Celltech Media Inc. announces the existence of liability of its wholly owned U.K. subsidiary, Cellular Telecom Ltd.

TORONTO--(BUSINESS WIRE)--Dec. 13, 1994--Celltech Media Inc. ("the company") (NASDAQ:CTMIF) of Mississauga Ontario, Canada, Tuesday announced that it has discovered the existence of a liability of its wholly-owned U.K. subsidiary, Cellular Telecom Ltd. ("CTL"), which the company believes was present but not disclosed to the company at the time of the purchase by the company of the shares of CTL from Cellular Telecom Holdings Plc. (The "Vendor") in December 1993.

This liability of approximately 1.8 million pounds sterling was due to a U.K. company which operates one of the cellular telephone services which CTL uses to supply its cellular telephone customers. The liability was part of an amount owing to this creditor that the company now believes to have been approximately 3.6 million pounds sterling at the time of purchase, but which was disclosed to have been only approximately 1.8 million pounds sterling. This liability was discovered by the company during a review of CTL's operations after receipt by the company of CTL's September 30, 1994 results.

At various times since the month of June, 1994, the company has arranged for the purchase of this entire debt at a discounted rate, by the issue of its shares at market value. Because of these transactions, the existence of this liability will have no effect upon the cash position of the company, and the effect of same will have been to place the company in the position of a creditor of an inter-company loan to its wholly-owned subsidiary.

The company has asked Messrs. Stephen J. Roth and Michael Rosenswig, two recently appointed directors of the company, to conduct an in-depth investigation into the affairs of CTL and to report their findings to the Board of Directors of the company. Messrs. Roth and Rosenswig have been authorized in particular to review and assess the performance of the management of, and advisors to, CTL and to take whatever steps they and the Board deem necessary to protect the interests of the company and its shareholders. At their suggestion, the company has retained certain experts in the U.K. to assist with this investigation.

In December, 1993, the company agreed to pay, in two stages, the aggregate sum of U.S. $5,750,000 for 100 percent of the shares of CTL. The transaction was ultimately completed during 1994 and the entire amount to the purchase was paid for by the issuance of 2,300,000 Class A shares of the capital of the company. Of those shares, the company currently has in its possession 1,100,000 Class A shares not yet delivered, which, at the time of acquisition were valued at U.S. $2,750,000. Management of the company intends to withhold the delivery of these shares pending the completion of its investigation of CTL's operations and of the Vendor's representations and warranties made at the time of purchase. Following this investigation the company will review all options legally available to it.

Management believes that this undisclosed liability will not impair the current expansion plans of the company for which it has recently completed and announced private placements in excess of $1,700,000 Cdn.

CONTACT: Celltech Media Inc., Toronto

Frank Midghall, 905/890-6340

REPEATS: New York 212-575-8822 or 800-221-2462; Boston 617-330-5311 or

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