Placing

20 March 2013

TANFIELD GROUP PLC

("Tanfield" or the "Company")

Placing

The Company is pleased to announce that it has conditionally raised gross proceeds of GBP2.1m. These funds were raised by way of a placing of 10,500,000 new Ordinary Shares of 5 pence ("Shares") with institutional investors at a price of 20 pence per Share.

The net proceeds of the Placing will be used for general working capital purposes. Together with the recently agreed debt facility, this will allow the Company to respond to market opportunities in the 2013 buying season.

The placing by WH Ireland, is for an aggregate of 10,500,000 new Ordinary Shares at a price of 20 pence per new Ordinary Share to institutional investors, comprising 7,247,826 shares to be issued under existing authorities and 3,252,174 further shares, the issue of which is conditional on the passing of the Resolution.

The Company expects to announce its preliminary results for the year ended 31 December 2012 in April and expects to report turnover for the year of approximately £45m and an operating loss of approximately £15.5m. The announcement on 20 February 2013 set out the current trading position.

In parallel with ongoing discussions regarding the potential sale of the powered access division, the Company has instigated a formal review for a potential sale of that division.

Details of the Placing

The Placing Shares, which, upon issue, will rank pari passu with the Existing Ordinary Shares, have been conditionally placed by WH Ireland with institutional and other investors.

Pursuant to the Placing Agreements entered into today between WH Ireland and the Company, WH Ireland, as agent for Tanfield, has agreed to use its reasonable endeavours to place the Placing Shares with investors. The Placing Agreements contain warranties and indemnities given by the Company with respect to its business and certain matters connected with the Placing.

The issue of the First Tranche Placing Shares is conditional upon, amongst other things, Admission of the First Tranche Placing Shares but is not conditional upon the Resolution being passed at the General Meeting, accordingly, Admission of the First Tranche Placing Shares is expected to occur before the holding of the General Meeting.

The issue of the Second Tranche Placing Shares is conditional, inter alia, on approval by Shareholders at the General Meeting on 15 April 2013 of the Resolution, on the Placing Agreement relating to the Second Tranche Placing Shares not being terminated prior to Admission and on Admission of the Second Tranche Placing Shares becoming effective on or before 8.00 a.m. on 16 April 2013 (or such later time and/or date as the Company and WH Ireland may agree, but in any event not later than 8.00 a.m. on 30 April 2013). The Placing is not being underwritten.

Subject to the passing of the Resolution at the General Meeting, application will be made to London Stock Exchange for the Second Tranche Placing Shares to be admitted to trading on AIM. Subject to, inter alia, Admission becoming effective, dealings in the Second Tranche Placing Shares are expected to commence on AIM at 8.00 a.m. on 16 April 2013.

Following Admission of the First Tranche Placing Shares, the Company will have 136,239,051 Ordinary Shares in issue and following Admission of the Second Tranche Placing Shares this number will further increase to 139,491,225 Ordinary Shares in issue. These figures may be used by Shareholders, from Admission of both the First Tranche Placing Shares and the Second Tranche Placing Shares respectively as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

Expected timetable of principal events

The General Meeting circular is being sent to shareholders today and a copy will be available on the Company's website at www.tanfieldgroup.com

Enquiries :

Tanfield Group Plc Tel : 0845 155 7755

Darren Kell / Charles Brooks

WH Ireland Limited Tel : 020 7220 1666

James Joyce / Nick Field - Corporate Finance

Seb Wykeham / Ruari McGirr - Corporate Broking

Buchanan Tel : 020 7466 5000

Charles Ryland / Helen Greenwood