ACH.L Regulatory News (ACH)

London, 24 September 2012

TAWA PLC ("TAWA")

PRESS RELEASE- RNS

Tawa announces sale of KX Reinsurance Company Limited and

OX Reinsurance Company Limited

Tawa plc ("Tawa"), the quoted specialised investor in the insurance industry, today announces that it has signed a Share Purchase Agreement to sell 100% of its shares in KX Reinsurance Company Limited ("KX Re") to Catalina Holdings Limited. The sale includes 100% of the shares in OX Reinsurance Company Limited ("OX Re"), which is wholly owned by KX Re. This disposal is in line with the stated strategy of divesting some of its portfolios as set out at its AGM on 21 June 2012. The formal sales process of the entire Tawa plc stock announced on 10 September 2012 is continuing as anticipated.

The total consideration to be received at completion will be a minimum of $28 million in cash and could reach $30 million, depending on financial performance of KX Re between now and completion. $15 million of this will be used to repay an inter-company loan facility between KX Re and Tawa plc on completion. The balance of the consideration received will be used for financing new opportunities, the repayment of debt and general working capital purposes. The net book value of KX Re as at 31 December 2011 was $53.1 million. The impact of the sale on the consolidated Tawa plc balance sheet prepared under International Financial Reporting Standards at completion is estimated to be a reduction in equity of $19 million (assuming total consideration of $30 million is received).

Tawa acquired KX Re in May 2007 and OX Re in March 2011. The total value extracted from the investments in KX Re and OX Re, including the proceeds from the sales, is estimated to be $126 million compared to a cash outlay of $78 million in aggregate. For the year ended 31 December 2011 Tawa received management fees from KX Re of $2 million.

Completion of the transaction is subject to certain conditions including receiving FSA approval to the change of control, which is expected to be received by the end of 2012, and discharge of OX Re's routine business banking charges which is expected in advance of such date.

KPMG acted as the financial adviser to Tawa plc on the transaction.

Notes for Editors:

About Tawa Plc

Tawa plc was formed in 2001 and is a specialised investor in the insurance industry. In the last few years, Tawa has moved from being a pure run-off risk owner towards being a multi-segment investor in the insurance market, expanding significantly in the servicing arena of the insurance industry.

Tawa invests in acquiring run-off portfolios ("Portfolios", "Risk Carriers") and investing in servicing business. The Group also operates as an incubator for new projects and has invested alongside professional teams to create two new businesses, Q360 and Lodestar Marine, in addition to developing its own products to serve the insurance market as a whole such as STRIPE®.

On the portfolio front, Tawa has acquired, since its formation, six insurance entities in run-off - CX Reinsurance Company Limited, KX Reinsurance Company Limited, LGIC Holdings, LLC, PXRE Reinsurance Company, Island Capital Limited and OX Reinsurance Company Limited. As an alternative technique to assuming run-off risks, Tawa has also established a dedicated reinsurance vehicle in Bermuda to reinsure portfolios. On the service side, Tawa acquired Pro Insurance Solutions Ltd (Pro) in 2009 and the HIR group in April 2012. HIR owns the Chiltington Consulting Group. Through HIR, Tawa now offers a vehicle for European run-off portfolio transfers under the European Union portfolio transfer directive.

The Group's combined team of approximately 400 professionals service a number of the largest insurance businesses in the UK and Europe and deliver a market-wide third-party servicing capability and cover London's company and Lloyd's markets as well as Europe, Bermuda, South America and the USA. The service companies provide underwriting, claims management, broking and consulting services to a broad array of international clients across the market, whether active underwriters or run-off. Pro has also established an innovative platform to provide turnkey services supporting clients wishing for immediate start of a new broking or MGA venture.

 As part of its expansion in the Lloyd's market, in January 2012, Tawa became the owner of 33% of Asta Capital Limited, the leading turnkey agency management services company in Lloyd's.

In July 2007 Tawa plc was floated on the AIM market.

Further information can be found on the Company's website: www.tawaplc.co.uk.