European Capital

European Capital Declares euro 0.15 Q2 2008 Dividend, Reports euro 0.24 NOI and euro 0.32 Realised Earnings In Q1 2008

St. Peter Port, Guernsey (ots/PRNewswire) - European Capital Limited ("European Capital") (LSE: ECAS) announced today its second quarter 2008 dividend and its results for the first quarter of 2008.

SECOND QUARTER 2008 DIVIDEND DECLARATION

European Capital's Board of Directors has declared a second quarter 2008 dividend of euro 0.15 per share to record holders as of 27 June 2008, payable on 25 July 2008. This is a 50% increase over the second quarter 2007 dividend of euro 0.10 per share and is in line with the dividend guidance announced at the time of its results announcement for 2007. European Capital has now paid or declared a total of euro 72.6 million in dividends since its May 2007 initial public offering ("IPO").

2008 DIVIDEND GUIDANCE

European Capital reiterates its 2008 dividend forecast of euro 0.62 per share, a 68% growth over post-IPO 2007 dividends of euro 0.37 per share. The remaining 2008 dividends per share are forecast to be in the following quarterly amounts.

euro 0.16 for Q3 2008, 23% increase over Q3 2007; and euro 0.16 for Q4 2008, 14% increase over Q4 2007.

FIRST QUARTER 2008 RESULTS

Net Operating Income (NOI) European Capital also announced today its results for the first quarter of 2008. NOI for the quarter increased 4% to euro 0.24 per share, compared to euro 0.23 per share for the first quarter of 2007.

Realised Earnings

Realised Earnings increased 19% to euro 0.32 per share for the first quarter of 2008, compared to euro 0.27 per share for the first quarter of 2007. Realised Earnings return on equity at cost for the twelve months to the first quarter of 2008 was 11%. Realised Earnings for the first quarter 2008 covered 213% of the euro 0.15 per share dividend for the first quarter 2008.

Earnings

European Capital's Earnings for the first quarter of 2008 was a loss of euro 1.49 per share, a decrease of euro 1.85 per share from the first quarter of 2007 Earnings of euro 0.36 per share. Earnings return on equity for the twelve months to the first quarter of 2008 was (13)%. This loss was due to euro 165 million of unrealised depreciation during the first quarter of 2008. During the first quarter, European Capital implemented Statement of Financial Accounting Standard No. 157, Fair Value Measurements, ("SFAS 157"), new principles-based guidance to US generally accepted accounting practices ("GAAP"), which caused certain changes to the methodologies used in valuing the Company's investments.

European Capital's net asset value ("NAV") per share at 31 March 2008 was euro 8.03, a decrease of euro 1.64 or 17% lower than the 31 December 2007 NAV per share of euro 9.67.

"We delivered excellent NOI and Realised Earnings for the quarter." said Malon Wilkus, Chairman of the Board. "The substantial decline in our Earnings is due to euro 165 million of unrealised depreciation, which we believe will have little impact on our future revenues, NOI and Realised Earnings. This depreciation was driven by declining trading prices, the continued widening of investment spreads and our adoption of SFAS 157. We believe that with the adoption of SFAS 157, investors will need to focus on both reported US GAAP fair values as well as values that we anticipate realising on settlement or maturity of our investments ("Realisable Value"). In the future, we intend to report the anticipated Realisable Values on settlement or maturity of our investments as well as US GAAP values so investors can consider both."

For the first quarter of 2008, net appreciation, depreciation, gains and losses totalled euro (187) million consisting of euro 9 million of net realised gains less euro 196 million of net depreciation, compared to euro 10 million of net appreciation, depreciation, gains and losses for the first quarter of 2007. The primary components of the euro 196 million of net depreciation for the quarter were as follows:

    -- euro 102 million of depreciation associated with the adoption of SFAS
       157, including the widening of investment spreads;
    -- euro 51 million of depreciation associated with the write down of
       Private Finance investments;
    -- euro 10 million of depreciation from its Structured Products, due to
       the continuing widening of investment spreads;
    -- euro 21 million of net depreciation from foreign currency translation;
    -- euro 10 million of reversals of prior foreign currency appreciation
       associated with realised gains; and
    -- euro 2 million of net depreciation on derivatives. 

