European Capital Limited Announces Intention to Float

St. Peter Port, Guernsey (ots/PRNewswire) -

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES,
CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF SOUTH AFRICA OR IN OR
INTO ANY OTHER JURISDICTION WHERE SUCH PUBLICATION, DISTRIBUTION OR
RELEASE WOULD BREACH ANY APPLICABLE SECURITIES LAW OR REGULATION.

This announcement is an advertisement and not a prospectus and
investors should not subscribe for or purchase any shares referred to
in this announcement except on the basis of information in the
prospectus to be published by European Capital Limited in due course
in connection with the admission of the ordinary shares in the
capital of the Company to the Official List of the Financial Services
Authority and to trading on London Stock Exchange plc's main market
for listed securities (the "Prospectus"). Copies of the Prospectus
will, following publication, be available from European Capital
Limited's registered office.

European Capital Limited ("European Capital"), a closed-ended
investment company incorporated in Guernsey, announces its intention
to proceed with an initial public offering of ordinary shares to
certain institutional and other investors (the "Offer"). European
Capital intends to seek a secondary listing under Chapter 14 of the
Listing Rules of the UK Listing Authority (the "Listing").

Introduction

European Capital is a closed-ended investment company incorporated
in Guernsey in August 2005 for pan-European equity, mezzanine and
senior debt investment. It is managed by European Capital Financial
Services (Guernsey) Limited (the "Investment Manager"), a
wholly-owned subsidiary of American Capital Strategies, Ltd.
("American Capital"). American Capital is a leading US based investor
in equity, mezzanine and senior debt securities and is also the
majority owner of European Capital.

The investment objective of European Capital is to provide
investors with dividend income and the potential for share value
appreciation by investing in debt and equity investments in private
and public companies headquartered predominantly in Europe.

European Capital seeks to achieve its investment objective
through pursuing the following types of investments:

(i) European Capital Sponsored Buyouts-providing debt and equity
financing as the lead investor in the buyout of private and public
companies;

(ii) Mezzanine Direct with Sponsors-providing debt and equity
financing for buyouts sponsored by private equity firms where the
European Capital Group is either the sole or lead mezzanine debt
investor;

(iii) Syndicated Mezzanine and Senior Debt-providing mezzanine and
senior financing for buyouts sponsored by private equity firms where
the European Capital Group is neither the sole nor lead mezzanine or
senior debt investor; and

(iv) Direct Investments-providing debt and equity financing
directly to private and public companies, which is used for growth,
acquisitions or recapitalisations, and investing in structured
finance vehicles.

As at 15 April 2007 the European Capital Group had invested an
aggregate of EUR1.6 billion in 45 companies since its establishment
in August 2005, of which EUR1.2 billion was invested in 30 companies
during 2006. Since its establishment, European Capital has received
EUR288 million from refinancing and syndication of senior investments
and EUR203 million from repayments and exits. The value of European
Capital's investments in portfolio companies as at 15 April 2007 was
EUR1.2 billion. As at 31 December 2006, European Capital's net asset
value per preferred share of no par value in the capital of the
Company (each a "Preferred Share") was EUR9.92 and, as at 15 April
2007, European Capital had paid dividends of EUR37.5 million.

Investment highlights

- Europe is the second largest private equity market and the
largest mezzanine finance market in the world by amount invested.
European Capital and the Investment Manager consider, as a result of
a number of factors, that the European mezzanine market represents a
prime opportunity for new entrants and that the European buyout
market also represents a meaningful opportunity.

- European Capital expects to benefit from the European presence
of the Investment Manager and European Capital Financial Services
("ECFS"), a subsidiary of the Investment Manager. This includes
investment teams in London, Paris and Frankfurt with extensive
experience in European mezzanine and buyout markets. ECFS expects
that over time it will open additional offices in other major
European financial centres and also intends to expand its existing
investment teams.

