Proposed Placing

9 april 2009 This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful. This announcement is not an offer of securities in the UK, United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful. Helphire GROUP PLC ("Helphire" or the "Company") PROPOSED PLACING AND OPEN OFFER HIGHLIGHTS * Helphire announces its intention to raise £50.0 million by means of the Placing and Open Offer * Cenkos Securities has conditionally placed 151,515,151 New Ordinary Shares at 33 pence per share with a number of existing institutional investors * Shareholders will be offered the opportunity to subscribe for the New Ordinary Shares under the Open Offer A Prospectus relating to the Placing and Open Offer and a notice of a General Meeting to consider the proposals is expected to be posted to shareholders today. Richard Rose, Chairman of Helphire said: "Along with the rest of the new management team at Helphire I am clear about the plan for improving the Group's profitability and cash generation. Tough decisions are being made, implementation of the plan is well underway and the fundraising will provide us with the resources we need to complete it." ENQUIRIES: Helphire Group Richard Rose, Chairman 01225 321 134 Mark Adams, Chief Executive Officer Charles Lambert, Group Finance Director Cenkos Securities 020 7397 8900 Ian Soanes Adrian Hargrave College Hill 020 7457 2020 Roddy Watt Tony Friend Cenkos Securities plc, which is authorised and regulated by the Financial Services Authority, is acting for Helphire Group plc and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Helphire Group plc for providing the protections afforded to its customers or for providing advice to any other person in relation to the matters referred to in this announcement. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, purchase or subscribe for any securities. Any such offer or invitation will be made solely by means of the prospectus to be published by the Company in due course. This announcement has not been examined or approved by the FSA or the London Stock Exchange or any other regulatory authority. The distribution for this announcement in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement is not a prospectus and any purchase of or application for shares in the Placing and the Open Offer should only be made on the basis of information contained in the formal prospectus to be issued in connection with the Placing and the Open Offer and any supplement thereto, copies of which will be made available at the Company's registered office: 1 White Hart House, High Street, Limpsfield, Surrey RH8 0DT. This announcement and the information contained herein does not constitute an offer to sell, exchange or transfer any securities of the Company and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction where the offer, sale, exchange or transfer is not permitted or to any person or entity to whom it is unlawful to make that offer, sale, exchange or transfer. This announcement and the information contained herein are not an offer for sale of securities in or into the United States, Canada, South Africa, Australia, Japan or in any other jurisdiction and the information contained herein is not for publication or distribution in or into the United States, Canada, South Africa, Australia or Japan or any other jurisdiction where the same would be unlawful . The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the "Act"), as amended, and may not be offered or sold in the United States or to or for the account or benefit of US persons (as such term is defined in Regulation S under the Act) absent registration under the Act or an available exemption from registration. No public offering of the securities referred to herein will be made in the United States. The shares referred to herein may not, directly or indirectly, be offered, sold, taken up or delivered in, into or from Australia, Canada, Japan or the Republic of South Africa or in any other jurisdiction where the same would be unlawful. Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties and assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results to differ materially from those expressed in, or implied by, the forward looking statements. These include, among other factors: the effects of continued or increasing volatility in international financial markets, economic conditions both internationally and in individual markets in which Helphire operates, and other factors affecting the level of Helphire's business activities and the costs and availability of future financing for its activities. