For release: IMMEDIATELY For additional information contact: Richard G. Johnson, Chief Financial Officer (201) 329-7300 PHIBRO ANIMAL HEALTH CORPORATION ANNOUNCES REDEMPTION OF SERIES C PREFERRED STOCK FROM PALLADIUM Rid

For release: IMMEDIATELY

For additional information contact: Richard G. Johnson, Chief Financial Officer (201) 329-7300

PHIBRO ANIMAL HEALTH CORPORATION ANNOUNCES REDEMPTION OF SERIES C PREFERRED STOCK FROM

Ridgefield Park, New Jersey, February 28, 2005 Phibro Animal Health Corporation (the

Company ), announced today the consummation of the redemption of its Series C Preferred Stock, all

of which was held by Palladium Equity Partners II LP and certain of its affiliates, for $26.4

million. The funds used for such redemption were contributed to the capital of the Company by PAHC

Holdings Corporation ( PAHC Holdings ), a holding company for the capital stock of the Company

recently formed by certain of the shareholders of the Company. On February 10, 2005, PAHC Holdings

successfully completed a private offering of $29 million of its senior secured notes due 2010

( HoldCo Notes ). The proceeds from the sale of the HoldCo Notes have been held in escrow to

finance the redemption.

PAHC Holdings was formed by Jack Bendheim, Marvin S. Sussman and trusts for the benefit of Mr.

Bendheim and his family. PAHC Holdings now owns all of the outstanding capital stock of all

classes of the Company, and Mr. Bendheim, Mr. Sussman and trusts for the benefit of Mr. Bendheim s

family own the same number and class of shares of PAHC Holdings as they previously owned of the

Company, and having the same designations, relative rights, privileges and limitations as the

Company s shares of such class.

The HoldCo Notes are secured by all of PAHC Holding s assets (now consisting substantially of

all of the outstanding capital stock of the Company). The HoldCo Notes and such security interest

are effectively subordinated to all liabilities, including the Company s and its subsidiaries

trade payables, as well the Company s indenture indebtedness. Interest on the HoldCo Notes is

payable at the option of PAHC Holdings in cash or pay-in-kind HoldCo Notes. The Company is not

obligated on the HoldCo Notes.

In connection with the redemption, the Company, PAHC Holdings, the Palladium investors and the

principal stockholders of PAHC Holdings entered into an agreement with respect to (1) the

redemption price (consisting of $19.6 million of liquidation preference and $6.8 million of equity

value), (2) amending the terms of the post-redemption redemption price adjustment set forth in the

certificate of incorporation of the Company (A) from an amount payable upon the occurrence of

certain capital stock transactions determined with respect to the value of the Company upon the

occurrence of such capital stock transaction, to a liquidated amount of $4 million, payable only

after the occurrence of certain capital stock transactions and the receipt by the current

stockholders of PAHC Holdings, on a cumulative basis, of an aggregate of $24 million of dividends

and distributions in respect of such capital stock transactions, and (B) to remove the one-year

time period for such adjustment of the redemption price, and (3) eliminating the backstop

indemnification obligation of the Company to the Palladium investors of up to $4 million incurred

in connection with the sale by the Company to the Palladium investors in December 2003 of The

Prince Manufacturing Company.

The Company is a leading diversified global manufacturer and marketer of a broad range of

animal health and nutrition products, specifically medicated feed additives ( MFAs ) and

nutritional feed additives, which the Company sells throughout the world predominantly to the

poultry, swine and cattle markets. MFAs are used preventively and therapeutically in animal feed

to produce healthy livestock. The Company is also a specialty chemicals manufacturer and marketer,

serving numerous markets.

Forward-Looking Statements

This news release contains statements that, to the extent that they are not recitations of

historical fact, constitute forward-looking statements within the meaning of the Private

Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934. Such

forward-looking information involves risks and uncertainties that could cause actual results to

differ materially from those expressed in any such forward-looking statements. These risks and

uncertainties include, but are not limited to, the Company s substantial leverage and potential

inability to service its debt; the Company s dependence on distributions from its subsidiaries;

risks associated with the Company s international operations and significant foreign assets; the

Company s dependence on its Israeli operations; competition in each of the Company s markets;

potential environmental liability; potential legislation affecting the use of medicated feed

additives; extensive regulation by numerous government authorities in the United States and other

countries; the Company s reliance on the continued operation and sufficiency of our manufacturing

facilities; the Company s reliance upon unpatented trade secrets; the risks of legal proceedings

and general litigation expenses; potential operating hazards and uninsured risks; the risk of work

stoppages; the Company s dependence on key personnel; and other factors discussed in the Company s

filings with the U.S. Securities and Exchange Commission.