- European Capital's institutional approach, based on the American
Capital model, provides it with certain competitive advantages.
European Capital is able to invest across a portfolio company's
entire capital structure, to provide portfolio companies with
long-term financing through its permanent capital base and to respond
quickly to potential investments due to its access to European staff
and infrastructure. For One-Stop Buyouts(TM), European Capital
provides equity, senior debt and mezzanine debt. For One-Stop
Financings, European Capital provides all of the senior debt,
mezzanine debt and equity co-invest to support an equity sponsor.
Also, European Capital can fund itself efficiently through both debt
and equity capital resulting in a lower blended cost of capital than
traditional private equity firms.

American Capital overview

American Capital was founded in 1986 and is a NASDAQ-listed
alternative investment asset management company which directly and
through managed funds provides senior debt, mezzanine debt and equity
to fund growth, acquisitions and recapitalisations. It had
approximately $10.9 billion of assets and capital commitments under
management as at 31 December 2006.

The Chairman of European Capital is the founder of American
Capital and has been its director, Chief Executive Officer and
President since American Capital's inception in 1986, and has been
its Chairman other than from August 1997 to August 1998.

Summary of the Offer

- Indicative price range of EUR9.84 to EUR12.00 per share, which
implies a market capitalisation of approximately EUR1.04 billion to
approximately EUR1.27 billion.

- The Offer is expected to consist of the issue of up to 12.7
million shares, implying a total Offer size of approximately EUR125
million.

- The Offer may include an over-allotment option from the Company
exercisable for a period of up to 30 days from the commencement of
conditional dealings, of up to 15% of the shares issued under the
Offer.

Citigroup Global Markets Limited ("Citigroup"), JPMorgan Cazenove
Limited ("JPMorgan Cazenove") and Merrill Lynch International
("Merrill Lynch") have been appointed as joint global co-ordinators
and joint bookrunners in relation to the Offer.

NOTES TO EDITORS

European Capital's investment criteria

The European Capital Group targets companies that generally meet a
combination of the following criteria: a robust track record, strong
cash flows, significant growth prospects, strong competitive
positioning, an experienced management team with a significant
ownership interest and potential for the European Capital Group to
gain liquidity and/or realise appreciation in its investments.

The European Capital Group expects to make investments which are
typically between EUR5 million and EUR125 million. European Capital
sponsored buyouts would typically be of companies with an enterprise
value of between EUR50 million and EUR500 million. The European
Capital Group may however participate in co-investments with the
American Capital Group in transactions involving companies with a
larger enterprise value. The European Capital Group will be leveraged
to enhance investment returns.

Existing Portfolio

As at 15 April 2007 the largest ten investments held by the
European Capital Group were:

Investment Trading name of Transaction type
date
Company
Feb 2007 Delsey Direct Mezzanine
Jul 2006 Farrow & Ball One-Stop Buyout(TM)
Nov 2005 Eau Ecarlate Direct Mezzanine
Oct 2006 Whitworths One-Stop Buyout(TM)
Oct 2006 DX Services Syndicated Mezzanine
March 2007 Go Voyages Direct Mezzanine
Jul 2006 Avery One-Stop Buyout(TM)
Jul 2006 Batisanté Direct Mezzanine
April 2006 UPC Norway Syndicated Mezzanine
Feb 2007 Gondola Syndicated Mezzanine

Notes:

- The relevant legal entities will be specified in the
Prospectus.

- A "One-Stop Buyout(TM)" involves European Capital providing
senior and mezzanine debt and a majority of the equity in the buyout
of a company.

Dividends and dividend policy

European Capital expects to pay dividends quarterly depending on
its level of operating earnings. For 2007, European Capital is
targeting a dividend of EUR0.13 per Ordinary Share payable in respect
of the third quarter of 2007 and a dividend of EUR0.14 per Ordinary
Share payable in respect of the fourth quarter of 2007 from income
earned in the second half of 2007. Thereafter, it is anticipated that
approximately 50 per cent. of its net operating income will be paid
out quarterly in cash dividends, and it is anticipated that 100 per
cent. of net capital gains will be retained and redeployed.

