Craven House Capital Regulatory News (CRV)

21 November 2013

Craven House Capital Plc

("Craven House" or the "Company")

Update on Investment

Craven House today announces that it has completed the restructuring of the distressed loan that it acquired in May 2013 (the "Loan"), as previously announced on 28 May 2013.

The Loan, which was secured over the Green Isle Conference and Leisure Hotel in Dublin (the "Hotel"), was acquired by Craven House for €0.7 million, with Craven House becoming the sole secured lender for the Hotel. Craven House directors believed that with the right capital structure the Hotel could form an attractive asset. The Company has now restructured the Loan, facilitating the simultaneous sale of the Hotel to new owners. Under the restructuring, Craven House has agreed with the new owners to convert the Loan into a new mortgage of €1.5 million (the "Mortgage"). The Mortgage will carry an interest rate of 4% per annum and will be repaid in full within three years.

As previously announced, Craven House borrowed €0.7 million from Desmond Holdings Ltd, the Company's investment manager, in order to acquire the Loan. As a precondition of converting the Loan into the Mortgage and releasing the original security over the hotel, Craven House received sufficient funds from the Hotel to fully repay the original €0.7m borrowed from Desmond Holdings

The restructuring of the Loan into the Mortgage and the repayment to Desmond Holdings have resulted in an increase of €1.5 million in the net asset value of Craven House, as well as providing annual interest payments of £60,000 for the next three years.

Mark Pajak, Acting Chairman, commented, "This has proved to be an outstanding result for Craven House. In a period of less than six months we have repaid, in full, the €700,000 loan we took out to acquire the asset and have now restructured the mortgage, making the hotel a viable and attractive going concern for the new owners. This transaction has achieved two of our stated goals; firstly our aim to acquire a cash-generative asset (interest payments under the Mortgage are £60,000 per annum) and secondly it has increased Craven House Capital's net asset value by €1,500,000; which further underlines our firm belief that the Company's shares continue to trade at a discount to the underlying value of our assets. We are in active dialogue regarding similar, distressed loans and assets and we look forward to replicating this type of transaction in the future. "

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