"Credit quality remains good in light of the economic environment," stated John Erickson, Director of European Capital Financial Services (Guernsey) Limited. "Most of the depreciation this quarter was not as a result of weakening credit as non-accruing loans at fair value remained within a reasonable level of 0.3% of total loans at fair value. While the European economy may be slowing, we believe we are in the later stages of the liquidity crisis. We are seeing bids for some assets starting to tighten in the second quarter and today it looks like March may have been the low point for wide spreads and asset depreciation though we will need to see the trend continue in order to know for certain."

In the first quarter of 2008, European Capital invested euro 168 million and received euro 115 million of proceeds from realisations of portfolio investments.

As of 31 March 2008, loans with a fair value of euro 4 million were on non-accrual representing 0.3% of total loans at fair value as of 31 March 2008, compared to no non-accrual loans at fair value as of 31 December 2007.

"M&A volumes declined in the first quarter but high quality companies continue to come to market even in this somewhat tighter lending environment," said Ira Wagner, President of European Capital Financial Services Limited ("ECFS"). "However, debt capital continues to be available for middle market transactions. As the M&A market reflects slower world growth and a U.S. recession, we believe there will be great opportunities for our UK and continental European One-Stop Buyouts."

Since inception, European Capital has earned a 15% compounded annual return, including interest, dividends, fees and net gains, on 29 realisations of senior debt, subordinated debt and equity investments, totalling euro 1.2 billion of committed capital. These realisations represent 35% of all amounts invested by European Capital since inception.

"Over the past several months, numerous firms have been forced to issue dilutive equity in order to fix their balance sheets," stated Tom McHale, Director, ECFS. "We have continued to have access to the capital markets, most recently issuing euro 267 million of AAA-rated secured floating rate notes, backed by euro 486 million in loans originated by European Capital. This was one of the few asset securitisations completed on European markets this year and we are pleased to have been able to arrange this financing given the current liquidity crunch."

During the first quarter, European Capital was also required to adopt Statement of Financial Accounting Standard No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which gave the Company the option to fair value its financial liabilities in its financial statements. European Capital did not elect the fair value option for any of its eligible financial liabilities. However, European Capital will begin providing its shareholders with supplemental information on the fair value of its financial liabilities. The cost basis and fair value of European Capital's financial liabilities as of 31 March 2008 were euro 949 million and euro 918 million, respectively, or a positive difference of euro 31 million.

MATERIAL DIFFERENCES BETWEEN FAIR VALUE AND REALISABLE VALUE

European Capital believes that approximately euro 110 million of the depreciation reflected in the results of this and prior quarters will ultimately be reversed when it exits the investments. European Capital invests primarily in illiquid assets, which are referred to in SFAS 157 as level 3 assets, with the intention to hold the assets to settlement or maturity. This is in contrast to the premise under US GAAP that assets generally should be valued on the basis of their current market value and, if no or limited market exists, on a hypothetical market value. European Capital has not historically sold its investment assets on a market. Instead it has typically settled its private finance investments at the time of a change of control transaction, such as through a sale or recapitalisation of its portfolio companies.

The current lack of liquidity in the financial markets has caused investment spreads between the cost of funds and investment income to widen dramatically on investments, which in most cases results in current fair values that are materially lower than the Company anticipates realising on settlement or maturity.

The Company is following US Regulatory Disclosures regarding SFAS 157 that allows it to disclose material differences between US GAAP fair value and values anticipated to be realised upon settlement or maturity (Realisable Value). Because European Capital believes its US GAAP fair values diverge materially from the amounts it anticipates to realise on settlement or maturity, the Company will begin to provide pro forma information on the Realisable Value of its assets in comparison to the fair value determined under US GAAP.

