RNS Number:7412P
TeleCity PLC
15 September 2003

TeleCity plc



Related Party Transaction



In the 2002 Annual Report, TeleCity announced that since 31 December 2002 a loan
facility of #0.7m had been arranged with 3i Group plc, a substantial shareholder
in the Company.   In May 2003, an internal financial review established that
additional funding would be required to support the cash flows of the business
from Q3 2003, in order to take into account the periodical movements in working
capital incurred in the ordinary course of business.



In July 2003, TeleCity therefore arranged a three-month, #1.1m overdraft
facility with Bank of Scotland to replace the initial facility with 3i, with an
option to renew and extend the facility for a further 12 months at the end of
the initial period.  Bank of Scotland made the facility available, at the rate
of 1.5% over LIBOR, on condition that a third party guarantee was made
available, which was subsequently given by 3i having been approached by the
board for the purpose.  3i's arrangement fee in relation to the guarantee was
#100,000.



The Bank of Scotland overdraft facility expires on 30 September 2003, and it is
the Company's intention to extend the facility by a further #1.3m, with the new
total facility of #2.5m due to expire on 30 September 2004.  The Directors have
agreed in principle the terms of the guarantee and renewal fees with 3i in
connection with the new facility, and it is expected that the formal terms of
the facility will be finalised on or before 30 September 2003.  The Directors
consider this facility to be the most effective way to finance the business in
the near-term.



Under the rules of the UK Listing Authority, the facility falls to be a Related
Party Transaction due to the guarantee provided by 3i, who is a major
shareholder of the company.  The Company will therefore be seeking shareholder
approval for the facility at an EGM as required by the UK Listing Authority, and
has already received undertakings from a majority of shareholders (such majority
being in excess of 50% of the shares excluding 3i's shareholding) to approve the
facility on the basis of the heads of terms agreed.



TeleCity's interim results for the 6 months to 30 June 2003 will be announced
later today.



Enquiries:



TeleCity

Rick Hudson, Chief Executive                                 Tel.  020 7512 3500



Citigate Dewe Rogerson

Sue Pemberton
Tel.  020 7638 9571


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