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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,  CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF IRELAND OR SOUTH AFRICA.

Placing of new ordinary shares to raise £12.1 million (net)

31 January 2007

Introduction

The Company has today announced a placing of 16,933,333 new ordinary shares (“Placing Shares”) at 75 pence per share to raise net proceeds of approximately £12.1 million.
The Directors intend to use the net proceeds principally to repay the Group’s mezzanine finance facility.

A letter from the Chairman of AutoLogic, together with a notice convening an Extraordinary General Meeting of the Company (the "EGM") to approve, inter alia, the issue of the Placing Shares in connection with the Placing, will be posted to shareholders today (the "Circular").

Background

On 19 September 2006, in the Group’s interim results for the six months ended 30 June 2006, the Chairman of AutoLogic stated that it was the Group’s major short term objective to reduce debt levels, with particular focus on removing the expensive mezzanine finance facility.

On 2 August 2006, the Board had announced the grant, for a cash consideration of €10.0 million (£6.6 million), of an option to Wallenius Lines AB (“Wallenius”), giving Wallenius the right to acquire the Group’s 40 per cent shareholding in Global Automotive Logistics SAS (“GAL”) upon the payment of a further €10.0 million in cash by no later than 1 December 2006. However, the Board announced on 1 December 2006 that Wallenius had decided not to exercise the option, as a result of which the option expired and the Company retained its shareholding in GAL, and also its representation on the boards of both GAL and GAL’s wholly owned operating subsidiary company, Compagnie d’Affretement et de Transport SA. The Board continues to believe that there is still some potential value in the Company’s interest in GAL, however any realisation is highly contingent. In the meantime, AutoLogic’s GAL debt continues to be ring-fenced and its investment in GAL has been written down to zero.

The Board subsequently announced on 28 December 2006 that Walon Iberia S.L. had entered into an agreement to sell its site located at Meco in Madrid for a cash consideration of €13.0 million (£8.6 million). An initial payment of €5.85 million (£3.9 million) was received on that date and the balance of €7.15 million (£4.7 million) was received on completion of the sale, which took place on 19 January 2007.  The net proceeds of the sale, after expenses, tax and related costs, are estimated to amount to approximately €9.5 million (£6.3 million), which the Directors will apply to further repayment and cancellation of the Group’s mezzanine facility.

Upon the application of the estimated net proceeds of the Spanish property sale, AutoLogic will have cancelled, in total, since the £27.5 million facility was established in April 2006, approximately £19.9 million of the facility; the amount cancelled includes, in addition to the estimated Spanish property net proceeds and the GAL option consideration, approximately £1.3 million of deferred consideration received in November 2006 arising from the April 2006 sale of the Group’s wholly owned French business, Walon France. The Directors anticipate that the outstanding balance drawn down under the mezzanine facility would then be reduced to approximately £6.5 million (including accrued interest and non utilisation fees), with £2.0 million unutilised.

As interest on outstanding borrowings under the facility increased to 16.5 per cent per annum above LIBOR with effect from 1 January 2007, the Directors have determined that it is in Shareholders’ interests to enter into the Placing to enable the remaining balance to be repaid in full and the facility to be cancelled.

Current trading and prospects

In the year to 31 December 2006, UK new car volumes were approximately 3.9 per cent below those experienced in 2005, as a result of which operating profits (before exceptional items and excluding other operating income) for the year ending 31 December 2006 are expected to be slightly below market expectations. However, as a result of strong working capital management, earlier than anticipated debt repayments and interest payments having been below expectations, pre tax profits (before exceptional items and excluding other operating income) for the year are expected by the Board to be comfortably ahead of market expectations.

The Group’s central strategy in 2007 will be to maintain its strong UK market position in finished vehicle logistics, and to further develop complementary activities to create organic growth. In particular it will look to increase the provision of value added services, including Technical Services, VMEX and First Fleet.

The Board expects that new business growth, both achieved and anticipated, together with various cost reductions, will offset the impact in 2007 of the reduction in Toyota distribution volumes, which was announced in the Group’s interim results.

Following the repayment and cancellation of the mezzanine facility, the Board is confident of continuing improvement in AutoLogic’s performance in 2007.

The Board anticipates that the Company’s preliminary results for the year ended 31 December 2006 will be issued in early April 2007.

Reasons for the Placing and use of proceeds

The reason for the Placing and the use of the net proceeds is principally to repay and cancel the Group’s mezzanine finance facility, thereby mitigating the increased costs associated with the facility in 2007.

The balance of the proceeds will be used for working capital purposes.

Details of the Placing 

AutoLogic is proposing to raise approximately £12.1 million net of expenses, through the issue of 16,933,333 Placing Shares pursuant to the Placing at 75 pence per Placing Share (the “Placing Price”).