The following table summarises the current cost basis and fair value of our investments as of 31 March 2008 and the amount we currently anticipate realising on settlement or maturity:

                                                                   Difference
                                                                    Between
                                                                   Realisable
                                                                    Value and
                                       Net                           US GAAP
     Asset     Cost   Net Apprec./  Currency  Fair Value  Realisable  Fair
     Class     Basis   (Deprec.)     Movement  US GAAP     Value(1)   Value
              (euro)     (euro)      (euro)    (euro)      (euro)     (euro)
    Private
     Finance   1,995     (145)         (109)     1,741       1,841      100
    Structured
     Product      24      (10)            -         14          24       10
    Derivatives    1       (1)            8          8           8        -
      Total    2,020     (156)         (101)     1,763       1,873      110
    (1) Realisable Value is a non-GAAP financial measure that is the future
        value that we anticipate realising on the settlement or maturity of
        our investments. 

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 a designated percentage of fair value determinations. Houlihan Lokey is a leading valuation firm engaged in over 1,000 valuation assignments per year for clients worldwide. Each quarter, Houlihan Lokey reviews approximately one quarter of European Capital's determination of the fair value of its portfolio company investments that have been portfolio companies for at least one year and that have a fair value in excess of euro 10 million, in accordance with European Capital's valuation procedures. In the first quarter of 2008, Houlihan Lokey reviewed valuations of 23 portfolio company investments having an aggregate euro 781 million in fair value as of the period end. In addition, Houlihan Lokey representatives attend European Capital's quarterly valuation meetings and provide quarterly 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 and in accordance with European Capital's valuation procedures, 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.

