European Capital Reports euro 0.21 NOI and euro 0.21 Realised Earnings in Q3 2007

06/11/2007 21:43



PR Newswire



ST. PETER PORT, Guernsey, Channel Islands, November 6 /PRNewswire/ --
- Reiterates Q4 Dividend Guidance of euro 0.14

European Capital Limited ("European Capital") (LSE: ECAS) announced today its fourth quarter 2007 dividend guidance and its results for the third quarter of 2007.

FOURTH QUARTER 2007 DIVIDEND GUIDANCE
European Capital reiterates guidance for a fourth quarter 2007 dividend of euro 0.14 per share. This would be an 8% increase over the third quarter 2007 dividend of euro 0.13 per share. It is in line with the dividend target announced at the time European Capital declared its second quarter 2007 dividend and represents a 37% increase from guidance provided in the Listing Prospectus. European Capital has now paid a total of euro 24.9 million in dividends since its May 2007 initial public offering ("IPO").

THIRD QUARTER 2007 RESULTS
European Capital also announced that for the third quarter of 2007, quarterly net operating income ("NOI") (earnings less appreciation, depreciation, gains and losses) increased 62% to euro 23 million, compared to euro 14 million for the third quarter of 2006. NOI per share increased 11% to euro 0.21 per share from euro 0.19 per share for the third quarter of 2006. Earnings less appreciation (depreciation) ("Realised Earnings") increased 44% to euro 23 million, compared to euro 16 million for the third quarter of 2006. Realised Earnings per share were the same at euro 0.21 per share for the quarter compared to the third quarter of 2006. The last twelve months Realised Earnings return on average equity totals 10%.
Earnings for the third quarter of 2007 decreased 84% to euro 3 million, compared to euro 17 million for the third quarter of 2006. Earnings per share for the quarter decreased 87% to euro 0.03 compared to euro 0.23 for the third quarter of 2006. The last twelve months Earnings return on equity totals 9%.
"We are pleased with our third quarter performance, particularly compared to many other financial institutions. We continue to report outstanding Realised Earnings, significantly in excess of our dividends, resulting in a 62% dividend payout ratio," said Malon Wilkus, European Capital Chairman. "Our Realised Earnings are driven by the exceptional performance of our underlying assets, with a 15% annual return since our inception in August 2005 on all of our assets. In fact, the 21% of our assets comprising our equity investments have experienced 25% annual returns since inception. These returns have been corroborated by the euro 0.9 billion of realisations we've experienced since inception in which we've enjoyed a 16% weighted average IRR. Not only are these excellent realised returns, but 57% of these realisations were from senior debt, providing our shareholders with exceptional risk adjusted returns. Our risk profile is further enhanced by an extremely conservative balance sheet and the fact that more than 50% of our Realised Earnings are paid out in cash dividends that the market can't re-price and we can't restate. This is a great time to have permanent capital, a great time to have one of the best capitalised balance sheets and a great time to be levered less than 1:1 debt to equity."
As previously announced, third quarter 2007 dividends were euro 0.13 per share, a 30% growth over the second quarter 2007 dividend of euro 0.10 per share. For the quarter, European Capital's dividend payout ratio was 62% of Realised Earnings of euro 0.21 per share. European Capital's net asset value ("NAV") per share at 30 September 2007 was euro 9.71, a euro 0.02 decrease, including distributions of euro 0.23 per share, from the 10 May 2007 IPO NAV per share of euro 9.73.
"European Capital's portfolio continues to perform well," said John Erickson, Director, European Capital Financial Services (Guernsey) Limited, European Capital's Investment Manager. "Despite the euro 3.7 million in portfolio company net depreciation this quarter, European Capital's net portfolio company appreciation and gains have totalled euro 18 million from inception to date, not counting foreign currency translation. Delinquency or non-accruing loans are at a low level of 2% and have been fully depreciated. European Capital's aggregate portfolio is generating a 15% IRR after taking into consideration the depreciation. We believe that the performance of European Capital's portfolio remains outstanding."
In the third quarter of 2007, European Capital invested euro 0.4 billion of capital to make a total of euro 1.9 billion of invested assets. In the third quarter of 2007, European Capital had euro 3.7 million of net portfolio depreciation, excluding foreign currency exchange translation. Foreign currency net depreciation and losses were euro 16.7 million, mainly as a result of the weakening of sterling against the euro. This is comprised of net depreciation of euro 16.1 million and net losses of euro 0.6 million. The weighted average effective interest rate on European Capital's total investments in debt securities at 30 September 2007 was 12.2% versus 12.0% at 30 June 2007. At the same time, one portfolio company with loans totalling euro 29 million at face value was on non-accrual. This represented 2.0% of total loans at face value at 30 September 2007, compared to no loans at 30 September 2006. The fair value of this loan at 30 September 2007 was nil. "We have successfully increased European Capital's yields on debt investments during the third quarter of 2007 in response to the disruption of the credit markets. That has caused the average effective interest rate to increase by 50 basis points above the level at the end of the second quarter of 2007," said Ira Wagner, President of European Capital Financial Services Limited ("ECFS"). "European Capital's One Stop Buyouts(TM) have become even more important to sellers of companies in this uncertain financing environment and European Capital's ability to underwrite mezzanine tranches is in great demand from other private equity sponsors. In addition, we continue to make progress increasing our market coverage across Europe, and although our investment opportunities in the third quarter of 2007 declined from the second quarter of 2007, due to the decline in very large transactions, the mid-sized transaction market remains active, and our investment opportunities grew 55% over the third quarter of 2006." Since its inception in August 2005 up until 30 September 2007, European Capital has invested in 73 portfolio companies totalling euro 2.7 billion. European Capital has earned a 16% compounded annual return, including interest, dividends, fees and net gains, on realisations of senior debt, subordinated debt and equity investments, totalling euro 885 million of committed capital. These realisations represent 32% of all amounts committed by European Capital.
"During the third quarter of 2007, European Capital's strong balance sheet and capital markets credibility allowed us to raise euro 150 million of financing, during a time when access to capital was closed to many financial institutions," said Tom McHale, Director, ECFS. "European Capital has zero percent of its portfolio in CMBS investments. Only 1.3% of our portfolio assets are in CDOs, which have produced a 21% IRR since our initial investments. It has no sub-prime mortgages. Equity investments in portfolio companies have produced an excellent 25% IRR since inception. European Capital is very well capitalised and has a portfolio that is performing in a market where opportunities have just become far more profitable."