As announced today, Arden Partners has conditionally placed the Placing Shares in the UK at the Placing Price with various institutional and other investors, including Guinness Peat Group plc (“GPG”) (5,615,819 Placing Shares) and Artemis Investment Management Limited (“Artemis”) (3,000,000 Placing Shares). The issue of Placing Shares to each of the aforementioned substantial shareholders is classified as a transaction with a related party for the purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the Directors, with the exception of Mark Butcher, on the grounds that he is an appointee of GPG, have consulted with AutoLogic’s nominated adviser, Arden Partners, and consider that the subscriptions by GPG and Artemis, pursuant to the Placing at the Placing Price, are fair and reasonable as far as shareholders are concerned.

As part of the Placing Neil Johnson, John Merry, Russell Brown, Tim Barber and Christopher French will respectively subscribe for 266,666, 666,666, 333,333, 200,000 and 33,333  Placing Shares at the Placing Price.

Arden Partners has conditionally agreed that, to the extent that an investor who has committed to subscribe for Placing Shares in the Placing defaults in payment for the Placing Shares allocated to it, Arden Partners will subscribe as principal for those Placing Shares at the Placing Price.

The Placing Agreement and the issue of the Placing Shares is conditional, inter alia, upon:

1. the passing at the EGM of a resolution to authorise and empower the Directors to allot the Placing Shares and to disapply statutory pre-emption rights in relation to such allotment; and
2. Admission.

The Placing Agreement is also terminable in certain circumstances up until the time of Admission, including, inter alia, for a material breach of the Company’s obligations under the Placing Agreement, for a material breach of a warranty contained in the Placing Agreement, or in the event of force majeure or a material adverse change in the financial condition of the Company. The Placing Agreement contains various warranties given by the Company with respect to the business of the Group and certain matters connected with the Placing. In addition, the Company has given indemnities to Arden Partners in connection with the Placing and the performance by Arden Partners of services in relation to the Placing.

The Placing Price represents a discount of approximately 10.2 per cent to the mid market closing price of 83.5 pence per Ordinary Share on 30 January 2007, being the last dealing day prior to the publication of this document. The Placing Shares represent approximately 27.86 per cent of the enlarged issued share capital of the Company following the Placing (assuming none of the Company’s outstanding options and warrants are exercised).

The Placing is being made on a non pre-emptive basis as the time and costs associated with a pre-emptive offer resulting from the application of the Prospectus Rules (which came into force in July 2005) are considered by the Directors to be excessive for an issue of this size. The making of a pre-emptive offer would require the production of a prospectus which would have to comply with the Prospectus Rules and be pre-vetted and approved by the Financial Services Authority.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is anticipated that dealings in the Placing Shares will commence on AIM on 26 February 2007.

Dividends

The Directors intend to take appropriate actions to enable the payment of a dividend to Shareholders as soon as practicable.

Management incentive scheme

The Company proposes to introduce a management incentive scheme following the Placing.

The scheme is proposed to be an executive share option scheme in which a limited number of senior executives of the Company will be awarded options over ordinary shares in the Company. Awards under the scheme will be under the control of the Company’s remuneration committee which will determine the timing and amount of any awards as well as the participants and the applicable performance conditions for vesting. It is proposed that in normal circumstances awards will have a vesting period of not less than 3 years and that the scheme will permit the award of options over up to 10 per cent. of the issued share capital following the Placing.

Commenting on today's announcement, John Merry, Chief Executive of AutoLogic, stated:

”We are very pleased that our major shareholders have supported the placing, which will enable us to complete our restructuring programme through the final repayment of the remaining mezzanine finance, and in addition will further strengthen our balance sheet.

“The company has made very substantial progress with its disposal programme during recent months and the placing brings this period to a successful conclusion.”

Enquiries:

John Merry Chief Executive AutoLogic Holdings plc	Tel: 01934 523299
Russell Brown Group Finance Director AutoLogic Holdings plc	Tel: 01934 523299
Arden Partners plc Chris Fielding Tom Fyson	Tel: 020 7398 1638
Media: Mark Way or Graham Moonie Madano Partnership	Tel: 0207 593 4000
Investors: Neville Harris IR Focus	Tel: 0207 593 4016

NOTES TO EDITORS

General

This announcement is not an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is unlawful and, in particular, is not for publication or distribution into the United States, Canada, Japan, Australia, South Africa or the Republic of Ireland or in any other jurisdiction where such publication or distribution is unlawful unless permitted pursuant to an exemption under the relevant local law. The Placing Shares have not been, nor will be, registered in the United States under the United States Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction of the United States or the laws of Canada, Australia, Japan, the Republic of Ireland or South Africa. Accordingly, subject to certain exceptions, they may not be offered, or sold, directly or indirectly, within the United States, Canada, Australia, Japan, the Republic of Ireland or South Africa or to, or for the account or benefit of, any person in, or any national, citizen or resident of, the United States, Canada, Australia, Japan, the Republic of Ireland or South Africa. The distribution of this announcement outside the United Kingdom may be restricted by law and therefore persons outside the United Kingdom into whose possession this Announcement comes, should inform themselves about and observe any restrictions as to the Placing, the Placing Shares or the distribution of this Announcement.

Arden Partners, which is regulated and authorised by the Financial Services Authority, is acting exclusively for AutoLogic in connection with the Placing and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Arden Partners nor for providing advice in relation to the Placing or any transaction or arrangement referred to herein.

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