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Danka Announces Reclassification Of Senior Debt

Press release from the issuing company

ST. PETERSBURG, FL., January 25, 2001 - Danka Business Systems PLC today announced that it will release its third quarter earnings and financial statements for the period ended December 31, 2000 on February 1, 2001. The Company will be reflecting its approximately $551 Million Senior Notes (the "Senior Debt") outstanding as a current liability on its December 31, 2000, third quarter balance sheet. At that time, the Company will also be amending its second quarter Form 10-Q to reflect the same classification of its $546 million Senior Debt on its September 30, 2000, balance sheet. The balance sheet reclassifications are necessary since, absent further amendments to the Credit Agreement, the Company's Senior Debt could be declared due within one year of the respective balance sheet dates. These classifications will have no impact on the Company's earnings in its Fiscal Year 2001 second or third quarters, nor will this classification result in the violation of any covenants contained in the Company's Senior Credit Facility Agreement ("Credit Agreement") and amendments thereto. As the Company previously announced, it obtained an Amendment to its Credit Agreement through March 28, 2001, modifying certain covenants under the Credit Agreement, which expires March 31, 2002. Danka's Chief Executive Officer, Michael Gifford, stated, "We believe this technical requirement with respect to the classification of the Senior Debt will have no material impact on the Company's earnings or operations. As I previously stated, our bank lenders continue to work with the Company while we implement our various restructuring initiatives. We are continuing discussions with our banks and Danka's other constituencies with a view to creating a long-term solution to the Company's financing needs."