Besicorp Announces Merger Agreement and Sale of Two Power Plants.

KINGSTON, N.Y.--(BUSINESS WIRE)--Nov. 23, 1998--BESICORP GROUP INC. (AMEX Emerging Company Marketplace - BGI.EC) (the "Company") announced today that it had entered into an Agreement and Plan of Merger (the "Plan of Merger") with BGI Acquisition LLC ("Acquisition"), a Wyoming limited liability company, and BGI Acquisition Corp. ("Merger Sub"), a New York corporation and a wholly owned subsidiary of Acquisition, that provides that Merger Sub will be merged with and into Besicorp, with Besicorp being the surviving corporation and wholly owned by Acquisition (the "Merger").

Acquisition is wholly owned by Lion Gate, LLC, a British Virgin Islands limited liability company, which is significantly engaged in the business of trading and investments. The sole member of Lion Gate, LLC, is Mr. Thamer Bin Saeed Al-Shanfari, a citizen of the Sultanate of Oman. If the Merger is consummated, Besicorp's shareholders will be entitled to receive $34.50 in cash for each share of Besicorp common stock, subject, in certain circumstances, to upward adjustment if the Company's net asset position exceeds a specified threshold. It is anticipated that if there is any upward adjustment, as to which no assurance can be given, such adjustment will not exceed $4.00 per share.

Consummation of the Merger is subject to the satisfaction of numerous conditions, including the adoption of the Plan of Merger by Besicorp's shareholders and Besicorp's distributing (the "Spin-Off") to its shareholders on a pro rata basis all of the shares of common stock of Besicorp Ltd., a subsidiary of Besicorp, which at the time of the Spin-Off will, among other things, own Besicorp's photovoltaic and independent power plant development businesses and have assumed substantially all of Besicorp's liabilities. No assurance can be given that such transactions will be consummated.

Besicorp also announced today that it had entered into contracts to sell two power plants in which the Company owns partnership interests. The Kamine/Besicorp Beaver Falls L.P. and the Kamine/Besicorp South Glens Falls L.P., which own or lease the two power plants, were parties to the Master Restructuring Agreement ("MRA") with Niagara Mohawk Power Corp. which was consummated on June 30, 1998, pursuant to which the power purchase agreements for the plants were terminated. Besicorp holds partnership interests of 50 per cent in each of the projects.

The Company's share of the proceeds to be received from these sales is estimated to be approximately $5 million. The sales are scheduled to close in December 1998. If the contemplated transactions are consummated, as a result of the sale of the power plants and the assumption by the buyer of the ongoing project obligations, it is also expected that a significant portion of the remaining $8,000,000 previously reserved by the Company with respect to its share of the MRA and operating proceeds retained by the project partnerships will be released to the Company by the partnerships.

The project partnerships and the purchaser of the power plants have entered into binding agreements subject to the satisfaction or waiver of certain conditions, but there can be no assurance that such transactions will be consummated.

Certain statements contained in this press release may be deemed forward-looking statements. Such statements, and other matters addressed in this press release, involve a number of risks and uncertainties. Among the factors that could cause actual plans to differ materially from these statements and other matters are the risks and other factors detailed, from time to time, in the Company's reports with the U.S. Securities and Exchange Commission.