THIRD PARTY VALUATION OF PORTFOLIO INVESTMENTS
European Capital's Board of Directors is responsible for determining the fair value of European Capital's portfolio investments on a quarterly basis. In that regard, the Board retains Houlihan Lokey Howard & Zukin Financial Advisors Inc. ("Houlihan Lokey") to assist it by having Houlihan Lokey regularly review its fair value determinations. Houlihan Lokey is a leading valuation firm engaged in approximately 1,000 valuation assignments per year for clients worldwide. Each quarter, Houlihan Lokey reviews European Capital's determination of the fair value of all portfolio companies that have been a portfolio company at least one year and that have a fair value in excess of euro 10 million. In the third quarter of 2007, Houlihan Lokey reviewed valuations of 16 portfolio company investments having an aggregate euro 594 million in fair value as of the period end. Since European Capital's May 2007 IPO, Houlihan Lokey has reviewed 28 portfolio companies totalling euro 949 million in fair value as of their respective valuation dates. In addition, Houlihan Lokey representatives attend European Capital's quarterly valuation meetings and provide periodic reports and recommendations to the Audit Committee of the Board of Directors.
For those portfolio company investments that Houlihan Lokey has reviewed during each applicable period, using the scope of review set forth by European Capital's Board of Directors, the Board has made a fair value determination that is within the aggregate range of fair value for such investments as determined by Houlihan Lokey.

QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS
European Capital has made available its Quarterly Consolidated Financial Statements for the nine months ended 30 September 2007. A copy may be downloaded from www.EuropeanCapital.com.

