Adams Regulatory News (ADA)

Carpathian PLC

("Carpathian", the "Company" or the "Group")

Management Services in 2012

Carpathian PLC (AIM: CPT) is pleased to provide an update regarding the progress made on arrangements for the management of the remaining assets of the Group and the winding-up of all remaining entities.

The current agreement with the Company's property investment adviser expires on 31 December 2011 and the Company therefore announced on 15 December 2011 that it proposed to make arrangements for the provision of the necessary accounting and other administrative services over the next few months in order to prepare the Company's financial report and accounts for the period ending 31 December 2011, achieve an orderly wind-up of the Group and manage the remaining Special Purpose Vehicle liquidations. The two remaining properties owned by the Company are the investment property Galleria Riga, Latvia and development land in Baia Mare, Romania. Further details on each of these assets were provided in the announcement made on 15 December 2011.

New arrangements have now been entered into with the existing property investment adviser, Carpathian Asset Management LLP and Carpathian Asset Management Limited (together "CAM") for the provision of corporate and asset management services in 2012 and for the amendment of certain provisions of the existing Portfolio Management Agreement.

New 2012 Services

CAM has been engaged to supply corporate and asset management services. The corporate services comprise management of the orderly winding-up of the Group's remaining SPV's in a number of countries, ongoing financial reporting for the Group and preparation of the Group's 2011 financial report and accounts. The fees for this element will be paid monthly at a rate starting at £18,333 for the first three months, followed by a subsequent three months at £15,000 reducing to £10,000 per month from July 2012 (if required for either of the latter periods). The Company or CAM can terminate the service on 2 months' notice at any time before 1 July 2012 or on 1 month's notice thereafter.

The asset management services relate to Riga and Baia Mare as well as various post completion matters arising from the recent disposals. The fees payable for these services commence at £11,675 per month and, assuming sales occur would reduce to zero in the third month after the assets are sold. These services may be terminated by the Company or CAM on 3 months' notice given before 1 July 2012 or on 1 month's notice thereafter.

Both services will terminate automatically on 31 December 2012 in the absence of any earlier notice being given.

Revisions to the existing Portfolio Management Agreement

Certain revisions have been agreed to reflect the following:

(a) certain litigation, as announced on 2 June 2006 at the time of the acquisition of the Promenda Shopping and Business Centre, involving one of the Group's SPVs is ongoing and will require some management with a view to recovering the Company's funds held by the Court. CAM has agreed to provide these litigation management services in 2012 for no fee.

(b) the settlement deed relating to the Dawnay Day Group profit reinvestment issues (announced on 1 December 2011) is expected to complete in February 2012. If, for whatever reason, the settlement deed does not complete, CAM has agreed to provide litigation management services to continue to deal with those issues. The monthly fee is yet to be finalised but in any event will not exceed £6,250 per month until 31 December 2012.

(c) a reduced performance payment will apply to any sale in 2012 of the two remaining property assets, calculated using the net distributable reserves generated on disposal. For Riga, this will be 20% and for Baia Mare 10% of net distributable reserves. The Sales Fee provisions in the former Portfolio Management Agreement will also apply to those assets provided net equity is recovered for the Company although, in either case, any such amounts are not anticipated to be material.

(d) an interim agreed payment of the Distributed Capital Payment based on the cash dividends actually declared by the Company, including the most recent C Share Bonus Issue distribution of 12 cents per ordinary share announced on 15 December 2011. This amounts to approximately €9.86m based on the existing Portfolio Management Agreement calculations, and will be paid in January 2012 around the same time as ordinary shareholders receive payment on the C Share Bonus issue.

The Board is pleased that arrangements with CAM have been finalised and that the Company is now on track to complete the complex winding-up of Group members and its planned de-listing from AIM - both scheduled to take place at some time in 2012. Timing for the General Meeting to approve the de-listing from AIM will be confirmed in due course, following publication of the Company's annual report and accounts for the year ended 31 December 2011.

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