Proposed Acquisition

RNS Number:7234G
Comprop Limited
11 July 2001

                 ComProp Limited ("the Company" or "ComProp")

                Proposed Acquisition of the Property Portfolio



Highlights

*   ComProp is to purchase a property portfolio for a total consideration of #
    47.6 million.

*   Consideration to be satisfied by way of a cash payment of #29.4 million and
    the issue of 21,416,281 New Ordinary Shares.

*   Property Portfolio consists primarily of commercial property located in the
    principal commercial areas of Guernsey.

*   Development plans for modern office, retail and commercial buildings under
    the "Admiral Park" name.

*   Acquisition is subject to Shareholder approval.



Tom Scott, Chairman, commented:

"I am delighted to be able to announce this acquisition of a major property
portfolio, our first since we changed our name in September 2000 which
signalled our intention to focus on investment in commercial property. I
firmly believe that the properties we are acquiring include prime Guernsey
locations offering enormous potential for development. This is an exciting
opportunity for both the Company and its Shareholders"



Introduction

The Board announces today that the Company has entered into a conditional
agreement to acquire a Property Portfolio from IEG.

The consideration for the Acquisition is #47.6 million (subject to adjustment)
which is to be satisfied by the issue of 21,416,281 New Ordinary Shares,
issued at a price of 85p per share and #29.4 million in cash. The New Ordinary
Shares represent approximately 60.6 per cent. of the Company's enlarged issued
ordinary share capital and IEG intends distributing those shares to its
shareholders.

Application has been made for the New Ordinary Shares to be admitted to AIM
along with the Existing Ordinary Shares. Application has also been made for
the admission of the Existing and New Ordinary Shares to the CISX Official
List. Trading in the New Ordinary Shares is expected to commence on 10 August
2001.

Under the AIM Rules, the Acquisition is subject to Shareholder approval as a
reverse take-over. Accordingly, an Extraordinary General Meeting of the
Company is being convened at which Shareholders will be asked to consider and
pass a resolution to approve the Acquisition. By virtue of Thomas Scott being
a director of both companies and interested in 29.4 per cent. of the issued
share capital of the Company and 15.1 per cent. of IEG, it is also a related
party transaction.

A Prospectus containing details of the Acquisition has been published and is
being sent to Shareholders today, along with the notice of an EGM at which
Shareholders will be asked to consider and pass resolutions to approve,
amongst other items, the Acquisition. The EGM is to be held at The Atlantic
Hotel, St Brelade, Jersey at 12 noon on 8 August 2001. Copies of the
Prospectus are also available from the Company at Television Centre, La
Pouquelaye, St Helier, Jersey JE2 3TP and from the offices of Collins Stewart
Limited, 9th floor, 88 Wood Street, London EC2V 7QR.

Background to and reasons for the Acquisition

During the course of the last financial year, the Company made a number of
substantial disposals. In June 2000, the Channel Television operation was sold
for #16.3 million and this was followed in September by the sale of major
freehold properties in Jersey and Guernsey at a price of #10.5 million. The
Group has also reduced its activities in relation to brown goods by
withdrawing from retailing and third party servicing. Following the disposals,
the Company paid out #17.2 million to Shareholders in October 2000 by way of a
capital dividend and had net cash of almost #10 million as at 31 May 2001.

The change of the Company's name in September 2000 signalled the Board's
intention to focus on investment in commercial property, mainly within the
Channel Islands. The Directors are not aware of any other quoted Channel
Island property company. They believe that demand exists for such a vehicle
with the promising investment opportunities that are currently available.

As a first step in pursuing this strategy, in March 2001 the Company
indirectly acquired the freehold interest in Unite 1, "Rue des Pres Trading
Estate", St Saviour, Jersey through the acquisition of the entire issued share
capital of Lindbergh Limited for a price of #1,150,000. The Company has
granted a lease of the property for a term of 21 years at an initial annual
rental of #86,250.

The Group's current trading activities include Channel Rentals (involved in
television, video and tape rental), Channel Publications (which publishes
Guernsey Homefinder and Guernsey Finder, advertising freesheets, and a range
of maps and guides under its Perry's banner) and TABS, a small Channel Islands
company search and credit reference agency.

The Board has been considering a number of opportunities to progress the
development of the Company. The proposed acquisition of the Property Portfolio
is a major step in that process and fits well with the Group's stated
strategy.

