PMS Palmaris Cap.

RNS Number:2214M
Palmaris Capital PLC
12 May 2005

For immediate release
                                     12 May 2005


                      Palmaris Capital plc ("the Company")


         Proposed sale of the Plant Hire Business and Services Business



The Company today announces the proposed sale of its plant hire business and
services business ("Proposed Business Sales") to two wholly-owned subsidiaries
of Patersons Quarries Limited ("the Purchasers").



The initial aggregate payment to the Company will be #1,200,000 following which
the Company has agreed to pay the creditors of the plant hire business and the
services business up to completion of the Proposed Business Sales. The Directors
estimate that such payments to creditors will be approximately #200,000. The net
proceeds from the sales of the businesses will be utilised for working capital
purposes and will strengthen the Company's balance sheet. In the year to 30 June
2004 the losses attributable to the two businesses being sold were #196,000.



An extraordinary general meeting of the Company ("EGM") is required by the
Companies Act 1985 to approve the Proposed Business Sales as the Purchasers are
connected with W Paterson and J Richardson, directors of the Company. The
transaction is also deemed to be a related party transaction under the AIM Rules
of the London Stock Exchange plc.



Shareholders are today being sent a circular (the "Circular") the purpose of
which is to provide shareholders with further information on the Proposed
Business Sales and to convene an EGM. Notice of the EGM, which will be held at
11 a.m. on 31 May 2005 at 76 George Street, Edinburgh, EH2 3BU, is set out in
the Circular.



Copies of the Circular are available from the Company's registered office,
Paterson Building, Gartsherrie Road, Coatbridge, Lanarkshire, ML5 2EU, free of
charge, until 12 June 2005.



For further information please contact:



Greg Melgaard, Managing Director                Tel: 0207 553 8570
Alasdair Robinson, Noble & Company Limited      Tel: 0131 225 9677



The following text is extracted from the Circular that is expected to be
dispatched to shareholders today. The Circular also contains further details on
the principal terms of the sale agreements.



Introduction



The purpose of this document is to provide you with details of the proposed sale
of the Company's plant hire business and services business and to convene the
Extraordinary General Meeting of the Company for 31 May 2005 to approve the
Proposed Business Sales.



The EGM is required by the Companies Act 1985 to approve the Proposed Business
Sales as the sales are to companies connected with W Paterson and J Richardson,
directors of the Company.



Background



In August 2001, the Company purchased a plant hire and services business in
order to generate revenues to offset the overhead cost of running an investment
company which was not particularly cash generative. However, the Businesses have
not performed as the Directors expected and have been a continual drain on the
Company's resources.



As stated in our final results announcement on 19 November 2004, the Company has
had discussions with a number of interested parties to allow it to exit from the
Businesses.  However, no firm offers were received from any prospective
purchasers. Subsequently the Company has been in negotiations with Patersons
Quarries Limited, regarding the sale of the Businesses to the Purchasers, both
wholly-owned subsidiaries of Patersons Quarries Limited.



Over the last few weeks, the Company has concluded negotiations with Patersons
Quarries Limited for the Proposed Business Sales.  It is proposed that the
Businesses are sold to the Purchasers at their aggregate net book value at 29
May 2005 less #175,000.  This provision reflects the facts that (a) no other
buyers have been found for the Businesses, (b) the Purchasers are taking over
the liability for past service of the employees of the Businesses under the TUPE
Regulations, (c) any sale of the assets and/or closure of the Businesses may
result in lower proceeds being received over an extended period, (d) the
Purchasers are guaranteeing all trade debtors and (e) the Company is providing
no warranties.



The Purchasers will make an initial aggregate payment of #1,200,000 to the
Company.  The Company has agreed to pay the creditors of the Businesses up to
the completion of the Proposed Business Sales.  The Directors estimate that the
total net proceeds to be received by the Company for the sale of the Businesses
will be close to #1,000,000.



The Directors concluded that a sale of the Businesses would allow the Company to
focus on its two main assets and avoid the distractions of a relatively
insignificant unrelated trading business.



Both W Paterson and J Richardson are directors of the Purchasers. Accordingly it
is necessary for the Shareholders to pass the Resolution approving the Proposed
Business Sales for the purposes of section 320 of the Companies Act 1985. Agreed
forms of the Sale Agreements will be on display up to the EGM.  The transaction
is also deemed to be a related party transaction under the AIM Rules of the
London Stock Exchange plc.



Recommendation



The directors of the Company (other than W Paterson and J Richardson in view of
their interest in the Purchasers, who have taken no part in the discussions
regarding the approval of the Proposed Business Sales by the Company) consider
that the terms of the Proposed Business Sales, including the terms of the Sale
Agreements, are in the best interests of the Company and its shareholders and
are fair and reasonable insofar as the Company's shareholders are concerned.  In
forming this opinion, the Board has consulted the Company's nominated adviser,
Noble & Company Limited, which has confirmed its support for the directors'
opinion.  Accordingly, the Directors (other than W Paterson and J Richardson)
recommend that Shareholders vote in favour of the Resolution to be proposed at
the EGM.



Yours sincerely




T P Noble
Chairman


Palmaris Capital plc








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