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GRAND METROPOLITAN PROPOSES U.S. DEBT ISSUE OF $600 MILLION AND UPDATES 1992 TRADING OUTLOOK

 GRAND METROPOLITAN PROPOSES U.S. DEBT ISSUE OF $600 MILLION
 AND UPDATES 1992 TRADING OUTLOOK
 MINNEAPOLIS, Aug. 25 /PRNewswire/ -- Grand Metropolitan announces that as part of its continuing program of refinancing existing debt when market conditions are appropriate, it is filing today with the Securities and Exchange Commission (SEC) for a further issue of $600 million of fixed rate debt securities in the United States. The proposed issue follows the successful offering of $900 million of long- term debt securities in the United States in August 1991. The new debt to be raised will replace existing borrowings and takes advantage of the currently attractive market rates while lengthening the maturity profile of the group's debt.
 The relevant filing with the SEC in respect of the proposed debt issue will include a statement about current trading. GrandMet has, therefore, decided to update the public statement which was made in May 1992, when its interim results were announced. At that time, Sir Allen Sheppard, chairman and group chief executive, said: "Trading conditions in our major markets continue to be testing. I remain confident that 1992 will be another year of progress for the group, but the rate of our advance will depend on the rate at which the world economy recovers from recession."
 Since May, there has been no economic recovery from recession in either the United States or the United Kingdom and there has been a softening of Continental European markets. Within food, weak overall consumer demand and price pressures have affected many of the group's major categories, particularly vegetables. Market share trends, however, remain generally positive. Pearle and Chef and Brewer continue to reflect the difficult retail market conditions in the United States and United Kingdom respectively. The world-wide operations of both IDV, the group's wines and spirits business, and Burger King continue to sustain good progress.
 In addition to the testing trading environment, the weakening of the dollar in recent months has adversely affected the translation into sterling of the group's significant dollar earnings.
 However, despite these adverse factors, in the absence of unforeseen circumstances the preliminary results for the year to Sept. 30, 1992, due for publication on Dec. 3, 1992, are expected to show profit before tax broadly in line with the previous year's figure of L950 million. In addition, significant extraordinary disposal profits have been made this year compared with corresponding losses in 1991.
 Gearing should be significantly lower than last year and interest cover should improve to around 10 times compared with 6.6 times last year.
 Commenting, Sir Allen Sheppard said: "Although the hoped for economic recovery has yet to materialize, GrandMet's major businesses continue to demonstrate resilience and the board remains confident in the group's competitive strengths and management skills. This will be reflected in the directors' 1992 dividend recommendation which, in the absence of unforeseen circumstances, will be for a final dividend of 7.7p per ordinary share. This would provide a 12.3p per share dividend for the year, an increase of 8.4 percent over 1991, and would be covered two-and-a-half times by earnings.
 "Shareholders can be confident that every effort is being made to optimize performance in the economic climate. Meanwhile our growing financial strength enables us to continue with our substantial programs of brand-building and capital investment in our businesses. The proposed bond issue will improve the debt maturity of the group at attractive rates."
 Using $1.90 for illustrative purposes, the proposed dividend would be equivalent to a gross final dividend of $.78 ($.66 net) per ADR and a gross full-year dividend of $1.25 ($1.06 net).
 Grand Metropolitan PLC, one of the largest international companies in the United Kingdom and a world leader in drinks, retailing and food, has sales of more than $15 billion. U.S. subsidiaries include ALPO Petfoods, Burger King, Carillon Importers, Haagen-Dazs, Heublein, The Paddington Corporation, Pearle, Inc., Pillsbury, and GrandMet Foodservice USA.
 -0- 8/25/92 R
 /CONTACT: Mary Carroll (Press Relations), 612-330-4805 or 011-44-71-321-6000; or Holly Clemente (Investor Relations), 212-554-9200, both for Grand Metropolitan/ CO: Grand Metropolitan PLC ST: Minnesota IN: FOD SU:


KH -- MN008R -- 3368 08/26/92 10:18 EDT
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Date:Aug 26, 1992
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