Coral Products Regulatory News (CRU)

30 June 2011

CORAL PRODUCTS PLC

Suspension, Proposed Cancellation and Notice of General Meeting

The Board of Coral Products Plc ("the Company") is pleased to announce that it will post a circular to shareholders today convening a general meeting ("GM") to be held at 2:30 p.m. on 18 July 2011 at the Haydock Thistle Hotel, Haydock, Merseyside WA11 9SG, at which it will seek shareholder approval for the proposed cancellation of admission to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities ("Cancellation") and detail its intention to apply for admission to trading on AIM ("Admission").

The circular will be available shortly on the Company's website at www.coralproducts.com.

A consequence of the publication of the circular is that trading in the Company's ordinary shares will be suspended at 7:30 a.m. today until further notice. Further details regarding the suspension are included in section 2 below.

1. Background to and reasons for Cancellation and Admission

The Board has been reviewing its strategy in recent months and the decision to move from the Official List to AIM is the next step in its broader plan to restore the Company to profitability and growth. At the time of the appointment of Joe Grimmond as Non-Executive Director in March 2011, the Company announced that its future strategy included expansion into associated areas of the existing business in order to develop a more broadly based manufacturing group, both from organic growth and through identification of suitable acquisitions.

The Board is currently reviewing a potential significant acquisition and fundraising which would, if agreed, be subject to shareholder approval in due course, but only if Cancellation is approved by shareholders at the GM. The acquisition target is a profitable, privately-owned company which markets and distributes plastic products. Due to its size, the acquisition would constitute a reverse takeover under the Listing Rules and the AIM Rules for Companies. The Board believes that the business would complement the Company's existing business and broaden the product base in line with its strategy. Due diligence is currently in progress and there is no certainty at this time that the acquisition and fundraising will be completed. The Company has not yet entered into any agreement regarding the potential acquisition.

The Board believes that, whether or not the acquisition and fundraising outlined above proceed, a transfer to AIM will provide a market and environment more suited to the Company's size and will simplify the ongoing administrative and regulatory requirements of the Company, with a consequential reduction in the ongoing costs associated with having its shares listed on the premium segment of the Official List. The Board also believes that AIM will offer greater flexibility, particularly with regard to corporate transactions, and should therefore enable the Company to agree and execute certain transactions more quickly and cost effectively. The Board believes this is likely to be a significant benefit to the Company going forward.

Once admitted to AIM, shareholders should continue to be able to trade the ordinary shares in the usual manner through their stockbroker or other suitable intermediary, subject to liquidity.

2. Suspension to trading in the Company's Ordinary Shares

In light of the fact that the acquisition would constitute a reverse takeover under the Listing Rules, trading in the Company's ordinary shares will be suspended at 7:30 a.m. today pending further disclosure in relation to the acquisition target. As it is uncertain whether the acquisition will proceed, the Company is unable to disclose further information on the acquisition target at this time. Accordingly, if shareholders approve the Cancellation at the GM, no further dealings in the ordinary shares on the premium segment of the Official List will be possible. If the Cancellation is not approved, the suspension to trading of the ordinary shares will be lifted either when the Company confirms that the acquisition will not proceed or when full disclosure is made in relation to the acquisition target.

3. Cancellation of Listing and Admission to AIM

Conditional on the resolution being approved at the GM, the Company will apply to cancel the listing of the ordinary shares on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. Cancellation of the listing of the Ordinary Shares on the premium segment of the Official List will take effect at 8:00 a.m. on 16 August 2011, being not less than 20 business days from the passing of the resolution.

Once Cancellation becomes effective, the Company's shares will not be traded on any market and shareholders will not be able to revisit their decision to delist, whether the acquisition and fundraising proceed or not.

If the acquisition and fundraising proceed, shareholder approval, inter alia for the acquisition and the issue of new shares in relation to the acquisition and fundraising, will be sought at a second general meeting. Approval will be subject neither to the Listing Rules nor the AIM Rules for Companies. If approved, the enlarged group will apply for Admission. If the acquisition and fundraising do not proceed, or if shareholder approval is not obtained, the Company will still seek Admission for the Company. The Board would expect the period between Cancellation becoming effective and Admission to be approximately three weeks. In either case, Admission would be subject to the Company or enlarged group satisfying the Admission requirements and there is no certainty that Admission will occur.

Following Cancellation and Admission, ordinary shares that are held in uncertificated form will continue to be held and dealt through CREST. Share certificates representing those ordinary shares held in certificated form will continue to be valid and no new share certificates will be issued.

4. Preliminary Results

The Company published its preliminary results for the year ended 30 April 2011 on 22 June 2011, which contained a trading and financial update on the Company.

5. Proposals to be voted on at the General Meeting

The resolution relating to the proposed Cancellation will be proposed at the GM. The resolution, which is proposed as a special resolution and as such requires a vote in favour by a majority of not less than 75 per cent. of the votes cast at the GM, seeks Shareholder approval for (i) the cancellation of the listing of the ordinary shares on the Official List and from trading on the London Stock Exchange's main market; and (ii) the Directors to be authorised to take all such steps which are necessary or desirable in order to effect such cancellation.

6. Recommendation

The Board is of the opinion that Cancellation is in the best interests of the Company and shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution being proposed at the GM as the Directors intend to do in respect of their own beneficial holdings, which amount in aggregate to 7,319,801 Ordinary Shares, representing approximately 36.35 per cent. of the existing issued share capital of the Company.

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