GON Galleon Hldgs

RNS Number:1672C
Galleon Holdings PLC
20 August 2004

20 August 2004


                             Galleon Holdings plc

                        PROPOSED CAPITAL REORGANISATION



Introduction

The board of directors ("Board") of Galleon Holdings plc (the "Company") is
proposing to make a change to the Company's share capital structure ("Capital
Reorganisation").  Set out below are details of and reasons for the proposal.


Capital Reorganisation

The Board believes that the Company's ability to attract new investors would be
enhanced by a sub-division and subsequent consolidation of the Company's
ordinary share capital. The proposed Capital Reorganisation should not affect
the Company's listing on the Alternative Investment Market ("AIM").

The Board therefore proposes that each of the existing ordinary shares of 1p
each ("Ordinary Shares") be sub-divided and redesignated into one new ordinary
share of 0.01p ("New Ordinary Share") and ninety nine deferred shares of 0.01p
("Deferred Shares").

After the sub-division and redesignation each Shareholder will hold one New
Ordinary Share and ninety nine Deferred Shares in place of every existing
Ordinary Share previously held.

The voting and other rights (including the rights to dividends) conferred on the
New Ordinary Shares will be identical to those currently attaching to the
Ordinary Shares as set out in the Articles of Association of the Company.  The
Deferred Shares will carry minimal rights and will have little or no economic
value.

Immediately following the sub-division and redesignation referred to above, all
the Deferred Shares will be re-purchased and cancelled by the Company in
accordance with a proposed contract between nominees of the holders of those
shares (appointed by the Company pursuant to its authority sought under a
resolution at the Extraordinary General Meeting) and the Company (the "Deferred
Purchase Contract").  The Deferred Purchase Contract will be available for
inspection at the registered office of the Company for at least 15 days prior to
the Extraordinary General Meeting and will be made available to all attending
shareholders at that meeting.

Immediately following the re-purchase and cancellation of the Deferred Shares
the directors have decided to reduce the number of shares in issue in an attempt
to reduce the spread between market prices quoted for buying and selling shares
in the Company by consolidating the New Ordinary Shares as follows:


           for every 100 New Ordinary Shares held, a Shareholder will
                          receive 1 Consolidated Share


For example if you held 500 New Ordinary Shares of 0.01p each, these would be
consolidated into 5 Consolidated Shares of 1p each.  Any shareholding that
includes a fractional element (not exactly divisible by 100) will be rounded up
to the nearest whole Consolidated Share.  As with the New Ordinary Shares the
voting and other rights (including the rights to dividends) conferred on the
Consolidated Shares will be identical to those currently attaching to the
Ordinary Shares as set out in the Articles of Association of the Company.

As New Ordinary Shares are to be consolidated and the Deferred Shares are to be
re-purchased and cancelled by the Company, no application will be made for those
shares to be admitted to trading on AIM and no share certificates will be issued
in respect of those shares.

Application will be made for the Consolidated Shares to be admitted to trading
on AIM.  Definitive share certificates in respect of the Consolidated Shares
issued are expected to be dispatched on or before 20th September 2004.
Definitive share certificates for Consolidated Shares will not be dispatched to
those shareholders who have previously elected to have their Ordinary Shares
held in uncertificated form.  Instead the Consolidated Shares will be allotted
to such shareholders in uncertificated form through CREST.  All holdings of
Consolidated Shares will be entered into the Company's share register.

Immediately following the passing of the Resolutions, share certificates in
respect of Ordinary Shares will cease to be valid for any purpose.



Share Options and Warrants

It is not anticipated that the Capital Reorganisation will have any adverse
economic impact on the overall value which could be derived from the existing
options and warrants over the Company's shares.


Extraordinary General Meeting

The proposed Capital Reorganisation will require the passing of certain special
resolutions by the Company's shareholders in an extraordinary general meeting of
the Company to be held at Galleon House, 35 Hagley Road, Stourbridge, DY8 1QR at
9.30 a.m. on Monday, 13th September 2004 for the purpose of proposing, and if
thought fit passing, the following resolutions:



1.   special resolutions to effect the Capital Reorganisation; and



2.   special resolutions to make consequential changes to the Articles
     of Association of the Company as  a result of the Capital Reorganisation.



Copies of the circular and form of proxy are available to the public, free of
charge, at the offices of Durlacher Limited, Moorgate Hall, 155 Moorgate,
London, EC2M 6XB during normal business hours for a period of one month.




Galleon Holdings Plc                          01384 350210
James Driscoll


Durlacher                                     020 7459 3600
Jonathan Retter
Marcus Jackson


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

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