RNS Number:7373M
AIT Group PLC
25 June 2003


25 June 2003



                     AIT Group plc ("AIT" or "the Company")

                   Issue of #5 million Convertible Loan Note


AIT today announces that it is raising approximately #5 million (before
expenses) by the issue of unlisted unsecured convertible loan notes ("Loan Notes
") in order to strengthen its balance sheet and to provide additional working
capital. The Loan Notes will be convertible into new ordinary shares of 2.5
pence each ("New Ordinary Shares") at a price of 25 pence per share,
representing a discount of approximately 7.4 per cent. to the closing mid-market
price on 24 June 2003.  Conversion is conditional on shareholder approval being
obtained. Upon conversion of the Loan Notes into New Ordinary Shares ("
Conversion"), up to 20,000,000 New Ordinary Shares will be issued representing
approximately 38.8 per cent. of the fully-diluted issued share capital of the
Company.  Interest at a rate of LIBOR minus 2 per cent is payable to subscribers
of the Loan Notes ("Loan Note Subscribers") quarterly in arrears unless the Loan
Notes are converted prior to 31 October 2003, in which event no interest will
accrue.



Convertibility

Following the issue of the Loan Notes, the Company will seek to ensure that the
Loan Notes can be converted into New Ordinary Shares by obtaining the necessary
shareholder authorities at an Extraordinary General Meeting ("EGM") expected to
be held immediately after the Company's Annual General Meeting. Because certain
of the Loan Note Subscribers acting in concert will, following Conversion,
together hold more than 30 per cent. of the issued share capital of AIT, a
waiver will be sought from The Panel on Takeovers and Mergers from the
obligation of such holders to make a general offer under Rule 9 of  The City
Code on Takeovers and Mergers (a "Rule 9 Waiver"). The Rule 9 Waiver will be
subject to independent shareholder approval. A circular to shareholders (the
"Circular") seeking the requisite shareholder approvals will be posted in due
course.  The Loan Notes will be converted into New Ordinary Shares once such
shareholder approvals have been obtained.  Further details will be provided in
the Circular.



Irrevocable undertakings

To the extent that Loan Note Subscribers hold Ordinary Shares in the Company and
are not precluded from voting by the provisions of The City Code on Takeovers
and Mergers, each Loan Note Subscriber is irrevocably undertaking to vote in
favour of all the shareholder resolutions to be proposed at the EGM of the
Company.



Loan Note term and redemption

If not previously converted, the Loan Notes will have a term of five years. The
Loan Notes may be redeemed in whole or in part by the Company at any time after
30 September 2004.

If, prior to the relevant shareholder approvals being obtained and consequential
conversion of all the Loan Notes:

  * redemption occurs prior to the third anniversary, Loan Note Subscribers
    will be paid three times the face value of the Loan Note plus any unpaid
    accrued interest thereon; and

  * redemption occurs after the third anniversary, Loan Note Subscribers will
    be paid the higher of three times the face value of the Loan Note plus any
    unpaid accrued interest, and the market value of the ordinary shares which
    the Loan Note would have represented had Conversion taken place (calculated
    on the basis of the average price of the previous 10 trading days) plus any
    unpaid accrued interest.



Loan Note Subscribers

The Loan Note Subscribers are subscribing for approximately #5 million of Loan
Notes in total.

Completion of the subscription by non-Venture Capital Trust investors for a
total of approximately #3.6 million nominal amount of Loan Notes is due to take
place shortly in accordance with the terms of a subscription agreement between
AIT and the non-Venture Capital Trust investors and the Venture Capital Trust
investors. The subscription by Venture Capital Trust investors for the balance
of the issue is conditional on satisfactory VCT clearances being obtained from
the Inland Revenue.

The details of the subscription for the Loan Notes by members of the Core
Investor Group (being the Arbib Family Interests, Richard Hicks, Shaw Trustee
Services Limited as trustees of the NJ Randall 2001 Settlement, Geoffrey
Probert, Paul Frederick, Matthew White and each of the Bessemer affiliates), the
amount each has subscribed, the total number of New Ordinary Shares to be issued
upon Conversion and the resulting fully diluted interest of each member is given
in the table below:


Loan Note              Current      Current       Amount        Number of         Total      % of fully
Subscription by       number of    number of    Subscribed     shares upon   entitlement to    diluted
members of the Core    ordinary     Warrants         #         Conversion    ordinary shares   issued
Investor Group         shares *                                                   after         share

                                                                               Conversion      capital
Bessemer affiliates     4,047,189    2,027,279     1,500,000       6,000,000      12,074,468      23.43%
and Stavco Arbitrage
Group LLC

Martyn Arbib 1979       2,081,408    1,042,600       540,000       2,160,000       5,284,008      10.25%
Settlement, Martyn
Arbib and James
Arbib

Richard Hicks           2,405,207      926,757       200,000         800,000       4,131,964       8.02%

Nicholas                1,805,423      724,029       300,000       1,200,000       3,729,452       7.24%
Randall/Trustees NJ
Randall 2001
Settlement

Geoffrey Probert          331,267      115,844        80,000         320,000         767,111       1.49%

Matthew White             122,857       11,449        20,000          80,000         214,306       0.42%

Paul Frederick            135,999       18,032             -               -         154,031       0.30%

Total                  10,929,350    4,865,990     2,640,000      10,560,000      26,355,340      51.15%


* including option entitlements



Other terms of the Loan Note

Upon a merger or acquisition of the Company, the Loan Notes must be redeemed in
respect of the non-Venture Capital Trust investors and will, unless to be
redeemed or purchased, automatically convert into New Ordinary Shares in respect
of Venture Capital Trust investors.  The Loan Notes are repayable in certain
specified events of default.



Warrants

Pursuant to the Warrant Instrument entered into on 13 September 2002, entitling
holders to subscribe for 4,865,990 Ordinary Shares at an exercise price of 87.5
pence per share, Conversion of the Loan Notes will result in the exercise price
of the Warrants being reduced to the conversion price of the Loan Note, being 25
pence.



Related Party

As detailed in the table above, Bessemer affiliates and Stavco Arbitrage Group
LLC, Nicholas Randall, Trustees of the NJ Randall 2001 Settlement, Richard Hicks
and Geoffrey Probert are subscribing for #2.64 million of Loan Notes.  They are
considered related parties for the purposes of Rule 12 of the rules of the
Alternative Investment Market. The Directors, having sought advice from
Arbuthnot Securities, are of the opinion that the terms of the transaction are
fair and reasonable insofar as the holders of Ordinary Shares are concerned.



Contacts

Arbuthnot                                               Tel:  020 7002 4600
Dru Danford

Financial Dynamics                                      Tel:  020 7831 3113
Edward Bridges/Ben Way




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