Oh CRAP! Is Virotec diluting the share price again??? Or am I...

Oh CRAP! Is Virotec diluting the share price again??? Or am I misunderstanding this:

27 August 2003

Virotec International Ltd (“Virotec”) announces a Placing (the “Placing”) of 25,000,000 new ordinary shares (the “Placing Shares”) at a price of GBP 14p (approx AUD 34cents).

Chairman and Chief Executive Officer Brian Sheeran explains, “The purpose of this Placing, which raises approximately GBP£3.4 million (approx AUD$8.2 million) net of expenses, is to assist in the implementation and expansion of the Company’s strategy and to respond to growing investor interest in the UK. We believe significant market opportunities exist for our wide ranging remediation technologies in the UK and the rest of Europe.”

The Placing Shares constitute 14.9 per cent of Virotec’s current issued share capital.

The Placing Shares are being placed with investors by Numis Securities Limited (“Numis Securities”). The Placing is conditional on the admission of the Placing Shares to dealing on the Alternative Investment Market of the London Stock Exchange becoming effective by no later than 8.00 a.m. on 2 September 2003 (or by such later time and date as Numis Securities and Virotec may decide but no later than 9 September 2003). The Placing Shares will rank pari passu in all respects with the existing ordinary shares of Virotec in issue.

Application will be made for the 25,000,000 new ordinary shares to be admitted to dealing on the Alternative Investment Market of the London Stock Exchange and to be granted official quotation on the Australian Stock Exchange. It is expected that admission will become effective and dealings will commence on 2 September 2003.

Virotec also announces that the unaudited results of the Virotec Group for the year ended 30 June 2003 show revenues of approximately GBP£0.7 million (AUD$1.7 million) and a net loss before tax of approximately GBP£2.3 million (AUD$5.6 million). At 30 June 2003 Virotec had a cash balance of GBP£2.6 million (AUD$6.4 million). Virotec expects to release its full trading results for the year ended 30 June 2003, by mid September 2003.