Financial highlights for the quarter are as follows:

EUROPEAN CAPITAL LIMITED
CONSOLIDATED BALANCE SHEETS
As of 30 September 2007 and 31 December 2006 (in thousands, except per share data)
(all amounts in euros unless otherwise noted)

30 September 31 December Q3 2007 Versus 2007 2006 Q4 2006 (unaudited)
euro % Assets
Investments at fair value (Cost
basis of euro 1,909,041
and euro 1,072,938
respectively) 1,900,947 1,077,709 823,238 76% Cash and cash equivalents 20,571 85,932 (65,361) -76% Restricted cash 17,404 12,913 4,491 35% Other 11,616 18,031 (6,415) -36% Total assets 1,950,538 1,194,585 755,953 63%

Liabilities and Shareholders' Equity
Debt (maturing within one year
euro 106,951 and
euro-nil respectively) 877,246 422,414 454,832 108% Due to European Capital
Financial Services (Guernsey)
Limited 3,776 3,568 208 6% Accrued dividends payable 14,087 21,750 (7,663) -35% Other 2,863 2,699 164 6% Total liabilities 897,972 450,431 447,541 99%

Commitments and contingencies
Shareholders' equity:
Ordinary shares (nil par
value, authorised to issue
unlimited number of shares,
108,364 issued and
outstanding) 1,030,371 - 1,030,371 NM Preference shares (nil par
value, authorised to issue
unlimited number of shares,
75,000 issued and outstanding) - 737,696 (737,696) -100% Undistributed net realised
earnings 22,966 1,261 21,705 NM Net foreign currency
(depreciation) appreciation (14,609) 332 (14,941) NM Net appreciation of investments 13,838 5,638 8,200 145% Other reserve - (773) 773 100% Total shareholders' equity 1,052,566 744,154 308,412 41%

Total liabilities and
shareholders' equity 1,950,538 1,194,585 755,953 63%

NM = Not Meaningful

EUROPEAN CAPITAL LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine Months Ended 30 September 2007 and 2006 (in thousands, except per share data)
(unaudited)
(all amounts in euros unless otherwise noted)

Three Months Ended Three Months Ended 30 30 30 September September September 2007 Versus 2006 2007 2006
euro % OPERATING INCOME:
Interest and dividend income 45,294 20,361 24,933 122% Fee and other income 1,076 7,959 (6,883) -86% Total operating income 46,370 28,320 18,050 64% OPERATING EXPENSES:
Interest 12,066 5,103 6,963 136% Management fee and reimbursed expenses 8,945 7,971 974 12% Incentive fee - - - NM General and administrative 2,213 898 1,315 146% Total operating expenses 23,224 13,972 9,252 66% OPERATING INCOME BEFORE INCOME TAXES 23,146 14,348 8,798 61% Provision for income taxes (12) (69) 57 83% NET OPERATING INCOME 23,134 14,279 8,855 62%

Net foreign currency (losses) gains (623) 1,406 (2,029) -144%

Net gains on investments - - - NM

TOTAL NET REALISED EARNINGS 22,511 15,685 6,826 44%

Net foreign currency (depreciation)
appreciation (16,065) 237 (16,302) NM

Net (depreciation) appreciation of
investments (3,653) 1,158 (4,811) -415%

INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ("EARNINGS") 2,793 17,080 (14,287) -84%

NET OPERATING INCOME PER SHARE:
Basic & Diluted 0.21 0.19 0.02 11%

NET REALISED EARNINGS PER SHARE:
Basic & Diluted 0.21 0.21 0.00 0%

NET EARNINGS PER SHARE:
Basic & Diluted 0.03 0.23 (0.20) -87%

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic & Diluted 108,364 75,000 33,364 44%

DIVIDENDS DECLARED PER SHARE 0.13 0.00 0.13 NM

Nine Months Ended Nine Months Ended 30 30 30 September 2007

September September Versus 2006
2007 2006

euro %
OPERATING INCOME:
Interest and dividend income 119,256 39,904 79,352 199% Fee and other income 6,103 8,979 (2,876) -32% Total operating income 125,359 48,883 76,476 156% OPERATING EXPENSES:
Interest 27,270 8,999 18,271 203% Management fee and reimbursed expenses 29,684 21,041 8,643 41% Incentive fee 5,115 - 5,115 NM General and administrative 5,573 2,351 3,222 137% Total operating expenses 67,642 32,391 35,251 109% OPERATING INCOME BEFORE INCOME TAXES 57,717 16,492 41,225 250% Provision for income taxes (191) (69) (122) -177% NET OPERATING INCOME 57,526 16,423 41,103 250%

