European Capital Limited Announces Intention to Float (2)

The European Capital Group expects to make investments which are typically between EUR5 million and EUR125 million. European Capital sponsored buyouts would typically be of companies with an enterprise value of between EUR50 million and EUR500 million. The European Capital Group may however participate in co-investments with the American Capital Group in transactions involving companies with a larger enterprise value. The European Capital Group will be leveraged to enhance investment returns.

Existing Portfolio

As at 15 April 2007 the largest ten investments held by the European Capital Group were:

    
    Investment     Trading name of Transaction type
    date
                   Company
    Feb 2007       Delsey          Direct Mezzanine
    Jul 2006       Farrow & Ball   One-Stop Buyout(TM)
    Nov 2005       Eau Ecarlate    Direct Mezzanine
    Oct 2006       Whitworths      One-Stop Buyout(TM)
    Oct 2006       DX Services     Syndicated Mezzanine
    March 2007     Go Voyages      Direct Mezzanine
    Jul 2006       Avery           One-Stop Buyout(TM)
    Jul 2006       Batisanté       Direct Mezzanine
    April 2006     UPC Norway      Syndicated Mezzanine
    Feb 2007       Gondola         Syndicated Mezzanine

Notes:

-- The relevant legal entities will be specified in the Prospectus.

-- A "One-Stop Buyout(TM)" involves European Capital providing senior and mezzanine debt and a majority of the equity in the buyout of a company.

Dividends and dividend policy

European Capital expects to pay dividends quarterly depending on its level of operating earnings. For 2007, European Capital is targeting a dividend of EUR0.13 per Ordinary Share payable in respect of the third quarter of 2007 and a dividend of EUR0.14 per Ordinary Share payable in respect of the fourth quarter of 2007 from income earned in the second half of 2007. Thereafter, it is anticipated that approximately 50 per cent. of its net operating income will be paid out quarterly in cash dividends, and it is anticipated that 100 per cent. of net capital gains will be retained and redeployed.

European Capital declared its first dividend, of EUR0.29 per Preferred Share, in the fourth quarter of 2006, which has been paid. The Board of Directors has also declared and paid a further dividend of EUR0.21 per Preferred Share in respect of the first quarter of 2007. The aggregate cash cost to European Capital of these dividends was EUR37.5 million.

European Capital's dividend target is based on a number of assumptions and should not, therefore, be regarded as a profit or earnings forecast. Certain principal assumptions relating to European Capital's dividend target will be set out in the prospectus. There can be no guarantee that European Capital will be able to pay dividends at such targeted level or at all.

Management of European Capital's investments

European Capital and its wholly-owned subsidiaries ECAS SICAR and ECAS Sarl have entered into a new investment management Agreement with the Investment Manager (the "Investment Management Agreement") , under which the Investment Manager is responsible for the management of their investments within the investment strategy determined by the Board of Directors. The Investment Manager is entitled to the payment of certain management fees and to reimbursement of certain fees, costs and expenses under the Investment Management Agreement, and also to a termination fee in respect of the investment management agreement which applied prior to Listing.

The Investment Manager

As at 31 December 2006, the Investment Manager had assets under management (at fair value) of EUR1.1 billion, all of which were managed on behalf of the European Capital Group. At present, the Investment Manager only manages the investments of the European Capital Group and ECFS currently only operates to assist the Investment Manager. ECFS is authorised and regulated in the UK by the FSA.

ECFS has offices in London, Paris and Frankfurt and has a total of 68 employees. ECFS' London office has 45 employees and is headed by two managing directors, Ms. Nathalie Faure Beaulieu and Mr. Simon Henderson. The Paris office of ECFS has 21 employees and is headed by managing director Mr. Jean Eichenlaub. Mr. Roland Cline, another managing director, is also located in the Paris office. The Frankfurt office of ECFS' has two employees and is headed by managing director Mr. Robert von Finckenstein, who started work for ECFS on 2 April 2007.

The five managing directors have over 50 years of combined experience in the private equity industry.

ECFS intends in due course to open an office in Madrid. The Investment Manager is actively searching for an investment professional to lead a new office in Madrid. ECFS expects that over time it will open additional offices in other major European financial centres. ECFS also intends to recruit additional investment professionals for its London and Paris offices within the next few months and to expand its existing Investment Teams.

The contents of this announcement, which has been issued by European Capital and is the sole responsibility of European Capital, has been approved by JPMorgan Cazenove solely for the purpose of section 21 of the Financial Services and Markets Act 2000, as amended.

Citigroup, JPMorgan Cazenove and Merrill Lynch, each of which is authorised and regulated in the UK by the Financial Services Authority, are advising European Capital and no one else in connection with the Offer, the contents of this announcement and any matter referred to herein, and will not be responsible to anyone other than European Capital for providing the protections afforded to the respective customers of Citigroup, JPMorgan Cazenove and Merrill Lynch nor for providing any advice in relation to the Offer, the contents of this announcement or any matters referred to herein.

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the Prospectus. Copies of the Prospectus will, following publication, be available from the offices of Citigroup at 33 Canada Square, Canary Wharf, London E14 5ZB and at the registered office of European Capital at First Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 6HJ.

This announcement (or any part of it) and the information contained herein is not to be reproduced, published, distributed, passed on, or the contents otherwise divulged, directly or indirectly, in or into the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction where such reproduction or distribution would be unlawful, and does not constitute, or form part of, an offer of securities for sale into the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction. This announcement does not constitute or form part of an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction.

The shares to be offered in the Offer have not been, and will not be, registered under the US Securities Act of 1933, as amended, or under the US Securities Exchange Act of 1934, as amended, or with any securities regulatory authority of any state or other jurisdiction in the US for offer or sale as part of their distribution and may not be offered or sold in the US except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable state securities laws. There will be no public offering of the securities in the United States.

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