    Financial highlights for the quarter are as follows:
                           EUROPEAN CAPITAL LIMITED
                         CONSOLIDATED BALANCE SHEETS
                   As of 31 March 2008 and 31 December 2007
                    (in thousands, except per share data)
                                                              31 March 2008
                                     31 March   31 December       Versus
                                       2008        2007      31 December 2007
                                    (unaudited)
                                       euro        euro        euro        %
    Assets
    Investments at fair value (Cost
     basis of euro 2,020,116 and
     euro 1,968,468, respectively)   1,762,681   1,925,696    (163,015)   -8%
    Cash and cash equivalents           39,741       2,575      37,166     NM
    Restricted cash                     20,082      30,214     (10,132)  -34%
    Other                               19,699       9,558      10,141   106%
        Total assets                 1,842,203   1,968,043    (125,840)   -6%
    Liabilities and Shareholders'
     Equity
    Debt (maturing within one year
     euro 582,114 and euro 793,237,
     respectively)                     948,582     896,157      52,425     6%
    Due to European Capital
     Financial Services (Guernsey)
     Limited                             3,616         718       2,898   404%
    Accrued dividends payable           16,255      15,171       1,084     7%
    Other                                3,666       8,377      (4,711)  -56%
        Total liabilities              972,119     920,423      51,696     6%
    Commitments and contingencies
    Shareholders' equity:
      Ordinary shares (nil par
       value, authorised to issue
       unlimited number of shares,
       108,364 issued and
       outstanding, 2007: 108,364)           -   1,030,888  (1,030,888) -100%
      Other reserve                  1,030,888           -   1,030,888     NM
      Undistributed net realised
       earnings                         55,614      37,235      18,379    49%
      Net foreign currency
       (depreciation) appreciation     (59,823)    (28,391)    (31,432) -111%
      Net (depreciation)
       appreciation of investments    (156,595)      7,888    (164,483)    NM
        Total shareholders' equity     870,084   1,047,620    (177,536)  -17%
        Total liabilities and
         shareholders' equity        1,842,203   1,968,043    (125,840)   -6%
    NM = Not Meaningful
                           EUROPEAN CAPITAL LIMITED
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  Three Months Ended 31 March 2008 and 2007
                    (in thousands, except per share data)
                                        Three Months Ended Three Months Ended
                                            31 March            31 March
                                          2008      2007     2008 Versus 2007
                                       (unaudited)(unaudited)
                                           euro      euro        euro     %
    OPERATING INCOME:
    Interest and dividend income          53,447     34,282     19,165    56%
    Fee and other income                     320      3,290     (2,970)  -90%
        Total operating income            53,767     37,572     16,195    43%
    OPERATING EXPENSES:
    Interest                              16,029      6,940      9,089   131%
    Management fee and reimbursed
     expenses                              9,421     11,366     (1,945)  -17%
    Incentive fee                              -          -          -      -
    General and administrative             2,152      1,530        622    41%
        Total operating expenses          27,602     19,836      7,766    39%
    OPERATING INCOME BEFORE INCOME TAXES  26,165     17,736      8,429    48%
    Provision for income taxes               (81)      (144)        63   -44%
    NET OPERATING INCOME                  26,084     17,592      8,492    48%
    Net foreign currency gains             8,576      2,286      6,290   275%
    Net loss on investments                  (26)         -        (26)    NM
    TOTAL NET REALISED EARNINGS           34,634     19,878     14,756    74%
    Net foreign currency depreciation    (31,432)    (3,782)   (27,650) -731%
    Net (depreciation) appreciation of
     investments                        (164,483)    11,013   (175,496)    NM
    (DECREASE) INCREASE IN NET ASSETS
     RESULTING FROM OPERATIONS
     ("EARNINGS")                       (161,281)    27,109   (188,390) -695%
    NET OPERATING INCOME PER SHARE:
      Basic & Diluted                       0.24       0.23       0.01     4%
    NET REALISED EARNINGS PER SHARE:
      Basic & Diluted                       0.32       0.27       0.05    19%
    NET EARNINGS PER SHARE:
      Basic & Diluted                      (1.49)      0.36      (1.85) -514%
    WEIGHTED AVERAGE NUMBER OF SHARES
     OUTSTANDING:
      Basic                              108,364     75,000     33,364    44%
      Diluted                            108,364     75,714     32,650    43%
    DIVIDENDS DECLARED PER SHARE            0.15       0.21      (0.06)  -29%
    NM = Not Meaningful 
                        EUROPEAN CAPITAL LIMITED
                      OTHER FINANCIAL INFORMATION
    Three Months Ended 31 March 2008, 31 December 2007 and 31 March 2007
                  (in thousands, except per share data)
                             (unaudited)
                                         Q1         Q4         Q1 2008 Versus
                                        2008       2007            Q4 2007
                                        euro       euro        euro       %
    New Investments:
      Senior Debt                       1,035      25,000    (23,965)    -96%
      Subordinated Debt               164,037     149,937     14,100       9%
      Preferred Equity                  3,072       3,263       (191)     -6%
      Common Equity                       115       1,775     (1,660)    -94%
      CDO/CLO Investments                   -           -          -       NM
        Total                         168,259     179,975    (11,716)     -7%
      European Capital
