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Precision Auto Care Completes Strategic Deals & Reorganization

26 March 1999

Precision Auto Care Completes Strategic Deals & Company Reorganization To Improve Bottom Line

    LEESBURG, Va., March 25 -- Precision Auto Care, Inc.
today announced that it has successfully completed several
asset sales and refinancing transactions as part of its modified loan
agreement with its senior lender. At the same time, the Company also announced
that it has further streamlined the organization by eliminating three senior
management positions as part of the goal of improving operating results,
according to Charles Dunlap, President and CEO.  "Since the first round of
restructuring which began in November, 1998, the Company has generated savings
of $3 million in annual payroll and operating expenses," said Dunlap.
    In addition to securing an interim bridge loan of $5 million in January,
1999, three additional transactions totalling $5.15 million have been closed
with $4.5 million applied to reducing the Company's debt with its senior
lender and $650,000 going towards the Company's payables and operating
expenses, Dunlap said. The terms of the Company's loan agreement, as it has
been modified recently with its senior lender, also requires the Company to
generate approximately $9 million in proceeds from the sale of assets or real
estate financing transactions no later than April 25, 1999. As such, the
Company is pursuing two remaining transactions in order to satisfy this
condition and expects these transactions will generate $9 million in cash
proceeds.
    Also, in the continuing effort to achieve profitability, the Company
eliminated the positions of Senior Vice President of Legal, International, and
the Executive Vice President of North American Operations. Under this new
organization, Marketing, Franchise Sales, Legal, Operations and International
will report directly to Dunlap.
    "The closing of these transactions significantly improves our position
with our senior lender and increases our cash flow," Dunlap explained. "The
organizational restructuring will significantly reduce costs and provide for a
more responsive management structure. Our plan to restructure our debt and
improve cash flow is progressing."
    Precision Auto Care, Inc. is the world's largest franchisor of auto care
centers, with 645 operating centers as of March 25, 1999.  The Company
franchises and operates Precision Tune Auto Care, Precision Auto Wash, and
Precision Lube Express centers around the world.
    Cautionary Statement:  The statements in this press release constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements are subject to risks and uncertainties that could cause
Precision Auto Care Inc.'s actual results, performance or achievements to
differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements.  Such risks and
uncertainties include, but are not limited to, (i) the risks and uncertainties
reflected and set forth in the text of this press release, (ii) the fact that
Precision Auto Care Inc. and the companies it acquired on and subsequent to
the date of its initial public offering have only recently conducted
operations as a combined company, (iii) the seasonal nature of portions of the
business, (iv) the highly competitive markets in which Precision Auto Care
Inc. operations, (v) difficulties in integrating all of the businesses
Precision Auto Care Inc. has acquired, (vi) risks associated with Precision
Auto Care Inc.'s ability to continue its strategy of growth through
acquisitions and (vii) risks associated with Company's ability to make or
effect acquisitions in the future and to successfully integrate newly-acquired
businesses into existing operations and the risks associated with such newly-
acquired businesses.  For a discussion of such risks and uncertainties which
could cause actual results, performance or achievements to differ from those
contained in the forward-looking statements, see "Risk Factors" in the
Company's Annual Report on Form 10-K for the most recently ended fiscal year.