Coral Products Regulatory News (CRU)

Coral Products plc

("Coral" or "the Company")

Acquisition & Placing

Acquisition of Freehold

Coral Products plc (AIM: CRU), which specialises in the design, manufacture and supply of injection-moulded plastic products, is pleased to report that it has exchanged contracts in relation to its acquisition ("Acquisition") of the freehold of its manufacturing premises at Haydock for an aggregate cash consideration of £1.75 million ("Consideration"). The Acquisition is expected to complete on or before 7 December 2012.

The Consideration is equivalent to the valuation of the premises and is to be satisfied as to £1.4 million of new loan facilities provided by the Company's bankers and £350,000 from an issue of new ordinary shares, as detailed below.

The new loan facilities, which are subject to financial covenants being met, comprise (i) a 10 year loan of £1.225 million at an interest rate of 2.95 per cent. above base and (ii) a five month loan of £175,000 at an interest rate of 3.35 per cent. above base. The 10 year loan is subject to a repayment holiday of five months.

The Acquisition is expected to result in net annual cost savings of approximately £250,000, taking account of saved rental payments and additional interest payments due on the new loan facilities.

Placing

Subject to various conditions precedent being met including the provision of bank finance, in mid-October the Company agreed the terms of a subscription agreement to issue 3,800,000 new ordinary shares of 1 penny each (the "Placing Shares") at the then mid-market price of 12.5 pence per share (the "Placing Price") to funds managed by MAM Funds plc, to raise £475,000 (before expenses). The funds raised will be used as part-consideration for the Acquisition and for general working capital purposes. The issue of the Placing Shares is conditional on completion of the Acquisition.

The Placing Shares, which will rank pari passu with the existing ordinary shares, will represent 9.06 per cent. of Coral's enlarged issued share capital. The Placing Price represents a discount of 33.8 per cent. to the closing mid-market price per Coral ordinary share of 18.875 pence as at 29 November 2012, being the last business day prior to this announcement.

Application for admission to trading on AIM of the Placing Shares will be made upon completion of the Acquisition and admission of the Placing Shares is expected to occur shortly thereafter. A further announcement will be made in due course.

Following the issue of the Placing Shares, the issued share capital of the Company will comprise 41,935,609 ordinary shares of 1 penny each.

Chairman Joe Grimmond commented:

"In early October we were offered the very attractive opportunity to purchase the freehold of the premises occupied by Coral at Haydock. It has been funded 70 per cent. by bank debt with the balance through an equity placing of 3.8 million shares agreed in mid- October with funds managed by MAM Funds plc at the then prevailing market price. This acquisition allows Coral to develop with confidence a centre of excellence on its own site of 100,000 square feet.

"The purchase will save £304,000 p.a. in rent and will be earnings enhancing. This is another step in rebuilding the profitability and asset base of the group."

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