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Subject to any requirement under the Listing Rules of the UK Listing Authority, neither the Company nor Cenkos Securities plc undertakes any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward looking statements, which speak only as of the date of this announcement. This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful. This announcement is not an offer of securities in the UK, United States, Canada, South Africa, Australia, Japan or any jurisdiction in which the same would be unlawful. HELPHIRE GROUP PLC ("Helphire" or the "Company") PROPOSED PLACING AND OPEN OFFER 1. INTRODUCTION The Board of Helphire (the "Board") is pleased to announce a conditional placing and open offer (the "Placing and Open Offer") of 151,515,151 new ordinary shares of 5 pence each in the share capital of the Company (the "New Ordinary Shares") to raise £50.0 million (approximately £46.5 million net of expenses). The New Ordinary Shares have been conditionally placed with certain existing institutional investors on behalf of the Company by Cenkos Securities plc ("Cenkos Securities") at a price of 33 pence per New Ordinary Share (the "Issue Price"). Application will be made to the UK Listing Authority and to the London Stock Exchange for the New Ordinary Shares to be admitted to the Official List of the UK Listing Authority and to trading on the main market for listed securities of the London Stock Exchange. It is expected that Admission of the New Ordinary Shares will become effective and dealings on the London Stock Exchange will commence at 8.00 a.m. on 29 April 2009. The New Ordinary Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing ordinary shares of 5 pence each in the capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the New Ordinary Shares. A prospectus (the "Prospectus") relating to the Placing and Open Offer and a notice of a general meeting of the Company (the "General Meeting"), which will be convened for the purpose of approving the Placing and Open Offer, is expected to be posted to shareholders today. 2. BACKGROUND TO AND REASONS FOR THE PLACING AND OPEN OFFER Background The Helphire Group (the "Group") is one of the UK's leading providers of credit hire and other accident management services. The Group is headquartered in Bath and it has operations in Peterlee, Northwich and Bristol and a vehicle distribution network consisting of 30 branches. The Group's principal service is the provision of an equivalent replacement vehicle to non-fault drivers involved in motor accidents whilst their vehicle is off the road. The Group is also able to arrange for the necessary repairs to be undertaken. Where these vehicles are supplied to motorists who were not at fault for the accident the cost of these services, which are provided on credit by the Group, is claimed from the party at fault in the accident (or that party's insurers). The Group also provides vehicles on contractual standard hire terms to allow its insurance company clients to meet other vehicle replacement commitments. Furthermore, the Group markets a range of pre and post accident insurance policies enabling it to arrange legal assistance in the event of a personal injury claim and provides accident management services to owners of vehicle fleets. Since the Group's previous fundraising, which was announced on 9 July 2008, the Group's funding position has been impacted by a significant deterioration in trading conditions and the continued increase in the balance of claims outstanding. Recently the Group has faced increasingly difficult trading conditions as the level of motoring activity in the UK and, therefore, the number of accident management opportunities was impacted first by high fuel prices and then by the deepening recession. In addition, the reduction in the number of accidents has resulted in a fall in the general demand for the services of vehicle repair centres which in turn has led to a reduction in the overall repair time for vehicles and, therefore, to a reduction in hire durations and revenues. In response the management team is taking concerted action to reduce the Group's costs. As detailed below under Current Trading its programme of cost reduction and process restructuring is progressing well. Improved settlement of the claims the Group makes against the insurers of the third party involved in an accident is a key priority for the Group. The Group is in active discussions with insurers concerning the settlement of older debt and the establishment of more efficient arrangements for the settlement of on-going claims. The management team is implementing a clear plan, including the use of external specialists, to improve its internal claims management processes in order to improve both the speed of settlement and the recovery level. This involves implementing more disciplined handling procedures and, when settlement cannot be achieved by negotiation with the insurer, passing the case promptly to a solicitor for the issue of legal proceedings. In September 2008, Helphire announced a target of sending all cases outstanding 120 days after payment request to a solicitor. Progress has been made against this target and the Board intends to continue to increase the rate of litigation until an acceptable recovery pattern is established. Management Mark Adams has decided to step down as the Group's Chief Executive Officer following the General Meeting to approve the Placing and Open Offer. Since joining the Group Mark has worked tirelessly in very challenging circumstances to provide the Group with a foundation for its recovery and the Board is very grateful to him. Richard Rose has been appointed as Executive Chairman and Martin Ward, who heads the Group's core accident management business, has been appointed as Group Managing Director and has joined the Board. Additionally, with effect from 16 April 2009, Avril Palmer-Baunack will join the Board as a non-executive Director. Avril will bring extensive experience from a background in the automotive industry, and in particular, the insurance and hire related sectors. Since November 2007 she has been Chief Executive of Autologic plc. Avril has a record of leading the turnaround and subsequent growth of automotive businesses. She was previously CEO of Universal Salvage plc where she successfully re-engineered the business, returning it to profit and growth before selling the group to deliver a significant increase in shareholder value. Prior to that she was Managing Director of FMG Group, the largest independent fleet claims company in the UK where, together with the majority shareholder, she led a major programme delivering substantial revenue growth and a return to profit which involved re-engineering a business with a rental fleet of 300,000 vehicles, 2,000 locations and a rescue and recovery network of over 1500 agents. Avril previously held positions with Caudwell Group, Europcar, Northgate Motor Holdings plc and Kennings. Avril's appointment follows the appointment, on 1 March 2009, of Michael Howard QC, Mark McCafferty, and Andrew Cripps as non-executive Directors and the appointment of Charles Lambert as Group Finance Director on an interim basis with effect from 1 January 2009. There are no further details in respect of Avril Palmer-Baunack and Martin Ward requiring disclosure under Listing Rule 9.6.13. Reasons for the Placing and Open Offer The continued increase in claims outstanding, coupled with the significant reduction in the Group's profitability, has placed significant strain on the Group's funding position. The Group's lending banks remain supportive and have agreed, conditional upon completion of the Placing and Open Offer, to a revised set of terms to reflect the proposed equity fundraising. These revisions include relaxation of covenants in relation to net debt, profitability and claims outstanding. A full summary of the revised facilities will be set out in the Prospectus. Whilst the Group is currently compliant with the terms of its existing facilities, if the Placing and Open Offer failed to complete the Group's borrowing facilities would become due and payable thirty days after the date of the General Meeting. The Board is confident that the measures it has taken and those that it is currently taking to improve the Group's cash generation will improve the Group's working capital position when their full benefit is achieved. However, until that time there may be a further increase in the Group's funding requirement. The proceeds of the Placing and Open Offer will reduce the amount drawn down on the Group's working capital facility but the facility will remain available to be redrawn to meet the Group's working capital requirement. Therefore, completion of the Placing and Open Offer will enable the Group to secure its revised borrowing facilities and the proceeds of the Placing and Open Offer will provide the Group with the balance sheet strength required to pursue its strategies to improve its trading performance and working capital position. 3. CURRENT TRADING AND PROSPECTS OF THE GROUP Since the beginning of the second half of the year there have been welcome signs of improvement in cash collection and used vehicle values. The Group's various initiatives to improve cash collection are beginning to generate positive results and in the three months ended 31 March 2009 cash receipts exceeded billings. Furthermore the Group's programme of bulk settlements is progressing satisfactorily. The Group has seen a degree of recovery in used vehicle valuations and as a result the proceeds of its vehicle disposal programme are running ahead of expectations. According to CAP Motor Research values have increased by approximately 11% in the past two months and much of the decline of the past year has now been reversed. Owing to the Group's depreciation policy, a sustained improvement in anticipated residual vehicle values would result in reduced depreciation charges. The Group announced a cost reduction and process restructuring programme on 17 December 2008 with a target of reducing operating costs by at least £5 million from previously budgeted levels. The Group has implemented the first phase of its plans involving a reduction of approximately 130 positions and is in the process of implementing the next phase which is expected to result in a further reduction of 180 positions. The Board expects that the annualised reduction in operating costs from these phases will significantly exceed the stated £5 million target. Since then further cost reduction plans have been developed and a further phase of cost reduction is currently under way which the Board expects to lead to significant additional savings. The Group has also taken the decision to dispose of approximately 2,000 vehicles and to place more than 3,000 vehicles on rent to corporate customers over the coming months. These arrangements will reduce the size of the active fleet as replacement vehicle demand reduces in the spring and summer such that utilisation is returned to more acceptable levels. The Board recently announced that trading volumes in February and March had been below management expectations and it expects trading conditions to remain very challenging for some time. However, once the full benefit of the actions underway and those planned for the future has been achieved, and provided the economic environment does not deteriorate further, the Board expects to see the outlook for the business improve. The Board remains firmly focused on bringing costs into line with its revenue expectations and improving cash flow. Implementation of the Group's cost reduction and process restructuring programme will continue, as will its focus on reducing the working capital requirement of the business. The Board will also continue to review the performance of all the Group's business units and its contracts with referrers of business and take action as appropriate to improve financial performance. 