European Capital declared its first dividend, of EUR0.29 per
Preferred Share, in the fourth quarter of 2006, which has been paid.
The Board of Directors has also declared and paid a further dividend
of EUR0.21 per Preferred Share in respect of the first quarter of
2007. The aggregate cash cost to European Capital of these dividends
was EUR37.5 million.

European Capital's dividend target is based on a number of
assumptions and should not, therefore, be regarded as a profit or
earnings forecast. Certain principal assumptions relating to European
Capital's dividend target will be set out in the prospectus. There
can be no guarantee that European Capital will be able to pay
dividends at such targeted level or at all.

Management of European Capital's investments

European Capital and its wholly-owned subsidiaries ECAS SICAR and
ECAS Sarl have entered into a new investment management Agreement
with the Investment Manager (the "Investment Management Agreement") ,
under which the Investment Manager is responsible for the management
of their investments within the investment strategy determined by the
Board of Directors. The Investment Manager is entitled to the payment
of certain management fees and to reimbursement of certain fees,
costs and expenses under the Investment Management Agreement, and
also to a termination fee in respect of the investment management
agreement which applied prior to Listing.

The Investment Manager

As at 31 December 2006, the Investment Manager had assets under
management (at fair value) of EUR1.1 billion, all of which were
managed on behalf of the European Capital Group. At present, the
Investment Manager only manages the investments of the European
Capital Group and ECFS currently only operates to assist the
Investment Manager. ECFS is authorised and regulated in the UK by the
FSA.

ECFS has offices in London, Paris and Frankfurt and has a total of
68 employees. ECFS' London office has 45 employees and is headed by
two managing directors, Ms. Nathalie Faure Beaulieu and Mr. Simon
Henderson. The Paris office of ECFS has 21 employees and is headed by
managing director Mr. Jean Eichenlaub. Mr. Roland Cline, another
managing director, is also located in the Paris office. The Frankfurt
office of ECFS' has two employees and is headed by managing director
Mr. Robert von Finckenstein, who started work for ECFS on 2 April
2007.

The five managing directors have over 50 years of combined
experience in the private equity industry.

ECFS intends in due course to open an office in Madrid. The
Investment Manager is actively searching for an investment
professional to lead a new office in Madrid. ECFS expects that over
time it will open additional offices in other major European
financial centres. ECFS also intends to recruit additional investment
professionals for its London and Paris offices within the next few
months and to expand its existing Investment Teams.

The contents of this announcement, which has been issued by
European Capital and is the sole responsibility of European Capital,
has been approved by JPMorgan Cazenove solely for the purpose of
section 21 of the Financial Services and Markets Act 2000, as
amended.

Citigroup, JPMorgan Cazenove and Merrill Lynch, each of which is
authorised and regulated in the UK by the Financial Services
Authority, are advising European Capital and no one else in
connection with the Offer, the contents of this announcement and any
matter referred to herein, and will not be responsible to anyone
other than European Capital for providing the protections afforded to
the respective customers of Citigroup, JPMorgan Cazenove and Merrill
Lynch nor for providing any advice in relation to the Offer, the
contents of this announcement or any matters referred to herein.

This announcement is an advertisement and not a prospectus and
investors should not subscribe for or purchase any shares referred to
in this announcement except on the basis of information in the
Prospectus. Copies of the Prospectus will, following publication, be
available from the offices of Citigroup at 33 Canada Square, Canary
Wharf, London E14 5ZB and at the registered office of European
Capital at First Floor, Dorey Court, Admiral Park, St Peter Port,
Guernsey GY1 6HJ.

