Braveheart Investments Regulatory News (BRH)

13 December 2013

Braveheart Investment Group plc

('Braveheart', the 'Company' or the 'Group')

Disposal of Envestors

Braveheart Investment Group plc (the 'Group' or the 'Company'), the AIM-listed investment management group providing debt and equity capital to SMEs and servicing the investment requirements of business angels, high net worth individuals, family offices, and public sector organisations announces that it has sold Envestors Ltd ('Envestors'), one of its subsidiaries, to a management buy-out team. 

The sale follows the decision by the Braveheart Board to exit the business for the following reasons:

· Whilst Envestors has shown steady growth since its acquisition in 2010, it has not performed in line with expectations and has not contributed positively to the Group's financial performance. Furthermore, recent trading has been poor and the business has made significant losses due to high fixed costs; and

· Envestors provides corporate finance advisory services; as such there is little forward visibility on revenue, which in any case tends to be volatile. This model does not fit with the Group's strategy of building a business based on long-term contracted revenue. 

Notwithstanding the sale of Envestors, the two businesses will continue to collaborate on certain initiatives for mutual benefit. 

The consideration for the sale is the cancellation of the final Braveheart share issue due to the three management buy-out participants, as agreed at the time of the Envestors acquisition and detailed within the Group's 2013 Annual Report. Consequently, 882,971 new Braveheart shares will now not be issued. A fourth member of the management team, who exited the business in March 2013, will still be issued with 324,924 new Braveheart shares and application for these shares to be admitted to AIM will be made shortly.

Two members of the management buy-out team are directors of Envestors and the disposal is therefore a related party under the AIM Rules. The Directors of Braveheart, having consulted with the Company's nominated adviser, consider the terms of the disposal to be fair and reasonable insofar as shareholders are concerned.

The rest of the Group's operating companies are trading in-line with expectations and this divestment will enable the Group to concentrate its resources on growing its fund management business. The Group expects to announce its interim results for the six months ended 30 September 2013 shortly.

Further information:

Braveheart Investment Group plc

Sanlam Securities UK Limited (Nominated Adviser and Broker to Braveheart)

Media enquiries:

Allerton Communications

Notes to Editors

Braveheart Investment Group plc

Braveheart provides financing for small and medium sized enterprises (SMEs) as follows: 

For the company looking to raise money, we provide:

· Equity capital. This form of financing is typically long term and is usually appropriate for fast growing businesses or early stage companies. We will consider equity financings where our individual investment, or the investment we arrange, would normally be a maximum of £2m although we are happy to participate in larger financings as part of a syndicate;

· Debt finance. Short to medium term and for companies with cash flow to service the loan. Our unit size for this type of finance is up £1m and we will usually provide junior debt which is unsecured but linked to an equity instrument;

The money we invest comes from a variety of sources (see below) and is sometimes linked to particular geographical locations.

To the investor, we provide a one stop shop service to those in one of the following groups who are looking for exposure to SME investments:

· High net worth (HNW) individuals looking to build tax efficient Enterprise Investment Scheme (EIS) and Seed EIS portfolios;

· Family offices and private sector institutions;

· The Public sector.

Investors can choose between investment types ranging from self-build portfolios, to a full fund management service.

www.braveheartgroup.co.uk