Net foreign currency gains (losses) 2,531 (735) 3,266 444%

Net gains on investments 2,321 202 2,119 NM

TOTAL NET REALISED EARNINGS 62,378 15,890 46,488 293%

Net foreign currency (depreciation) (14,941) (745) (14,196) NM

Net appreciation of investments 8,200 2,362 5,838 247%

INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ("EARNINGS") 55,637 17,507 38,130 218%

NET OPERATING INCOME PER SHARE:
Basic & Diluted 0.62 0.22 0.40 182%

NET REALISED EARNINGS PER SHARE:
Basic & Diluted 0.67 0.21 0.46 219%

NET EARNINGS PER SHARE:
Basic & Diluted 0.60 0.23 0.37 161%

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic & Diluted 92,599 75,000 17,599 23%

DIVIDENDS DECLARED PER SHARE 0.44 0.00 0.44 NM

NM = Not Meaningful

EUROPEAN CAPITAL LIMITED
OTHER FINANCIAL INFORMATION
Three Months Ended 30 September 2007, 31 December 2006 and 30 September 2006
(in thousands, except per share data)
(unaudited)
(all amounts in euros unless otherwise noted)

Q3 Q4 Q3 2007 Versus Q4 2006 2007 2006 euro %

New Investments:
Senior Debt 155,670 185,650 (29,980) -16% Subordinated Debt 212,785 129,740 83,045 64% Preferred Equity 13,441 63,795 (50,354) -79% Common Equity 30,181 14,031 16,150 115% CDO/CLO Investments 16,973 - 16,973 NM Total 429,050 393,216 35,834 9%

European Capital
Sponsored Buyouts 123,040 243,367 (120,327) -49% Financing for Sponsored
Buyouts 184,105 148,091 36,014 24% Direct Investments 95,713 - 95,713 NM Add-on Financing for
Acquisitions 9,219 1,758 7,461 424% Add-on Financing for
Recapitalisations - - - NM CDO/CLO Investments 16,973 - 16,973 NM Total 429,050 393,216 35,834 9%

Realisations:
Senior Loan Syndications 42,048 122,702 (80,654) -66% Principal Prepayments 76,916 30,306 46,610 154% Payment of Accrued
Payment-in-kind Interest
and Dividends and Original
Issue Discount 4,109 - 4,109 NM Sale of Equity Investments - 1,357 (1,357) -100% Total 123,073 154,365 (31,292) -20%

Appreciation, Depreciation,
Gains and Losses:
Gross Gains - 1,345 (1,345) -100% Gross Losses - - - NM Net Gains - 1,345 (1,345) -100%

Gross Appreciation at
7, 2 and 2 Portfolio
Companies 31,191 3,678 27,513 748% Gross Depreciation at
5, 1 and 1 Portfolio
Companies (34,844) - (34,844) NM Current Portfolio
Net Appreciation (3,653) 3,678 (7,331) -199% Net Depreciation From the
Recognition of Net Gains - (402) 402 100% Net (Depreciation)
Appreciation for
Foreign Currency
Translation (16,065) 1,819 (17,884) -983% Net (Losses) Gains for
Foreign Currency
Translation (623) (829) 206 25% Net Gains, Losses,
Appreciation and
Depreciation (20,341) 5,611 (25,952) -463%

Other Financial Data:
Net Asset Value per Share 9.71 9.92 (0.21) -2% Market Capitalisation 938,432 NA NM NM Total Enterprise Value 1,795,107 NA NM NM

Credit Quality:
Weighted Average Effective
Interest Rate on Debt
Investments 12.2% 12.5%
Loans on Non-Accrual
at Face 29,000 - 29,000 100% Loans on Non-Accrual
at Fair Value - - - NM Past Due Loans at Face - - - NM

Past Due and Non-Accrual
Loans at Face as a
Percentage of Total
Loans 2.0% 0.0%
Past Due and Non-Accrual
Loans at Fair Value
as a Percentage of
Total Loans 0.0% 0.0%
Number of Portfolio Companies
on Non-Accrual and Past Due 1 -