This announcement (or any part of it) and the information
contained herein is not to be reproduced, published, distributed,
passed on, or the contents otherwise divulged, directly or
indirectly, in or into the United States, Canada, Australia, Japan or
the Republic of South Africa, or any other jurisdiction where such
reproduction or distribution would be unlawful, and does not
constitute, or form part of, an offer of securities for sale into the
United States, Canada, Australia, Japan or the Republic of South
Africa, or any other jurisdiction. This announcement does not
constitute or form part of an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of the securities referred
to herein in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration, exemption from
registration or qualification under the securities law of any such
jurisdiction.

The shares to be offered in the Offer have not been, and will not
be, registered under the US Securities Act of 1933, as amended, or
under the US Securities Exchange Act of 1934, as amended, or with any
securities regulatory authority of any state or other jurisdiction in
the US for offer or sale as part of their distribution and may not be
offered or sold in the US except pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the US
Securities Act and in compliance with any applicable state securities
laws. There will be no public offering of the securities in the
United States.

Securities in European Capital have not been and will not be
registered under the applicable securities laws of Australia, Canada,
Japan or the Republic of South Africa and, subject to certain
exceptions, may not be offered or sold within Australia, Canada,
Japan or the Republic of South Africa.

The Offer and the distribution of this announcement and other
information in connection with the Offer in certain jurisdictions may
be restricted by law and persons into whose possession any document
or other information referred to herein comes should inform
themselves about and observe any such restriction. Any failure to
comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.

The price and value of, and income from, shares may go down as
well as up. Potential investors should consult a professional adviser
as to the suitability of the Offer for the individual concerned.

This announcement does not constitute or form part of any offer or
invitation to sell or issue, or any solicitation of any offer to
purchase or subscribe for, any securities and any purchase of or
application for securities of the Company pursuant to the Offer
should only be made on the basis of the information contained in the
Prospectus. This announcement does not constitute a recommendation
concerning the Offer. The price and value of securities may go down
as well as up. Persons needing advice should contact a professional
adviser.

This announcement includes statements that are, or may be deemed
to be, 'forward-looking statements'. These forward-looking statements
can be identified by the use of forward-looking terminology,
including the terms 'believes', 'estimates', 'plans', 'projects',
'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or,
in each case, their negative or other variations or comparable
terminology. These forward-looking statements include matters that
are not historical facts and include statements regarding European
Capital's intentions, beliefs or current expectations concerning,
among other things, European Capital's results of operations,
financial condition, liquidity, prospects, growth and strategies.

By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances. A
number of factors could cause actual results and developments to
differ materially from those expressed or implied by the
forward-looking statements including, without limitation, the factors
to be described in the risk factors section of the Prospectus and the
factors to be described in the operating and financial review section
of the Prospectus.

Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements in this announcement
reflect European Capital's view with respect to future events as at
the date of this announcement and are subject to risks relating to
future events and other risks, uncertainties and assumptions relating
to European Capital's operations, results of operations, growth
strategy and liquidity. Save as required by law or by the Listing
Rules, Disclosure and Transparency Rules or Prospectus Rules of the
Financial Services Authority, European Capital undertakes no
obligation publicly to release the results of any revisions to any
forward-looking statements in this announcement that may occur due to
any change in its expectations or to reflect events or circumstances
after the date of this announcement.

In connection with the Offer, Citigroup Global Markets Limited, or
any of its agents, may (but will be under no obligation to), to the
extent permitted by law, over allot or effect other transactions
intended to enable it to satisfy any over allotments or which
stabilise, maintain or otherwise affect the market price of shares in
European Capital (the 'Shares') at levels which might not otherwise
prevail in the open market. However, Citigroup is not required to
enter into such transactions. Such transactions may be effected on
the London Stock Exchange and any other securities market, over the
counter market or otherwise and, if commenced, may be discontinued at
any time.

Information in this announcement or any of the documents relating
to the Offer cannot be relied upon as a guide to future performance.

Stabilisation/FSA

ots Originaltext: European Capital
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Enquiries to: European Capital Limited, +1-(301)-951-6122, John
Erikson, CFO American Capital, Tom McHale, SVP Finance American
Capital