Information on the Property Portfolio

The Property Portfolio consists primarily of commercial property located in
the principal commercial areas of Guernsey. The breakdown by value of the
properties is summarised below:
                                                                    Value

                                                                      #
Properties held as investments                                    20,197,500
Properties held for development                                   17,900,000
Properties in the course of development                           8,650,000

Over a period of years IEG has assembled an important development site,
previously known as Le Bouet, in the north of St Peter Port, Guernsey. Some is
land no longer required for IEG's Guernsey Gas operations and other parts have
been purchased from other landowners. In 1999 IEG sold a parcel of land to a
developer for a seafront office building now known as Trafalgar Court which is
now under construction.

The remainder of this site forming part of the Property Portfolio has been
valued at a total of #31.7 million. Development plans for this will provide
modern office, retail and commercial buildings under the 'Admiral Park' name.
A 61,300 sq. ft supermarket is currently being constructed for Le Riche, a
leading Channel Islands retailer, which is due to be completed by September
2001 and a new access road is under construction to provide access to the
supermarket and other parts of the site.

Planning applications are in progress for the development of other parts of
Admiral Park to construct offices and high quality apartments with imposing
sea views. As a further stage of the development, the Company envisages
building a further 100,000sq.ft. of retail space and 30,000sq.ft. of leisure
space, together with a petrol filling station.

It is the Directors' intention, subject to necessary consents and appropriate
funding arrangements, to complete development of the entire site within a
period of some 4 years following completion of the Acquisition.

One existing office building in the Property Portfolio, Sydney Vane House,
currently includes headquarters accommodation for IEG and its Guernsey Gas
operations. This accommodation will be leased back to IEG for a 6 year term
(with a right for IEG to terminate after 3 years) at an initial annual rental
of #172,160. Small parts of certain other properties will also be leased back
to IEG for various terms at an aggregate annual rental of #86,012.

The remainder of the Property Portfolio is valued at a total of #15.0 million
and is comprised mainly of investment properties in Guernsey, some of which
offer development potential.

Future strategy

The Company will have a clear focus on Channel Islands commercial property.
The appointment of Mr. Nigel Jones as chief executive, and the Chairman's
experience in Channel Islands property matters over the last 14 years mean
that the Company has an experienced management team and is well-placed to
exploit the Property Portfolio and other investment and development property
opportunities in the Channel Islands.

Following the completion of the Acquisition it is the Group's intention to
continue the redevelopment programme commenced by IEG. Bank facilities will be
available at completion to provide the #5.9 million funding estimated to cover
committed expenditure. The Directors have been encouraged by the level of
interest shown by potential tenants for further space at Admiral Park, as and
when it becomes available, and accordingly view the future development of the
Property Portfolio with confidence.

As well as redeveloping the Admiral Park site, the Directors intend to acquire
additional property, mainly within the Channel Islands. The Directors will be
seeking capital growth for the Company, rather than income, and to that end
they intend to fund most of the development expenditure from bank borrowings.

Principal Terms of the Acquisition Agreement

Immediately prior to completion of the Acquisition, the Property Portfolio
will be owned by a subsidiary of IEG, IEG Properties Limited, and certain
subsidiaries of IEG Properties Limited.

Pursuant to the Acquisition Agreement dated 11 July 2001, IEG has agreed to
sell the whole of the issued share capital of IEG Properties Limited to
ComProp for a provisional consideration of #47.6 million, of which #18.2
million is to be satisfied by the issue to IEG (or as it may direct) of
21,416,281 Ordinary Shares, credited as fully paid, with the balance payable
in cash. The consideration is subject to adjustment by reference to a balance
sheet of IEG Properties Limited and its subsidiaries to be prepared as at
completion.

The sale is conditional, inter alia, upon approval by the shareholders of IEG
and ComProp.

IEG has provided certain warranties and indemnities with regard to the
companies and properties being acquired, subject to a maximum liability of #5
million and a time limit for warranty claims of 12 months from completion. In
addition, IEG has agreed to bear the costs (up to a maximum of #3,750,000) of
any remediation works recommended by environmental consultants in relation to
a property known as the Old Retort House, in excess of the amounts allowed for
in the valuation, which cannot be ascertained until the buildings on site have
been demolished.