Return on Equity:
LTM Net Operating Income
Return on Average
Equity at Cost 9.0% 7.9%
LTM Realised Earnings
Return on Average
Equity at Cost 9.6% 7.9%
LTM Earnings Return
on Average Equity 9.3% 9.5%
Current Quarter Net Operating
Income Return on Average
Equity at Cost Annualised 8.8% 10.1%
Current Quarter Realised
Earnings Return on Average
Equity at Cost Annualised 8.6% 10.4%
Current Quarter Earnings
Return on Average Equity
Annualised 1.1% 13.7%

Dividends:
Dividend Coverage (Realised
Earnings per Basic Share/
Dividend per Share) 1.62x 1.48x

Dividend Payout Ratio
(Dividend per Share/
Realised Earnings per
Basic Share) 0.62x 0.68x

NM = Not Meaningful
NA = Not Applicable

Q3 Q3 2007 Versus Q3 2006 2006 euro % New Investments:
Senior Debt 167,306 (11,636) -7% Subordinated Debt 161,481 51,304 32% Preferred Equity 109,341 (95,900) -88% Common Equity 5,719 24,462 428% CDO/CLO Investments - 16,973 NM Total 443,847 (14,797) -3%

European Capital Sponsored
Buyouts 259,002 (135,962) -52% Financing for Sponsored Buyouts 154,021 30,084 20% Direct Investments - 95,713 NM Add-on Financing for Acquisitions 30,824 (21,605) -70% Add-on Financing for
Recapitalisations - - NM CDO/CLO Investments - 16,973 NM Total 443,847 (14,797) -3%

Realisations:
Senior Loan Syndications 62,391 (20,343) -33% Principal Prepayments 7,182 69,734 971% Payment of Accrued Payment-in-kind
Interest and Dividends and
Original
Issue Discount - 4,109 NM Sale of Equity Investments 1,206 (1,206) -100% Total 70,779 52,294 74%

Appreciation, Depreciation,
Gains and Losses:
Gross Gains - - NM Gross Losses - - NM Net Gains - - NM

Gross Appreciation at 7, 2 and

2 Portfolio Companies 1,903 29,288 NM Gross Depreciation at 5, 1
and 1 Portfolio Companies (745) (34,099) NM Current Portfolio Net
Appreciation 1,158 (4,811) -415% Net Depreciation From the
Recognition of Net Gains - - NM Net (Depreciation) Appreciation
for Foreign Currency
Translation 237 (16,302) NM Net (Losses) Gains for Foreign
Currency Translation 1,406 (2,029) -144% Net Gains, Losses, Appreciation
and Depreciation 2,801 (23,142) -826%

Other Financial Data:
Net Asset Value per Share 6.77 2.94 43% Market Capitalisation NA NM NM Total Enterprise Value NA NM NM Credit Quality:
Weighted Average Effective
Interest Rate on Debt
Investments 11.6%
Loans on Non-Accrual at Face - 29,000 NM Loans on Non-Accrual at
Fair Value - - NM Past Due Loans at Face - - NM Past Due and Non-Accrual Loans
at Face as a Percentage of
Total Loans 0.0%
Past Due and Non-Accrual Loans
at Fair Value as a Percentage
of Total Loans 0.0%
Number of Portfolio Companies
on Non-Accrual and Past Due -

Return on Equity:
LTM Net Operating Income Return
on Average Equity at Cost 2.4%
LTM Realised Earnings Return on
Average Equity at Cost 2.5%
LTM Earnings Return on Average
Equity 2.8%
Current Quarter Net Operating
Income Return on Average
Equity at Cost Annualised 13.0%
Current Quarter Realised
Earnings Return on Average
Equity at Cost Annualised 14.3%
Current Quarter Earnings Return
on Average Equity Annualised 15.6%

Dividends:
Dividend Coverage (Realised
Earnings per Basic Share/
Dividend per Share) NM
Dividend Payout Ratio (Dividend
per Share/Realised Earnings
per Basic Share) NM

NM = Not Meaningful
NA = Not Applicable

EUROPEAN CAPITAL LIMITED
STATIC POOL INFORMATION
Portfolio Statistics for Investments Made in Each of the Following Years (in thousands)
(unaudited)
(all amounts in euros unless otherwise noted)