       Sponsored Buyouts                    -           -          0     100%
      Financing for Sponsored
       Buyouts                        152,949     178,625    (25,676)    -14%
      Direct Investments                    -           -          -       NM
      Add-on Financing for
       Acquisitions                    14,000       1,350     12,650     937%
      Add-on Financing for
       Recapitalisations                1,310           -      1,310       NM
        Total                         168,259     179,975    (11,716)     -7%
    Realisations:
      Senior Loan Refinancings              -      40,000    (40,000)   -100%
      Principal Prepayments            83,580      68,218     15,362      23%
      Payment of Accrued
       Payment-in-kind Interest
       and Dividends and Original
       Issue Discount                   6,503       3,304      3,199      97%
      Sale of Equity Investments       24,664           -     24,664     100%
        Total                         114,747     111,522      3,225       3%
    Appreciation,
     Depreciation, Gains and
     Losses:
      Gross Losses                        (26)          -        (26)      NM
        Portfolio Loss                    (26)          -        (26)      NM
      Net Gains for Foreign
       Currency Translation             8,576          46      8,530       NM
        Total Gains and Losses          8,550          46      8,504       NM
      Gross Appreciation at 8, 7
       and 6 Portfolio Companies       19,683      18,819        864       5%
      Gross Depreciation at 42,
       7 and 1 Portfolio Companies   (184,166)    (24,769)  (159,397)   -644%
        Current Portfolio Net
         (Depreciation)
         Appreciation                (164,483)     (5,950)  (158,533)      NM
      Net Depreciation for Foreign
       Currency Translation           (31,432)    (13,782)   (17,650)   -128%
        Total (Depreciation)
         Appreciation                (195,915)    (19,732)  (176,183)     (9)
        Net Gains, Losses,
         Appreciation and
         Depreciation                (187,365)    (19,686)  (167,679)     (9)
    Other Financial Data:
        Net Asset Value per Share        8.03        9.67      (1.64)    -17%
        Market Capitalisation         653,435     756,381         NA       NA
        Total Enterprise Value      1,562,276   1,649,963         NA       NA
      Credit Quality:
        Weighted Average Effective
         Interest Rate on Debt
         Investments                    12.6%       12.7%
        Loans on Non-Accrual at Cost  21,165      29,875      (8,710)      NM
        Loans on Non-Accrual at Fair
         Value                         4,290           -       4,290       NM
        Past Due Loans at Cost             -           -           -       NM
        Past Due and Non-Accrual
         Loans at Cost as a
         Percentage of Total Loans       1.3%        1.9%
        Past Due and Non-Accrual
         Loans at Fair Value as a
         Percentage of Total Loans       0.3%        0.0%
        Number of Portfolio
         Companies on Non-Accrual
         and Past Due                      1           1
      Return on Equity:
        LTM Net Operating Income
         Return on Average Equity
         at Cost                         9.7%        9.4%
        LTM Realised Earnings
         Return on Average Equity
         at Cost                        10.8%        9.9%
        LTM Earnings Return on
         Average Equity                -12.8%        7.0%
        Current Quarter Net
         Operating Income Return on
         Average Equity at Cost
         Annualised                     10.1%       11.2%
        Current Quarter Realised
         Earnings Return on Average
         Equity at Cost Annualised      13.4%       11.2%
        Current Quarter Earnings
         Return on Average Equity
         Annualised                    -67.3%        3.7%
      Dividends:
        Dividend Coverage (Realised
         Earnings per Basic Share/
         Dividend per Share)            2.13 x      1.93 x
        Dividend Payout Ratio
         (Dividend per Share/
         Realised Earnings per
         Basic Share)                   0.47 x      0.52 x
                                               Q1           Q1 2008 Versus
                                              2007              Q1 2007
                                              euro           euro         %
    New Investments:
      Senior Debt                            118,539       (117,504)    -99%
      Subordinated Debt                      138,016         26,021      19%
      Preferred Equity                         8,477         (5,405)    -64%
      Common Equity                            1,733         (1,618)    -93%
      CDO/CLO Investments                          -            -         NM
        Total                                266,765        (98,506)    -37%
      European Capital Sponsored Buyouts     254,681       (254,681)   -100%
      Financing for Sponsored Buyouts              -        152,949       NM
      Direct Investments                           -            -         NM
      Add-on Financing for Acquisitions       12,084          1,916      16%
      Add-on Financing for
       Recapitalisations                           -          1,310       NM
        Total                                266,765        (98,506)    -37%
    Realisations:
      Senior Loan Refinancings                61,479        (61,479)   -100%
      Principal Prepayments                   88,765         (5,185)     -6%
      Payment of Accrued Payment-in-kind
       Interest and Dividends and
       Original Issue Discount                 5,667            836      15%
      Sale of Equity Investments               6,983         17,681     253%
        Total                                162,894        (48,147)    -30%
    Appreciation, Depreciation, Gains
     and Losses:
      Gross Losses                                 -            (26)      NM
        Portfolio Loss                             -            (26)      NM
      Net Gains for Foreign Currency
       Translation                             2,286          6,290     275%
        Total Gains and Losses                 2,286          6,264     274%
