RNS Number:5425R
Carbo PLC
31 October 2003

Press Release
                                          31 October 2003


         Refinancing of Carbo and Continued Restructuring of the Group

Carbo PLC, the Manchester based industrial abrasives manufacturer and
distributor, has today announced that it has reached an "in principle" agreement
with  a UK asset based lender, subject to legal documentation, to provide new
lending facilities to its largest subsidiary in Germany.  In addition, the
Company intends to launch a rights issue to all shareholders to raise up to Euro2
million at a price of 14p per share.  This rights issue will be underwritten to
a level of Euro1.8 million.  The funds raised from the lender and through the
rights issue will be used to complete the rationalisation of the Group.  The
Company has also today released its interim results, which are the subject of a
separate announcement.

The refinancing will comprise new debt and equity.  The Group's financing
company will provide debt of up to Euro14 million in the form of working capital
facilities and term loans secured on fixed assets.  A number of investors, with
an specialist  knowledge of the industry in which the  Group operates, have
shown their confidence in the Board's plan for the future by committing, subject
to legal documentation, to underwrite a rights issue up to  Euro1.8 million, which
will, nevertheless, be open to all shareholders.

Last year fifteen investors, including employees, strategic abrasive market
investors and  the Chairman, Lord Hodgson, invested #3.185 million in Carbo PLC.
This was by way of a loan structured to be converted into ordinary shares at
the rate of 21.25p for each 10p ordinary share.  The Board is pleased to
announce that, as part of the refinancing, more than 75 percent of the  bond
holders are committed to convert their bond holdings into equity.  The Board is
delighted with this show of confidence by the convertible bond holders and other
investors.

The funds raised will be used to complete the rationalisation of the Group.
This includes projects in both Germany and the UK.  In Germany, the projects
include the completion of the already announced head count reduction programme
which aims to save Euro2.8 million in the first full year; the introduction of a
new IT system and the  consolidation of the product range by eliminating
duplicates.  This will dramatically reduce the number of manufactured products
and facilitate the streamlining of the sales and administration functions. In
the UK, the entire operation based in Trafford Park is to be relocated to a
smaller area of the current site with the balance of the land being released to
the freeholder.

The management of the Group will also be reorganised along functional reporting
lines - manufacturing, conversion/distribution and export sales.  This compares
to the current geographical arrangement which  causes duplication, overlap and
waste.  Ultimately, this will place the responsibility for both Bonded and
Coated manufacturing in Germany and Italy under one manager.  The Coated
conversion businesses and marketing subsidiaries will be made the responsibility
of another dedicated manager.  Finally, export sales and marketing (sales made
to non-Carbo owned overseas companies) will be the responsibility of a third
manager. The main board will also be strengthened in the near future by the
appointment of an additional Non-Executive Director, Stephen Knight.

The results of these measures will ensure that all products will be manufactured
in the lowest cost area of the Group; that wholly owned Coated conversion/
distribution businesses will provide a full service product range to customers
rather than just Carbo manufactured products; and that export sales and
marketing will maximise Carbo's opportunities elsewhere in the world.

Lord Hodgson, Group Chairman, commented "Since the new Board took control of the
Group last year, we have been implementing a phased restructuring plan.  The
restructuring of our operations in Italy and the UK is now substantially
complete.  The remaining area is the German operation and we now have the
finance with which to complete this task.  We are particularly pleased by the
show of confidence by those who, as part of the refinancing, are committed to
underwrite the rights issue and to convert their bonds to equity.  I also value
the broad commercial experience that Stephen Knight will bring to the company
when his appointment to the Board is formally confirmed. The Group now looks
forward to delivering improved results after five years of losses. "

Carbo PLC has subsidiaries across Europe in Germany, Belgium, Norway, Italy,
Portugal and France.  Manufacturing units are located in Germany, Italy and the
UK.  Carbo supplies high quality abrasive products throughout the world under
various brand names including Carborundum, Carbo-Schroeder and BMA.  They are
used in a wide variety of industries including automotive, aerospace, metal
work, furniture, cutlery, valves, power tools, hand tools and tobacco
production.  The Group also owns Anglo Abrasives Limited, one of the largest
distributors of abrasive products in the UK, with branches located throughout
the country.

For further information please contact:

Lars Nyqvist, Chief Executive, CARBO PLC                 Tel:  0161 872 8291

or

Stuart Dootson, Finance Director, CARBO PLC               Tel: 0049 211 7493 333



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