Acquisition

Velosi Limited
15 December 2006



           Velosi Limited Acquires Majority Stakes in two companies:
              Steel Test (Pty) and Plant Design Engineers Sdn Bhd


Velosi Limited ('Velosi' or 'the 'Company'), a provider of quality assurance and
quality control services to a number of leading national and multinational oil
and gas companies, is pleased to announce that it has conditionally acquired a
51% interest in Steel Test (Pty) Limited ('Steel Test'), a company incorporated
in South Africa, for an aggregate consideration of R12.75 million (approximately
£0.93 million). Steel Test carries out tubular inspection, which is extensively
required for maintaining plant and equipment where piping systems are used to
convey flow or for heat exchange.


Commenting on the acquisition, Dr. Nabil Abdul Jalil, CEO of Velosi said:

'Steel Test has one of the most efficient and effective tubular inspection
systems in the sector and has built a dominant position in South Africa as a
result. Velosi's extensive international presence will allow the Company to
rapidly offer this service elsewhere, whilst the acquisition of a
highly-regarded South African company expands our geographical reach and creates
a new market for other Velosi services.'


Velosi is also pleased to announce that it has conditionally acquired a 51%
interest in Plant Design Engineers Sdn Bhd ('PDE'), based in Malaysia, for an
initial consideration of RM 4.0 million (approximately £0.57 million). PDE
provides state-of-the-art 3D laser scanning imaging of oil and gas plants,
thereby creating as-built, virtual models from which maintenance and
modification plans can be accurately developed.


'The acquisition of a majority stake in PDE ensures that Velosi is at the
forefront of applying state-of-the-art technology in the facilities inspection
market,' said Dr. Nabil Abdul Jalil. 'Laser scanning expertise is a highly
advanced technique that will broaden our product offering and creates an
integrated inspection service that few competitors can currently match. As with
Steel Test, Velosi's international presence will assist in a rapid expansion of
PDE's services.'


Steel Test

Steel Test's technology determines the condition of, and identifies defects in,
pipes and tubes. The technology combines the four most commonly used tubular
inspection techniques into one system, allowing the application to be used with
only one unit and one team. The service offers complete coverage of the full
tube length and the results can be recorded for analysis in office conditions.


The consideration is to be satisfied by R11.75 million (approximately £0.86
million) in cash and the balance of R1.0 million (approximately £73,000) through
the issue of 74,752 new ordinary shares in Velosi ('Ordinary Shares'). In
addition, Velosi has the option, and will be required in certain limited
circumstances, subject to shareholder approval if necessary, to acquire the
remaining 49 per cent. interest in Steel Test for an amount based on a multiple
of six to eight times the profit after tax in the year of acquisition. For the
financial year ended 28 February 2006, Steel Test generated revenues of R18.45
million (approximately £1.34 million), and pre tax profit of R3.9 million
(approximately £0.28 million). As at 28 February 2006, Steel Test had audited
net assets of R10.2 million (approximately £0.74 million). The acquisition of
Steel Test is expected to complete by 31 January 2007.


PDE

Operators and owners of offshore platforms, refineries, petrochemical and power
plants require 3D information on piping, structural elements and appurtenances,
for modification, refurbishment and upgrading work. PDE uses state of the art
equipment and software to create fully intelligent 3D 'as-built' models,
containing precise details of pipe diameters and lengths, valve sizes,
dimensions of structural members. These 3D models form the 'true data' for
further design and engineering, and can be linked to other operations,
maintenance and inspection systems thus enabling full life cycle information
management. For the financial year ended 31 December 2005, PDE generated
revenues of RM2.7 million (approximately £0.39 million), a pre tax profit of
RM0.037 million (approximately £5,000) and had net assets of RM0.32 million
(approximately £46,000).


The consideration is to be satisfied by an initial payment of RM4.0 million
(approximately £0.57 million), of which RM3.2 million (approximately £0.46
million) will be paid in cash and the balance of RM0.8 million (approximately
£0.11 million) through the issue of 117,683 new Ordinary Shares. Further
consideration of up to RM2.0 million (approximately £0.29 million) will become
payable on the achievement by PDE of a range of performance criteria in the
period from completion of the acquisition until 31 December 2009. The vendors of
PDE have guaranteed that PDE will achieve, in aggregate, RM 4.0 million
(approximately £0.57 million) profit after tax over the three financial years
ending 31 December 2009. The acquisition of PDE is subject to, inter alia,
certain regulatory approvals in Malaysia which are expected in early 2007.


Media Enquiries:

+----------------------+-----------------------+---------------------+
|Velosi                |Dr. Nabil Abdul Jalil  |020 7930 0777        |
|                      |                       |                     |
|                      |Dan Ooi                |                     |
+----------------------+-----------------------+---------------------+
|Strand Partners       |James Harris           |020 7409 3494        |
|                      |                       |                     |
|                      |Warren Pearce          |                     |
+----------------------+-----------------------+---------------------+
|Charles Stanley       |Mark Taylor            |020 7739 8200        |
|                      |                       |                     |
|                      |Freddy Crossley        |                     |
+----------------------+-----------------------+---------------------+
|Cardew Group          |Tim Robertson          |020 7930 0777        |
|                      |                       |                     |
|                      |Eden Mendel            |                     |
|                      |                       |                     |
|                      |Emma Consett           |                     |
+----------------------+-----------------------+---------------------+


Notes to editors:


About the Velosi Group

The Velosi Group, founded in 1982, provides quality assurance and quality
control services to a number of leading national and multinational oil and gas
companies, including BP, Shell, ExxonMobil and Chevron. The Velosi Group
operates globally through four principal offices in the USA, the UK, Malaysia
and the UAE and has operational or representative offices in a further 27
countries worldwide. Velosi joined the AIM market on 21 August 2006. The placing
raised £10 million (before expenses), the net proceeds of which will be used to
repay existing loans, provide financing for the Group's acquisitions and planned
expansion into new regions, and to provide working capital for the Velosi Group.
For more information, visit www.velosi.com.


                                    - ENDS -



                      This information is provided by RNS
            The company news service from the London Stock Exchange