Portfolio
statistics(1)(9) 2005 2006 2007 Aggregate

Internal Rate of Return

- All Investments(2)(8) 16.3% 13.5% 17.0% 14.8% Internal Rate of Return

- Equity Investments
only(2)(8)(10) 38.3% 21.3% 29.4% 24.5% Original Investments
and Commitments(8) 237,612 1,209,653 1,297,377 2,744,642

Total Exits and
Prepayments of Original
Investments(8) 86,151 526,263 300,711 913,125 Total Interest,
Dividends and Fees
Collected(8) 30,482 79,071 23,988 133,541 Total Net Gains on
Investments 202 3,666 - 3,868 Current Cost of
Investments 163,475 721,193 1,024,371 1,909,041 Current Fair Value
of Investments 174,798 705,294 1,020,855 1,900,947 Net Appreciation
(Depreciation) 11,347 -5,681 7,892 13,558 Non-Accruing Loans
at Face - 29,000 - 29,000 Non-Accruing Loans at
Fair Value - - - - Equity Interest at
Fair Value 29,895 226,667 184,788 441,350 Debt to EBITDA(3)(4) 5.1 6.3 7.4 6.8 Interest Coverage(3) 3.5 2.8 4.1 3.6 Debt Service
Coverage(3) 2.3 2.2 3.4 2.8 Average Age of
Companies 88 years 93 years 37 years 63 years Ownership Percentage 11.2% 31.2% 19.3% 23.1% Average Sales(5) 659,700 442,249 267,310 369,549 Average EBITDA(6) 87,704 62,208 46,164 56,058 Average EBITDA
margin(6) 15.5% 14.7% 17.1% 15.7% Total Sales(5) 4,554,897 15,895,962 13,660,229 34,111,088 Total EBITDA(6) 706,051 2,333,138 2,329,007 5,368,196 % of Senior Loans(7) 10% 23% 38% 30% % of Loans with Lien(7) 100% 100% 100% 100%

(1) Static pool classification is based on the year the initial investment was made. Subsequent add-on investments are included in the static pool year of the original investment.
(2) Assumes investments are exited at current fair value. (3) These amounts do not include investments in which European Capital owns only equity.
(4) For portfolio companies with a nominal EBITDA amount, the portfolio company's maximum debt leverage is limited to 15 times EBITDA. (5) Sales of the most recent twelve months, or when appropriate, the forecasted twelve months.
(6) EBITDA of the most recent twelve months, or when appropriate, the forecasted twelve months.
(7) As a percentage of our total debt investments.
(8) Non euro-denominated amounts are retranslated at the exchange rate ruling at the date of original investment.
(9) Non euro-denominated balances, other than those referred to in (8), are retranslated at the exchange rate ruling at the balance sheet date.
(10) Excludes equity investments that are the
result of conversions of
debt and warrants received with the issuance of debt. A summary of European Capital's dividend history post IPO and forecast follows. For more information, please visit our website at
www.EuropeanCapital.com or call our Investor Relations Department at +44-(0)-20-7539-7100.

EUROPEAN CAPITAL'S DIVIDEND HISTORY POST MAY 2007 IPO (all amounts in euros unless otherwise noted)

% Change of
Dividend Over
Year and Quarter Dividend Prior Period Total

2007 0.37 N/A 0.37 Q4 Guidance 0.14
Q3 0.13
Q2 (IPO = 10 May 2007) 0.10
SHAREHOLDER CALL
European Capital invites shareholders, analysts and other interested persons to attend the European Capital Shareholder Call on Wednesday 7 November 2007 at 14:30 GMT (9:30 EST). The dial in number will be +44-(0)-129-648-0100. Callers within the United States should dial
+1-866-804-8688. The access code for callers is 814911.
Point your browser to www.EuropeanCapital.com and click on the Q3 2007 Shareholder Call Slide Show button.

BEFORE THE CALL:
REVIEW SLIDE PRESENTATION IN ADVANCE OF THE SHAREHOLDER CALL The quarterly shareholder presentation includes a slide presentation to accompany the call that participants may download and print prior to the call. You may wish to take the time to review the slides in advance of the Shareholder Call.

