval dealings in New
De La Rue shares are expected to commence in early February and capital repaid
to shareholders as early as possible after that date. Dealings in the
Preference Shares are expected to cease at the same time as the Scheme becomes
effective.


Enquiries:

De La Rue:                                    01256 329122       
Paul Hollingworth, Finance Director
Mark Fearon

Cazenove & Co.:                               0171 588 2828
Michael Wentworth-Stanley
Dermot McKechnie


Cazenove & Co., who are regulated in the United Kingdom by The Securities and
Futures Authority Limited, are acting for De La Rue plc and New De La Rue plc
in connection with the proposal described in this press release and no-one
else and will not be responsible to anyone other than De La Rue plc and New De
La Rue plc for providing the protections afforded to its customers or for
providing advice in relation to the proposals.