Craven House Capital Regulatory News (CRV)

17 May 2012

CRAVEN HOUSE CAPITAL PLC

("Craven House" or the "Company")

Further Investment in Farm Lands of Africa Inc.

The Company today announces that it has agreed to purchase 517,350 shares in Farm Lands of Africa Inc. ("FLA" and previously called 'Farm Lands of Guinea Inc'.), representing approximately 5.6% of FLA's issued share capital. The shares are being purchased at a price of approximately $1.55 per share, amounting to a total consideration of $801,892.50 in aggregate, from a number of existing shareholders (the "FLA Shareholders"). This investment will bring the Company's total holding in FLA to 717,350 shares, representing approximately 7.8% of FLA. As at close of business on Wednesday 16 May, the mid price of the common stock was $4.00, valuing the Company's total investment in FLA at $2,869,400. Craven House's average investment price is $2.51 per share.

This purchase of shares is conditional upon the FLA shareholders or their appointed nominees subscribing for 40,094,624 new ordinary shares of 0.1 pence each in the Company ("New Ordinary Shares"). The agreed subscription price is 1.25 pence per Craven House share, amounting to a total subscription of £501,182.80 in aggregate and equal to the cash investment into FLA.

FLA is a Nevada corporation, which through its direct subsidiary Farm Lands of Guinea Limited, a British Virgin Islands' company, and its indirect 90%-owned subsidiary, Land & Resources (Guinea) SA, is leasing land and farming in the Republic of Guinea, bringing it into production using modern agricultural techniques. The common stock of FLA is traded on the Over-the-Counter Bulletin Board, under the symbol "FLAF.OB".

FLA has recently changed its name from 'Farm Lands of Guinea Inc.' to 'Farm Lands of Africa Inc.' to reflect its ambition and progress in rolling out its business model beyond Guinea throughout West Africa. FLA plans to bring into cultivation several hundred thousand hectares of land across neighbouring countries including the Gambia, Sierra Leone, Mali, Niger and Senegal, its stated goal being to accomplish a real and lasting difference to food security in the region.

The Company previously announced on 9 August 2011 that it had invested $1,000,000 in FLA to enable it to survey, prepare and cultivate over 100,000 hectares of leased farmland in Guinea. FLA continues to make very encouraging progress in relation to their operations in Guinea and has recently received a letter of interest for a multi-million dollar financing facility from a major development finance institution operating in the area. If secured, this facility will allow FLA to accelerate its activities in Guinea and enable them to cultivate at least an estimated 30,000 hectares of maize, soybeans and rice within a six-year period.

Mark Pajak, Acting Chairman, commented, "We are very pleased to announce this additional investment in FLA, which follows the previously announced investment, made in August 2011. Since this time, the management of FLA have demonstrated very encouraging progress towards negotiating new leases for significant areas of farmland; in particular in Sierra Leone and The Gambia. These are in addition to the c.100,000 hectares already under option in Guinea.

In addition, Craven House Capital has provided support to FLA in its application for a multi-million dollar financing facility from an extremely large and influential development finance institution. This is reflective of the close cooperation that exists between the two companies, which has led to the additional investment announced today.

Once again, I am very happy to report that this investment has been secured utilising our shares as currency - a clearly defined and central aspect of our investment strategy. This and all other recent transactions have valued the Company's shares at 1.25p per share. Craven House's continued ability to secure transactions which value its shares at a premium to the current market price, underline the belief in its future growth prospects. 

This transaction provides our shareholders with multiple benefits. We are able to buy FLA shares at a discount to the market price while continuing to value Craven House shares at a premium to the market price. We were able to achieve this because the FLA Shareholders recognise Craven House as a value added shareholder who not only supplies capital but also leverages its expertise and relationships with development finance institutions and industry leaders. We believe Craven House shareholders will be rewarded over the long term by the increased exposure to the growth of African agriculture and FLA shareholders will benefit from our continued involvement.

We view our investment in FLA as a long-term strategic holding and we look forward to supporting this company further as they deliver on their plans for large scale maize, rice and soya production across West Africa."

Application has been made to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on AIM. Admission is expected to take place on 23 May 2012. The shares will rank pari passu with the existing issued ordinary shares.

Following the issue of the New Ordinary Shares, FLA and the FLA Shareholders, or their appointed nominees, will hold approximately 19.5% of the total issued share capital of Craven House.

Following the issue of the new ordinary shares, the Company's total issued share capital will consist of 331,181,595 ordinary shares with each share carrying the right to one vote. The Company has no ordinary shares held in treasury. The total of 331,181,595 ordinary shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

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