Heller seeking bankruptcy protection

Administrators Appointed to Humbrol Ltd

PRESS RELEASE

31 August 2006

Keith Hinds and Joe McLean from accountants Grant Thornton in Leeds were appointed Administrators on (30 August 2006) to Hull based Humbrol Ltd, the owner of the famous modelling brands Airfix and Humbrol.

The Company, a distributor of model and hobby products, had suffered trading losses for several years.

A new management team brought in during December 2005 to restructure the business finally had to call a halt to matters following severe cash flow pressures and disruption to supplies brought about by the insolvency of its principal manufacturing supplier Heller SA in France.

Following an emergency review of the business the Administrators have today made 31 redundancies out of a total workforce of 41.

Keith Hinds, Administrator, said that: "As a consequence of the uncertainty of product supply, deliveries to customers are being limited to despatches from current stock lines and ongoing trading is extremely restricted. These redundancies are unfortunately the inevitable consequence of the circumstances faced by the Company."

He went on to add that 'the brand names and intellectual property of the business was potentially very valuable' and that he was 'looking to sell these to a potential investor who may be able to invest in and develop these iconic brands.'

Note to editors:

1. Keith Hinds and Joe McLean of Grant Thornton UK LLP appointed Administrators on 30th
   of August 2006.

2. Humbrol Ltd is the principal trading business of the Hobby Products Group Ltd, which is also in administration.

3. Group turnover approximately £10 million per annum.

4. Brand names include Airfix, Humbrol, Plasticine, Supercast and Young Scientist.

5. Business dates back to the Humbrol Oil Company which started in 1919 and the Airfix brand was introduced in 1949.

6. Heller SA was once a fellow subsidiary of the Hobby Products Group and as part of an earlier
   restructuring was sold to a separate management buyout team in May 2005.

7. Heller SA went in to the French equivalent of Administration (Redressement Judiciare) on
   21st July 2006.
   
   

It has been confirmed today that Airfix have followed Heller into Administration, apparently they cannot get access to the kit moulds which are under the control of the French Administrator. The Airfix Administrator intends to contact his French counterpart to see if stock can be tranferred, and in the meantime supply is apparently available only from current stock.

While I've never been a huge fan of Heller kits, it is sad to see another large company go the route of the dinosaur.

I'll bet that if they do go through with the BR. The remaining kits will flood ebay. Hopefull someone will pick up their molds, Probally some asian firm.

Jake