4. DIVIDENDS In light of the current performance of the Group and its financial position, the Board has not declared an interim dividend in respect of the first half of the current financial year. It is the Board's intention to pay dividends in the future as profit and cash flow generated from operations permits, subject to continued compliance with banking facilities. Under the terms of the Group's banking arrangements, the Company may pay dividends to the extent that the cash flow available to meet debt service obligations exceeds those obligations by certain thresholds and in certain circumstances where working capital improvements are achieved. Dividend payments are required to be matched by corresponding prepayments resulting in reductions in the limits of the Group's banking facilities and in some cases alterations to banking covenants would be made as a consequence of the payment of dividends. 5. THE PLACING AND OPEN OFFER Cenkos Securities has agreed, as agent for the Company, to invite holders of Ordinary Shares ("Shareholders") on the register on 8 April 2009 (the "Record Date") ("Qualifying Shareholders") to apply for the New Ordinary Shares at the Issue Price payable in full in cash on application and free of all expenses on the basis of 0.8425 New Ordinary Shares for every existing Ordinary Share held at the close of business on the Record Date. Entitlements to New Ordinary Shares under the Open Offer will be rounded down to the nearest whole number of New Ordinary Shares. Fractional entitlements to New Ordinary Shares will be aggregated and placed for the benefit of the Company. It should be noted that the Open Offer is not a rights issue. The application form is not a document of title and cannot be traded. Unlike a rights issue, any New Ordinary Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders. Application will be made for the New Ordinary Shares to be admitted to the Official List maintained by the UK Listing Authority and to be admitted to trading by the London Stock Exchange plc on its market for listed securities (together, "Admission"). Cenkos Securities has entered into a placing agreement (the "Placing Agreement") with the Company pursuant to which it has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours as agent of the Company to procure placees to subscribe for the New Ordinary Shares. The Placing and Open Offer is not underwritten but Cenkos has conditionally placed all of the New Ordinary Shares at the Issue Price (subject to clawback by Qualifying Shareholders in order to satisfy valid applications under the Open Offer). The Placing and Open Offer is conditional, amongst other things, on the passing of certain of the resolutions to be proposed at the General Meeting and the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms prior to Admission. Cenkos Securities' obligations under the Placing Agreement are conditional on, inter alia: (a) Admission occurring not later than 8.00 a.m. on 29 April 2009 (or such other time and/or date as the Company and Cenkos Securities may agree, being, in any event, not later than 13 May 2009); (b) the warranties contained in the Placing Agreement being true and accurate in all material respects and not misleading in any material respect at all times before Admission; and (c) the Company complying in all material respects with its obligations under the Placing Agreement to the extent the same fall to be performed prior to Admission. 6. PLACING AND SHARE STATISTICS Issue Price 33p Number of New Ordinary Shares currently in issue 179,832,516 Number of Ordinary Shares in issue immediately 331,347,667 following Admission Market capitalisation upon Admission at the Issue £109.3 million Price Estimated net proceeds of the Placing and Open Offer £46.5 million receivable by the Company Percentage of the enlarged issued ordinary share 45.7 per cent capital represented by the New Ordinary Shares 7. TIMETABLE OF PRINCIPAL EVENTS The following timetable sets out the expected timing of principal events. It is subject to change and any such change will be notified via a regulatory information service. Record Date for the Open Offer 8 April 2009 Ex-entitlement date for the Open Offer 9 April 2009 Prospectus published 9 April 2009 General Meeting 28 April 2009 Admission and dealings in New Ordinary Shares 8.00 a.m. on 29 April commence 2009 ENQUIRIES: Helphire Group Richard Rose, Chairman 01225 321 134 Mark Adams, Chief Executive Officer Charles Lambert, Group Finance Director Cenkos Securities 020 7397 8900 Ian Soanes Adrian Hargrave College Hill 020 7457 2020 Roddy Watt Tony Friend ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.