IEG has agreed that, on completion of the Acquisition, it will enter into a
consultancy agreement under which it will make available the services of its
chief executive, Mr. Paul Fairclough, to assist the Company in relation to the
Property Portfolio. Mr. Fairclough has been instrumental in assembling the
Admiral Park site and formulating plans for its development and his knowledge
of the project and the parties involved will be of considerable assistance to
the Company. The consultancy agreement will provide for Mr. Fairclough to be
available for up to 2 days per week in the first 3 months following
completion, one day per week in the next 3 months and up to 4 days per month
over the final 6 months.

Financing

As at 31 May 2001, the Company had cash available of almost #10 million. To
supplement this, the Company has secured a #30 million loan facility from
NatWest Offshore Limited to fund part of the cash consideration payable for
the Acquisition, the committed development expenditure estimated at some #5.9
million and to provide financing for further developments. #19 million is
available as a 3 year term loan. The remaining #11 million is available for a
6 month period and convertible into a 15 year term loan following entry into
the lease of the supermarket to Le Riche.

Board Composition

The current members of the Board of Directors are as follows:

Thomas Hays Scott, aged 56, (Executive Chairman)

Tom Scott became a Director and chairman of the Company in 1998. Mr. Scott is
also chairman of IEG, having joined IEG in 1991 as a non-executive director.
After Mr. Scott became chairman, IEG acquired Jersey Gas and began a
successful programme of business expansion. Mr. Scott is also Chairman of Ann
Street Group Limited, a quoted brewery, restaurant and hotel group, and of
Jacksons, a private motor group.

Charles Rickard Day, aged 52, (Finance Director)

The Group Finance Director and Company Secretary is a Chartered Accountant who
joined the Company and became a Director in 1992. Born in London, he worked in
Deloitte's London office after qualifying, before moving into commerce and
industry. His past senior executive positions include chief accountant with
Thorn EMI Datatech, financial director with P&O European Ferries and group
financial controller of Private Patients Plan.

John Philip Henwood MBE, aged 55, (Non-Executive Director)

John Henwood is Jersey born and was educated at St Lawrence School and
Victoria College. He joined the Company in August 1962 and became a Director
in 1986. After fulfilling a number of roles, he became Managing Director and
Group Chief Executive in 1987, relinquishing the role of Managing Director of
Channel Television in 1997. He was appointed an MBE for services to
broadcasting in 1998. He retired from his executive role on 31 December 2000
and is chairman of the Jersey branch of the Institute of Directors.

Edward James MacGregor Potter ISO, aged 68, (Non-Executive Director)

Edward Potter was educated at the Manchester Grammar School and the College of
Law, and is a barrister of the Middle Temple. He was appointed Greffier of the
States of Jersey and Law Draftsman in 1971. He retired in 1990 when he was
appointed a Companion of the Imperial Service Order. He was made a Fellow of
the British Institute of Management in 1983 and served as a member of the
General Advisory Council of the Independent Broadcasting Authority between
1982 and 1987. He was elected a Jurat of the Jersey Royal Court in 1994 and is
presently a Member of the States of Guernsey System of Government Review
Panel. He has been a Director since 1991.

John Charles Rowe, aged 50, (Non-Executive Director)

John Rowe is a Chartered Accountant and has been a Director since 1997. He is
a director of BGL Reads International Management Limited, part of Banque
Generale du Luxembourg. He serves on a number of boards of both Channel
Islands and United Kingdom companies, particularly within the finance and
insurance sectors. He is also a past President of the Guernsey Association of
Chartered and Certified Accountants.

Appointment of Chief Executive

Nigel Jones, a chartered surveyor based in Guernsey, has agreed to join the
Company as a director and chief executive with effect from completion of the
Acquisition. Mr. Jones has advised IEG on many aspects of the Admiral Park
development and his appointment should greatly assist the Company in achieving
its objectives.

Nigel Huw Jones, aged 39, is a professional member of the Royal Institution of
Chartered Surveyors. Born in Wales he worked initially for Humberts in
Southampton.

Mr. Jones' practice is currently carried out through a Guernsey company, Jones
& Partners Limited. The only dedicated commercial agency practice in Guernsey,
Jones & Partners Limited were the retained agents of IEG and were responsible
for the pre-letting of the supermarket unit to Le Riche and the pre-letting of
Trafalgar Court on Admiral Park (which is the largest office building in the
Channel Islands). Subject to the completion of the Acquisition, the Company
has agreed to acquire Mr Jones' practice for 200,000 New Ordinary Shares.