      Gross Appreciation at 8, 7 and 6
       Portfolio Companies                    11,899          7,784      65%
      Gross Depreciation at 42, 7 and 1
       Portfolio Companies                      (886)      (183,280)      NM
        Current Portfolio Net
         (Depreciation) Appreciation          11,013       (175,496)      NM
      Net Depreciation for Foreign
       Currency Translation                   (3,782)       (27,650)   -731%
        Total (Depreciation) Appreciation      7,231       (203,146)      NM
        Net Gains, Losses,
         Appreciation and Depreciation         9,517       (196,882)      NM
         Other Financial Data:
        Net Asset Value per Share              10.07          (2.04)    -20%
        Market Capitalisation                     NA             NA       NA
        Total Enterprise Value                    NA             NA       NA
      Credit Quality:
        Weighted Average Effective
         Interest Rate on Debt Investments     12.7%
        Loans on Non-Accrual at Cost               -         21,165       NM
        Loans on Non-Accrual at Fair Value         -          4,290       NM
        Past Due Loans at Cost                     -              -       NM
        Past Due and Non-Accrual Loans at
         Cost 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                 9.8%
        LTM Realised Earnings Return on
         Average Equity at Cost                10.4%
        LTM Earnings Return on Average
         Equity                                12.9%
        Current Quarter Net Operating
         Income Return on Average Equity at
         Cost Annualised                        9.5%
        Current Quarter Realised Earnings
         Return on Average Equity at Cost
         Annualised                            10.7%
        Current Quarter Earnings Return on
         Average Equity Annualised             14.5%
      Dividends:
        Dividend Coverage (Realised
         Earnings per Basic Share/Dividend
         per Share)                             1.29 x
        Dividend Payout Ratio (Dividend
         per Share/Realised Earnings per
         Basic Share)                           0.78 x 
                           EUROPEAN CAPITAL LIMITED
                           STATIC POOL INFORMATION
    Portfolio Statistics for Investments Made in Each of the Following Years
                               (in thousands)
    Portfolio
     statistics(1)(10)(12)     2005       2006       2007     2008  Aggregate
    Internal Rate of Return
     - All Investments(2)(9)  16.0%       9.4%      11.2%    13.2%      11.1%
    Internal Rate of Return
     - All Investments(3)(9)
                              16.0%       5.8%       2.9%    11.6%       6.6%
    Internal Rate of Return
     - Equity Investments
     only(3)(9)(11)
                              33.7%       7.3%     (4.4)%  (33.4)%       6.3%
    Original Investments
     and Commitments(9)     237,612  1,211,837  1,487,669  152,820  3,089,938
    Total Exits and
     Prepayments of Original
     Investments(9)
                            118,833    659,763    354,027        -  1,132,623
    Total Interest,
     Dividends and Fees
     Collected(9)            41,179    113,080     72,467    1,725    228,451
    Total Net Gains on
     Investments                202      3,666          -        -      3,868
    Current Cost of
     Investments            131,080    598,990  1,157,311  132,607  2,019,988
    Current Fair Value of
     Investments            143,996    466,608  1,016,300  127,867  1,754,771
    Net Appreciation
     (Depreciation)(13)      12,930   (85,240)   (82,423)    (983)  (155,716)
    Non-Accruing Loans at
     Cost                         -     21,165          -        -     21,165
    Non-Accruing Loans at
     Fair Value                   -      4,290          -        -      4,290
    Equity Interest at Fair
     Value                   31,933    165,941    153,223    7,074    358,171
    Debt to EBITDA(4)(5)        5.3        5.7        6.2      6.2        6.0
    Interest Coverage (4)       2.7        2.6        4.0      2.3        3.4
    Debt Service
     Coverage(4)                1.8        2.1        3.1      2.3        2.7
    Average Age of
     Companies            128 years   88 years   44 years 23 years   60 years
    Ownership Percentage      14.4%      34.0%      13.9%     2.0%      18.4%
    Average Sales(6)        311,383    542,402    295,500  170,945    354,232
    Average EBITDA(7)        53,519     76,071     52,440   26,737     57,090
    Average EBITDA
     margin(7)                19.1%      14.8%      17.0%    16.9%      16.1%
    Total Sales(6)        2,502,168 16,183,809 16,601,779  583,045 35,870,800
    Total EBITDA(7)         477,548  2,395,909  2,817,436   98,439  5,789,332
    % Senior Loans(8)          3.0%      22.2%      33.9%     0.0%      25.8%
    % Loans with Lien(8)     100.0%     100.0%     100.0%   100.0%     100.0%
    (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 based on Realisable Value that is
         anticipated to be received upon settlement or maturity
    (3)  Assumes investments are exited at current US GAAP fair value.
    (4)  These amounts do not include investments in which we own only
         equity.
    (5)  For portfolio companies with a nominal EBITDA amount, the portfolio
         company's maximum debt leverage is limited to 15 times EBITDA.
    (6)  Sales of the most recent twelve months, or when appropriate, the
         forecasted twelve months.
    (7)  EBITDA of the most recent twelve months, or when appropriate, the
         forecasted twelve months.
    (8)  As a percentage of our total debt investments.
    (9)  Non euro-denominated amounts are retranslated at the exchange rate
         ruling at the date of original investment.
    (10) Non euro-denominated balances, other than those referred to in (9),
         are retranslated at the exchange rate ruling at the balance sheet
         date.
    (11) Excludes equity investments that are the result of conversions of
         debt and warrants received with the issuance of debt.
    (12) Excludes derivative instruments.
    (13) Balance Sheet appreciation (depreciation) of investments excluding
         foreign exchange revaluation. 

