AXU Abraxus Inv.

RNS Number:9161Z
Abraxus Investments PLC
16 March 2006

                                                                   16 March 2006



                            Abraxus Investments PLC

                                (the "Company")



                     Proposed sale of Hungarian Subsidiary





On 6 March 2006, the Company announced that the Board had resolved to seek the
sale of the Company's wholly owned subsidiary, First A.B. Kft (the "Subsidiary
").  The Subsidiary owns the Podmaniczky hotel project in Budapest (the "Hotel
Project") and is the Company's only material non-cash asset.  The sale of the
Subsidiary will result in the divestiture of all of the Company's current
trading activities and pursuant to the AIM Rules requires the approval of the
Company's shareholders by way of ordinary resolution.  The sale of the
Subsidiary will also result in the Company being classified as an "investing
company" under the AIM Rules.  Consequently the Company must seek shareholder
approval of its future investing strategy.



The Company has today posted to shareholders a circular containing notice of an
Extraordinary General Meeting to be held at 3.00pm on 3 April 2006 at which
resolutions will be proposed to (i) approve the sale of the Subsidiary and (ii)
approve the Company's future investing strategy.



Reasons for the sale

As a result of ongoing disputes between groups of shareholders the Board has
decided it is not practicable to progress the raising of equity share capital to
fund further the Hotel Project. In addition, the Austrian bank which had
previously given an "in principle" commitment to provide loan finance for
development of the Hotel Project has confirmed that the facility would not be
made available until such shareholder disputes were settled. The Board is of the
view that these disputes are not capable of being resolved in the short term.

While the Company's funds are anticipated to be adequate to meet all expenses,
including budgeted expenditure on the Hotel Project through to the end of June,
the Board believes that, without the certainty of a loan facility being
available, the Company is not in a position to enter into new commitments with
regard to the Hotel Project.

In view of the situation outlined above, the Board has resolved that it is in
the interests of the shareholders that the Company should seek to dispose of the
Subsidiary.

Terms of the sale

The sale will be conducted by King Sturge Bradmore, an independent international
firm of estate agents by way of public tender for cash.  Shareholder approval is
sought for a sale of the Subsidiary encompassing the following terms:

i.                    a minimum cash consideration comprising #980,000 in
respect of the Subsidiary's shares and #600,000 in discharge of outstanding
loans due from the Subsidiary to the Company;

ii.                   the assumption of all liabilities due to contractors
engaged in the Hotel Project;

iii.                 an open tender period of not less than 4 weeks to be
advertised in Hungary and the United Kingdom;

iv.                 completion of the sale on or before 31 July 2006;

v.                  cash consideration to be paid in full in Pounds Sterling to
be received by the Company within 14 days of the tender acceptance date; and

vi.                 the giving of warranties by the Company (such as those
concerning taxation and title to the Subsidiary's shares) limited to those that
the Directors determine are reasonable and necessary to facilitate the sale of
the Subsidiary.

The Directors and their related parties have confirmed that they will not
participate in the tender.  In the event that a tender is not received based on
the minimum terms set out above, shareholder approval will be sought for a sale
based on the terms of the most favourable tender.

Further information concerning the Subsidiary

The Subsidiary has not been and is currently not involved in any other
developments or projects.  The hotel was acquired by the Subsidiary in early
March 2005 for #917,000 (including acquisition costs).  No profits are currently
attributable to the Subsidiary.  A sale at the minimum cash consideration has
been calculated to (i) return to the Company its investment in the Subsidiary
(ii) repay to the Company the outstanding loan of #600,000 due from the
Subsidiary and (iii) cover selling costs which have been estimated at #60,000.

Investing strategy following the proposed sale

The proposed sale will divest the Company of its sole trading business activity,
which will result in the Company being treated as an "investing company" under
the AIM Rules.

If a satisfactory sale is achieved the Subsidiary sale proceeds will be held on
deposit pending discussions with major shareholders as to the Company's future
direction.  The Board hopes that these discussions will lead to a consensus that
will allow the Company to raise additional equity funds to continue its stated
strategy of actively identifying and pursuing international and UK commercial
property development and investment opportunities that show an expectation of
higher than average returns.  If an appropriate way forward cannot be agreed
within 30 days of the sale then the Board is of the view that existing funds
should be returned to shareholders by way of a members' voluntary liquidation or
otherwise.

General

Copies of the circular are available from the registered office of the Company
at 2 Stone Buildings, Lincoln's Inn, London WC2A 3TH.

Press enquiries:

Westport Communications         Tel: 020 7405 7777

Alan Frame


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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