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Strathmore Makes Technology Investment Move

Strathmore Makes Technology Investment Move

$8 Million Cash Issue to Follow

Auckland - Friday, 3 September 1999 - Following a change in shareholding, Strathmore Group Limited (NZSE: SMR) today appointed a new board, who announced that the company would seek to raise $8 million via a cash issue to invest in high growth technology businesses. Advantage Group (NZSE: ADV) has become a cornerstone shareholder, holding around 20% of Strathmore. Other shareholders include Cullen Investments, at 10%, with the balance held by Saree Holdings and other investors. Earlier today Saree purchased the Thompson family shareholding in Strathmore at $0.18 per share. Strathmore also acquired the investment arm of technology advisory firm, Foresight Partners, including its interest in telecommunications and Internet software company, CommSoft, in return for 955,882 Strathmore shares issued at $0.18, a slight premium above asset backing. This represents 5.7% of shares on issue. On completion of all transactions the majority shareholders appointed Foresight Partners' founder, Phil Norman, Peter Wright and Don Cowie to the board of Strathmore, with Mr Norman becoming Chairman. The new directors announced plans to focus on technology investments, targeting Internet, e-commerce and information technology companies with potential to deliver accelerated growth in shareholder value by competing in global markets. The new board, whose members have previously worked together on a number of projects, combines technology appraisal, technology management, international banking, investment banking and capital market expertise. The directors will work actively with investee companies, leveraging their operational and international experience to provide strategic counsel and assistance with international marketing as well as expansion funding. "Strathmore will act as a knowledge bank to investee companies in the Internet, e-commerce and related sectors, assisting them to compete internationally. The board is a seasoned team with an excellent international network of financial, commercial and marketing relationships, a track record in taking NZ companies offshore and an understanding of US capital markets," said Mr Norman. "We will work with senior management in investee companies to develop optimal strategies for entry and growth in US and European markets. "Strathmore will take strategic positions in businesses that have products with the potential to succeed internationally, quality management and the ability to become market leaders in their category. We will provide them with expansion finance, strategic counsel, market entry guidance and advice on capital structure and governance." Cash Issue The board also announced that, to fund its investments, the company would seek to raise $8 million via a 10 for 1 cash issue at $0.05 per share, at a time dependant on presentation and approval of a prospectus. Post the cash issue, ordinary shareholders will also participate in a 1 for 3 issue of options at an exercise price of $0.20. This will leave Strathmore with an initial technology investment fund of over $10 million, after taking into account the proceeds of the issue and current cash on hand. Subject to capital allocation guidelines, cash raised will be used to take strategic positions in qualifying technology companies and assist them to deliver accelerated appreciation in shareholder value. Initial Investment Strathmore also today announced its first investment, an agreement to acquire a stake of up to 31% in CommSoft, a telecommunications and Internet software company that has developed a web browser-based business application for telephony management, cost allocation and tarrifing. The business currently operates in New Zealand, Australia and the UK. Company Background Strathmore Group Limited is a technology investment company. It targets Internet, e-commerce and information technology companies with potential to deliver accelerated growth in shareholder value by competing in global markets. It provides finance, strategic advice and a network of relationships to assist technology companies to migrate internationally. It also manages a high-tech incubator fund which enables smaller companies to grow to the point where they are ready for such a migration. ENDS



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