RNS Number:4234I
Lionheart PLC
07 March 2003


Lionheart plc

Further re: Offer

The Directors of Lionheart today announce an update in respect of certain
contingent liabilities of the Company, additional information on which has been
received since the announcement of the offer for the Company by Sigma Technology
Group plc ("Sigma") ("the Offer").

On 27 February 2003, Lionheart received notification from the advisers to the
Lionheart Group Pension Scheme ("the Pension Scheme") of an anticipated funding
deficit in the Pension Scheme.  Lionheart ceased to be a participating employer
in the Pension Scheme at the time of the disposal of The Croydex Company Limited
("Croydex") in November 1999 when Croydex replaced Lionheart as the principal
employer of the Pension Scheme.  The notification advised that the anticipated
funding deficit is estimated to be #6 million, although the basis of this
calculation is not known.  We are informed that this is likely to lead to the
Pension Scheme being wound up.  The notification referred to the potential
liability of Lionheart to pay a debt to the Pension Scheme under the Pensions
Act 1995.  Lionheart has taken legal advice following this notification.  This
advice has confirmed that, if the Pension Scheme enters winding up, its trustees
can require Lionheart to pay a proportion of the Pension Scheme's deficit
calculated on the basis set out in the Pensions Act 1995 and the regulations
made under it.

The legislation provides that, ordinarily, Lionheart should only be liable for
the proportion of the deficit that relates to employees of Lionheart who have
participated in the Pension Scheme.  On the basis of the information currently
available, the Board of Lionheart believe that there have been approximately 10
employees of Lionheart, out of a total of 975 members of the Pension Scheme.
These employees are believed to have been directors and senior management of the
Lionheart Group.  It is therefore considered likely that Lionheart would be
liable for a small proportion of the total alleged deficit.

It is not possible, at this stage, to quantify Lionheart's liability in respect
of this claim.  This can only be determined in the event that the Pension Scheme
is wound up and its trustees choose to enforce the debt.  The liability may be
based on the level of the deficit (on the basis set out in the Pensions Act
1995) at that time.  In addition, other factors such as whether other employers
have participated in the Pensions Scheme and left at a time when the Scheme was
not underfunded could also affect the liability falling on Lionheart.
Nevertheless, based on the information currently available to the Company, it is
not expected that Lionheart should be liable for a major part of the overall
deficit.

Lionheart had previously made the Board of Sigma aware of a contingent liability
arising from Lionheart being surety of the lease on a property at Earl's Barton,
Northamptonshire.  As assignee under the lease, Croydex is primarily responsible
for any liabilities arising thereunder.  If Croydex is unable to fulfil its
obligations in respect of such liabilities under the lease, Lionheart may be
responsible to the landlord.  In view of the alleged deficit in the Pension
Scheme, the Board of Lionheart believe that there is an increased chance of an
actual liability arising in respect of this lease.  The lease expires on 31
December 2004 and the current annual rent is #100,000 plus insurance.  A
provision for dilapidations may be required.

Shareholders should be advised that these contingent liabilities would be taken
into account by a liquidator in the event of a members' voluntary winding up
procedure, as described in the letter from the Chairman and Independent Director
of Lionheart, dated 27 January 2003.

In the light of the above, the Chairman and Independent Director of Lionheart
re-iterates his recommendation, as advised by Bridgewell Limited, that Lionheart
shareholders accept the Sigma offer.

Shareholders should note that Sigma announced on 4 March that they have extended
the offer until Monday 17 March 2003.  They have the option under the City Code
to further extend it until Thursday 27 March 2003.  In the event that the Offer
should lapse at any time, the Company will communicate with shareholders as soon
as practicable thereafter.

The directors of Lionheart accept responsibility for the information contained
in this announcement relating to Lionheart.  To the best of the knowledge and
belief of the Lionheart Directors (who have taken all reasonable care to ensure
that such is the case), the information contained in this announcement for which
they accept responsibility is in accordance with the facts and does not omit
anything likely to affect the import of such information.


ENQUIRIES:

Lionheart plc
Peter Pollock           07881 626 123


Bridgewell Ltd
Ian Dighe               020 7003 3100


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