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)207-539-7100.

                                       % Change of               % Change of
                                     Regular Dividend          Total Dividend
                                       Over Prior                Over Prior
    Year and Quarter       Dividend       Year         Total         Year
                            (euro)                     (euro)
    Total 2007 to Q2 2008                               0.67
    2008                     0.62          68%          0.62          68%
    Q4 FORECAST              0.16          14%
    Q3 FORECAST              0.16          23%
    Q2 DECLARED              0.15          50%
    Q1                       0.15          N/A
    2007                     0.37          N/A          0.37          N/A
    Q4                       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 14 May at 14:30 BST (9:30 EST). Callers within the UK can dial +44(0)800-62-66-06. Other callers from within Europe should dial +44(0)129-648-0100. Callers within the United States should dial +1-866-804-8688. The access code for callers is 386 589.

Point your browser to www.EuropeanCapital.com and click on the Q1 2008 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 14 May on our website www.EuropeanCapital.com.

AUDIO ONLY PRESENTATION AVAILABLE AFTER THE SHAREHOLDER CALL:

There will be a phone recording available from 1:00 BST Thursday 15 May until 1:00 BST Wednesday 28 May. 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 65497516.

For further information or questions, please do not hesitate to call our Investor Relations Department at +44(0)207-539-7100 or send an email to IR@EuropeanCapital.com.

ABOUT EUROPEAN CAPITAL

European Capital is a publicly traded investment company for pan-European equity, mezzanine and senior debt investments with current capital resources of approximately euro 2.8 billion (US$4.4 billion). It is managed by European Capital Financial Services (Guernsey) Limited ("ECFSG"), an indirect wholly-owned affiliate of American Capital Strategies Ltd. ECFSG, together with its wholly owned subsidiary European Capital Financial Services Ltd ("ECFS"), is referred to as the "Investment Manager". ECFS has offices in Paris, London, Frankfurt and Madrid. As of 31 March 2008 the Investment Manager had 44 investment professionals and 66 support staff.

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 primarily 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 Nathalie Faure Beaulieu at +44(0)20-7539-7000 in London, Jean Eichenlaub at +33(0)1-40-68-06-66 in Paris, Robert von Finckenstein at +49(0)69-71-71-297-0 in Frankfurt, or Luis Felipe Castellanos at +34-91-423-27-60 in Madrid, or visit the website at www.EuropeanCapital.com.

ABOUT AMERICAN CAPITAL

American Capital is the only private equity fund and alternative asset management company that is a member of the S&P 500. With US$19 billion in capital resources under management, American Capital is the largest U.S. publicly traded alternative asset manager.

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

Contact:

John Erickson, Dir., European Capital Financial Services (Guernsey)
Limited, +1-301-951-6122, or Tom McHale, Dir., European Capital
Financial Services Limited, +1-301-951-6122, or Justin Cressall,
Equity Capital Markets, European Capital Financial Services Limited,
+1-301-951-6122

Original-Content von: European Capital, übermittelt durch news aktuell

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