CHAL.L Regulatory News (CHAL)

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For Immediate Release

26 May 2015

Challenger Acquisitions Limited

("Challenger" or the "Company")

Investment in "The New York Wheel"

Letter of intent signed for Starneth acquisition

and

Suspension in trading pending the publication of a Prospectus

Challenger Acquisitions Limited (LSE: CHAL) announces that following the recent receipt of funding under its convertible note programme, it has been able to participate as an investor in the proposed New York Wheel project ("Investment"). As the Investment constitutes a Reverse Takeover under the Listing Rules, trading in the Company's ordinary shares have been suspended with effect from this morning pending the publication of a prospectus and the application for the enlarged Company to have its Ordinary Shares admitted to the Official List and to trading on the main market for listed securities of the London Stock Exchange.

In addition, the Company is announcing that it has signed a letter of intent ("LOI") for the acquisition of the principal operating businesses of Starneth ("Starneth Acquisition"). This follows the announcement on 18 March that recent discussions between Challenger and Starneth Holding BV ("Starneth") had resulted in a Cooperation Agreement being signed by both companies. The announcement of the LOI is the announcement of a transaction which would also constitute a Reverse Takeover under the Listing Rules.

Background to the Investment and the LOI

The Company was formed to undertake one or more acquisitions of target companies or businesses in the entertainment and leisure sectors with the particular focus on the "attractions" sector.

The acquisition of a minority stake would be limited to a single acquisition rather than multiple acquisitions in distinct businesses and particular attention would be paid as to whether the acquisition of a minority stake would provide a unique and one-time only entry into a specific sector of the target industry. The Board believes that the Investment provides just such an opportunity.

In assessing potential acquisitions, Challenger stated that particular attention would be paid, inter alia, as to whether the acquisition had a compelling case for providing the foundation or platform for a scalable business which could generate substantial and sustainable free cash flow over time. The Starneth Acquisition, if completed, would in the Board's view provide such an opportunity.

Information on the Investment

Challenger has invested a total of US$3 million for a 2.463 percentage (2.463%) interest in New York Wheel Investor LLC. This company was setup to fund the equity component for the New York Wheel project, which includes an approximate 630 foot high observation wheel with 36 capsules, a 70,000 square foot terminal and retail building, and a 950 space parking garage. In order to acquire that interest Challenger has become a party to the Amended and Restated Operating Agreement of New York Wheel Investor LLC dated May 20, 2015. Under that agreement, Challenger can be called upon to make further capital contributions to the project if there is a cash shortfall (or face potential dilution of its interest).

The New York Wheel is intended to become one of New York City's great landmark attractions, alongside the Statue of Liberty and the Empire State Building. Located on the northeastern side of Staten Island (St. George), the 630-foot, or roughly 60-story, attraction will be the tallest observation wheel in the world and the only one in New York City.

The New York Wheel has the potential to accommodate up to 1,440 people per ride, welcoming as many as 30,000 visitors per day and an anticipated 4+ million visitors per year.

Further information is available at www.newyorkwheel.com

Information on Starneth

Starneth together with its respective subsidiaries and affiliates ("Starneth Group") form an engineering and manufacturing group specialized in the design and construction of Giant Observation Wheels and Structures.

The Starneth team is made up of a number of the people behind the design and construction of the highly successful London Eye. Several members of the former London Eye engineering, construction and erection team are currently employees and consultants in the Starneth Group; while others are long-term, strategic partners working with the Starneth Group when required. The CEO of the Starneth Group was the Project Manager for the London Eye project.

With this experienced team, the Starneth Group possesses a unique capability to offer a Giant Observation Wheel on a fixed-cost, turnkey basis. The Starneth team is currently working on the Dubai Wheel and The New York Wheel. For further information see www.starneth.com.

The consideration for the potential Starneth Acquisition will consist of a fixed component payable in cash and ordinary shares together with a variable component based on the future performance of the Starneth Group.

Any obligation or commitment to proceed with the Starneth Acquisition will be contained only in a definitive agreement and the execution, delivery and performance of the definitive agreement is subject to obtaining the approval of Challenger's board, following fully satisfactory completion by Challenger of due diligence on the Starneth Group,

The LOI may be terminated by mutual consent of the parties thereto at any time. Challenger may terminate the LOI, in its sole discretion, in the event of a material breach of the LOI by the sellers or the occurrence of any event that, in Challenger's sole discretion, constitutes a material adverse change in the assets, liabilities, condition (financial or otherwise), results of operations or prospects of the Starneth Group's business. The sellers may terminate the LOI, in their sole discretion, in the event of a material breach of the LOI by Challenger.

Suspension and Application for Listing

The Investment and the Starneth Acquisition, if it proceeds, individually and collectively consititute a Reverse Takeover under the Listing Rules since, inter alia, in substance they result in a fundamental change in the business of the issuer.

The Company is working on the preparation of a prospectus in relation to the Investment and the Starneth Acquisition and will, in due course, be making application for the enlarged Company to have its Ordinary Shares admitted to the Official List and to trading on the main market for listed securities of the London Stock Exchange. There is no intention to seek Shareholders' approval for either the Investment or the Starneth Acquisition unless required for the purposes of facilitating the financing arrangements or for other legal or regulatory reasons.

Mark Gustafson, the Company's Executive Chairman, said:

"Our investment in the New York Wheel project combined with the pending acquisition of Starneth provides an excellent platform for developing a scalable business for our shareholders."

For more information: