Issue of Equity

RNS Number:8238R
City Of London Group PLC
07 November 2003


RELEASED ON BEHALF OF:
City of London Group PLC (LSE: CIN)


                                                              7th November, 2003

                CITY OF LONDON COMPLETES SALE OF ARCHIVING BUSINESS
                  AND RAISES #564,000 THROUGH PLACEMENT AT 65p

   *Financing Allows Lengthy Extension of Banking Facility And Better Terms
___________________________________________________________________________

City of London Group shareholders today approved the sale of business and assets
of its 91p.c. owned email archiving software arm Rchive-it.com Limited to
Connected Corporation for guaranteed payments of US$2.45m (#1.5m) and an ongoing
share of royalties.     The first payment of US$700,000 (#400,000) has been
received together with scrip representing 1p.c. of  Massachusetts-based
Connected Corporation, a leading supplier of  storage back-up software and rated
as one of America's fastest growing private companies.


Connected, whose shareholders include Fidelity Corporation and Baker Capital of
New York, has an established customer base of 600 of the Global 2000 largest
corporates as existing customers and has plans to be a dominant force in
e-archiving solutions.


Rchive-it is entitled to 10p.c. royalty on sales and 5p.c. royalty on rentals
for a period of 5.5 years or until a return of US$5m (including US$1.75m of
guaranteed payments from royalties) has been made.    Royalties above US$5m
remain uncapped at 5p.c. on sales and 2.5p.c. on rentals for the balance of the
period.


COLG will use the initial repayment to lower bank overdraft.   At the same time
it has made a placement of 868,970 shares to Savoylane Limited, a London-based
investment company, at 65p per share to raise #564,830 which will allow a
further reduction of bank loan and improve the length and terms of its banking
facility.   The placing represents a 10p.c. issue as permitted by a renewed
resolution at July's AGM.   It brings aboard further new shareholders.


Commenting on these moves today COLG chairman John Greenhalgh said:   "We are
back to foundations with interesting upside in both the quoted investment
portfolio and the stake in Connected.


"We are also considering strategic options for the PR business to restore
value."


COLG net assets at the end of September, including investments at market value,
stood at 55p per share and have shown improvement since.



Further info:    John Greenhalgh, Managing Director, City of London Group Plc,
020 7628 5518

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

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