He is a Director of BCCP (Guernsey) Limited, a general partner to a commercial
property investment fund, and a non-executive Director of BUPA Lease Co
Limited and UK Care No 1 Limited which is involved in the securitisation of UK
nursing homes.

On the 11 July 2001, Mr Jones agreed to enter into an employment contract with
the Company upon completion of the Acquisition. The contract is terminable by
either of Mr Jones and the Company on not less than one year's prior written
notice. Mr Jones is entitled to receive an annual salary of #120,000 subject
to an annual review by the Remuneration Committee of the Board. Mr Jones may
also be paid an annual bonus at the discretion of the Board. The contract also
provides for Mr Jones to be a member of the Group Pension Scheme. The
employer's current contribution rate is 7.5 per cent. of fixed annual salary.
In addition, Mr Jones is entitled to receive a car allowance and the provision
of private health care insurance for him and his family.

Current Trading and Prospects

The existing trading operations have continued to trade in line with
management expectations since 31 March 2001. As noted above, these operations
are not considered to be core to the Company and will fall in importance as
the Company continues its re-positioning as a quoted property company.

Extraordinary General Meeting

An Extraordinary General Meeting of the Company has been convened to be held
at The Atlantic Hotel, St Brelade, Jersey at 12.00 noon on 8 August 2001,
following the Annual General Meeting, at which an ordinary resolution to
approve the Acquisition will be proposed together with an ordinary resolution
to approve changes to the Share Option Scheme and special resolutions to amend
the Company's Memorandum and Articles of Association and increase the
authorised share capital.

Contacts:

Tom Scott / Charles Day     ComProp Limited          01534 83 55 00

Andrew Duquemin          Collins Stewart CI Limited     01481 731 987

11 July 2001



Definitions

The following definitions apply throughout this announcement unless the
context requires otherwise:

"Acquisition"  the proposed acquisition by the Company of the whole of the
               issued share capital of IEG Properties Limited which will own,
               directly or through its subsidiaries, the Property Portfolio

"Acquisition   the conditional agreement dated 11 July 2001 between the Company
Agreement"     and IEG

"AIM"          the Alternative Investment Market of the London Stock Exchange

"AIM Rules"    the rules published by the London Stock Exchange governing
               admission to, and the operation of, AIM

"Board"        the Board of Directors of the Company

"CISX"         Channel Islands Stock Exchange LBG

"CISX Official the Official List of CISX
List"

"Company" or   ComProp Limited
"ComProp"

"CREST"        the relevant system (as defined in the CREST Regulations) in
               respect of which CRESTCo Limited is the Operator (as defined in
               the CREST Regulations) in accordance with which securities may
               be held and transferred in uncertificated form

"CRESTCo"      CRESTCo Limited

"CREST         The Companies (Uncertificated Securities) (Jersey) Order 1999
Regulations"

"Directors"    the directors of the Company

"EGM" or       the extraordinary general meeting of ComProp convened for 8
"Extraordinary August 2001
General
Meeting"

"Enlarged      the Company and its subsidiaries, following completion of the
Group"         Acquisition

"Existing      the Ordinary Shares in issue
Ordinary
Shares"

"Group"        the Company and its subsidiaries, prior to completion of the
               Acquisition

"IEG"          International Energy Group Limited

"London Stock  London Stock Exchange plc
Exchange"

"New Ordinary  the 21,416,281 new Ordinary Shares proposed to be issued,
Shares"        credited as fully paid, by the Company pursuant to the
               Acquisition and the 200,000 new Ordinary Shares proposed to be
               issued, credited as fully paid, by the Company in consideration
               of the acquisition of the share capital of Jones & Partners
               Limited

"Ordinary      ordinary shares of 5p each in the capital of the Company
Shares"

"Property      the portfolio of development and investment properties to be
Portfolio"     acquired pursuant to the Acquisition

"Proposed      Mr N H Jones
Director"

"Shareholders" holders of Ordinary Shares

"Share Option  the ComProp Group Share Option Scheme
Scheme"

"UK"           United Kingdom of Great Britain and Northern Ireland

Terms defined in the CREST manual shall, unless the context otherwise
requires, bear the same meanings where used herein.