Corus Group plc Announces Banking Facility.

Business Editors

LONDON--(BUSINESS WIRE)--Aug. 1, 2003

Financing

- Corus Group plc ('Corus') is today pleased to announce that it has signed a new EUR1.2 billion banking facility, to replace the existing facility that was due to expire at the end of January 2004. The new amortising syndicated facility has a final maturity date of 30 June 2006, and provides committed bank financing for Corus' working capital requirements. The key elements of the facility are set out in Note 1 below.

In addition, Corus is continuing to progress a range of options with respect to the funding of the Group's proposed UK restructuring measures, as set out at the time of Corus' AGM on 29 April.

Trading

Corus progressively achieved a more consistent manufacturing performance across the Group during the first half of 2003, including the successful resumption of two blast furnace operations at Port Talbot in January which has brought greater stability to the UK businesses. In EU markets generally, despite subdued levels of steel demand, improvements in average selling prices were secured. Against this background, the Group's operating result before exceptional items for the first half of 2003 is anticipated to be around GBP100m better than in the second half of 2002, when a loss of GBP141m was incurred. Net borrowings at the end of the half year have increased to around GBP1.55 billion, principally due to higher working capital requirements reflecting improved selling prices and increased output levels.

The Group's interim results are scheduled to be released on 24 September 2003.

Outlook

During the second half of 2003 the Group expects to continue to benefit from the improvements being made in its manufacturing performance, particularly in the UK, as well as from the strengthening of the Euro against Sterling, as currency exposure hedging of up to six months unwinds. Nevertheless, conditions in EU markets remain both challenging and uncertain. In addition Corus' results for the second half of the year will include the normal seasonal impact of planned Summer and Christmas maintenance periods.

Notes:

1. As indicated above, the new revolving multi-currency syndicated facility is a working capital facility. Under the terms of this facility, Corus has successfully agreed with its banks considerable flexibility as to the raising of additional funding to fully implement the UK restructuring programme.

The principal terms of the new syndicated facility, which is normal for a facility of this type, include:

-- Committed funding of EUR1.2 billion until the end of January

2004, reducing to EUR1.0 billion until the end of June 2005;

then EUR0.8 billion until the end of December 2005; and,

EUR0.6 billion until the end of June 2006.

-- Fixed security over shares in Corus UK Limited, and over

shares in Corus Nederland BV. A floating charge over the

assets of Corus Group plc and Corus UK Limited. The charge

over Corus UK Limited is subject to a cap of 20% of tangible

assets, consistent with the terms of the GBP150m 2016

debenture stock.

Covenants:

-- Group EBITDA / net interest cover shall not be less than: 2

times until the end of December 2003; 2.5 times until the end

of June 2004; 3 times until the end of December 2004; 3.5

times until the end of December 2005; and, 4 times until the

end of June 2006.

-- Group net tangible worth shall not be less than GBP2.5 billion

(after allowing for impairment / restructuring costs).

-- Dividends of up to 30% of net distributable earnings from

ordinary activities are permitted, subject to a Group EBITDA /

net interest cover of at least 7 times.

-- Group gearing (net debt / net tangible worth, after allowing

for impairment / restructuring costs) shall not exceed: 75%

until the end of June 2004; 65% until the end of June 2005;

and, 60% until the end of June 2006.

-- Corus Nederland net tangible worth shall not be less than EUR2

billion, and Corus Nederland cumulative EBITDA shall not be

below EUR150m for the six months to the end of December 2003,

plus EUR75m for each quarter thereafter.

Taking account of the new facility, together with the Group's existing bonds and debentures, total committed borrowing facilities available to the Group now amount to around GBP1.9 billion.