DURING THE CALL:
VIEW STREAMING SLIDE PRESENTATION DURING THE SHAREHOLDER CALL During the Shareholder Call you may watch and
listen to the webcast or
listen to the Shareholder Call by phone and step through the slides at your own pace.

AFTER THE CALL:
LISTEN AND VIEW AUDIO SLIDE PRESENTATION AFTER THE CALL
The audio of the Shareholder Call combined with the slide presentation will be made available after the call on 7 November on our website www.EuropeanCapital.com.

AUDIO ONLY PRESENTATION AVAILABLE AFTER THE SHAREHOLDER CALL: There will be a phone recording available from 23:59 GMT Wednesday 7 November until 23:59 GMT Wednesday 21 November. If you are interested in hearing the recording of the presentation, please dial +44-(0)-800-032-9687 or +44-(0)-207-136-9233. The access code for callers is 18522018.

For further information or questions, please do not hesitate to call our Investor Relations Department at +44-(0)-20-7539-7100.

ABOUT EUROPEAN CAPITAL
European Capital is a publicly traded investment company for pan-European equity, mezzanine and senior debt investments with capital resources of approximately euro 2.3 billion (US$3.3 billion). It is managed by European Capital Financial Services (Guernsey) Limited ("ECFSG" or "the Investment Manager"), a wholly-owned affiliate of American Capital Strategies, Ltd. ("American Capital").
European Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts and provides capital directly to private and public companies headquartered predominantly in Europe. European Capital generally invests between euro 5 million and euro 500 million per transaction in equity, mezzanine debt and senior debt to fund growth, acquisitions and recapitalisations.
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 primarily in Europe. European Capital seeks to achieve this through pursuing the following types of investments:

European Capital One Stop Buyouts(TM)
Through our One Stop Buyouts(TM), European Capital provides equity, mezzanine debt and senior debt as the lead investor in the buyout of private and public companies.

Mezzanine Direct with Sponsors
European Capital provides debt and equity financing for buyouts sponsored by private equity firms where European Capital is either the sole or lead mezzanine debt investor.

Syndicated Mezzanine and Senior Debt
European Capital provides mezzanine and senior financing for buyouts sponsored by private equity firms where European Capital is neither the sole nor lead mezzanine or senior debt investor.

Direct Investments
European Capital provides debt and equity financing directly to private and public companies, which is used for growth, acquisitions or recapitalisations, and investing in structured finance vehicles.

Companies interested in learning more about European Capital's flexible financing should contact Jean Eichenlaub at +33-(0)1-40-68-06-66 in Paris, Simon Henderson or Nathalie Faure Beaulieu at +44-(0)20-7539-7000 in London, Robert von Finckenstein at +49-(0)-69-71-71-297-0 in Frankfurt, or Luis Felipe Castellanos at +34-91-745-99-63 in Madrid, or visit the website at www.EuropeanCapital.com.

ABOUT AMERICAN CAPITAL
American Capital Strategies Ltd. (Nasdaq: ACAS), with US$19 billion in capital resources under management, is an affiliate of European Capital and a member of the S? 500. It is the largest U.S. publicly traded private equity firm and one of the largest publicly traded alternative asset managers. American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalisations and securitisations. American Capital and its affiliates invest from US$5 million to US$800 million per company in North America and euro 5 million to euro 500 million per company in Europe.

IMPORTANT DISCLOSURES
This document may contain "forward-looking statements". By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Many of these risks and uncertainties relate to factors beyond European Capital's control or which cannot be estimated precisely. These Factors include, but are not limited to, uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, and changes in the conditions of the industries in which European Capital has made investments. Actual outcomes and results may therefore differ materially from any outcomes or results expressed or implied by any such forward-looking statements. Performance data quoted above represents past performance of European Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in European Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, European Capital's current performance may be lower or higher than the performance data quoted above.
Nothing in this document is intended to be a profit forecast.

Web site: http://www.EuropeanCapital.com
http://www.americancapital.com

John Erickson, Dir., European Capital Financial Services, Guernsey, +1-301-951-6122, or Tom McHale, Dir., European Capital Financial Services, +1-301-951-6122, or Justin Cressall, Equity Capital Markets, American Capital Strategies Ltd., +1-301-951-6122

dinsdag 6 november 2007