Ceps Regulatory News (CEPS)

30 September 2015

CEPS PLC

 ("CEPS" or the "Company")

Acquisition of a Majority Shareholding in CEM Press Limited

CEPS is pleased to announce that it has significantly increased its indirect shareholding in CEM Press Limited ("CEMP") ("Acquisition") from 21.4 per cent. to 71.5 per cent. CEPS previously acquired its shareholding in CEMP through CEM Press Holdings Limited (formerly NG42 Acquisitions Limited) which was initially formed for the purpose of acquiring CEMP.

In line with CEPS' financing strategy, the Acquisition has been effected by the introduction of a new holding company, CEMTEAL Limited ("CL"), which has acquired 97.9 per cent. of CEMP and of which CEPS is a 73 per cent. shareholder. The remaining 27 per cent. of CL not owned by CEPS is owned by CEMP's management team.

CEPS has advanced £300,000 to CL to fund the Acquisition in the form of unsecured non-convertible loan notes ("CEPS Loan Notes") carrying an interest rate of 7 per cent. In addition, CEPS has agreed to act as guarantor in respect of loan notes totalling £963,350 (the "CL Loan Notes") issued by CL alongside the CEPS Loan Notes to certain of the vendors. The CL Loan notes carry an interest rate of 4 per cent. and are repayable in tranches between September 2016 and September 2018.

CEMP is a manufacturer of fabric and wallpaper pattern books, swatches and shade cards, with a focus on the high-end fabric and wallpaper market. CEMP's products are sold both in the UK and overseas. In the year ended 31 December 2014, CEMP's sales were £3,437,458 and profit before tax was £54,280. At 31 December 2014, net assets were £959,968. Trading performance of CEMP so far in 2015 has been in line with management's expectations.

The Directors of CEPS believe that the Acquisition will be a valuable addition to CEPS and fits well with CEPS' strategy of acquiring interests in established, cash generative businesses, utilising a funding structure aimed at maximising the return on equity invested.

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