CSLT.L Regulatory News (CSLT)

Proposed cancellation of listing of the Cosalt Shares to the Official List and of trading on the London Stock Exchange's main market for listed securities

Re-registration as a private limited company

 and

Notice of General Meeting

The Board of Cosalt plc ("Company" or "Cosalt") announces today that the Company is seeking shareholder approval for the cancellation of the listing of Cosalt shares on the Official List and trading on the London Stock Exchange ("Cancellation"). A circular is today being posted to the Company's shareholders convening a general meeting to take place at the offices of the Company, Origin 4, Genesis Park, Origin Way, Grimsby DN37 9TZ, at 9 am on 27 February 2012 to seek such approval ("General Meeting") and explaining the background to the proposed Cancellation and the reasons why the Board of Directors unanimously consider the proposed Cancellation to be in the best interests of the Company and its shareholders as a whole, and further why it recommends that shareholders should vote in favour of the proposed Cancellation at the General Meeting ("Circular").

The Circular will also be available on the investors' section of Cosalt's website accessible at www.cosalt.com and is also available for inspection at Osborne Clarke One London Wall, London EC2Y 5EB upon request and will also be stored at the National Storage Mechanism.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

The following text is extracted from a Circular expected to be posted today. Definitions used in the Circular apply in this announcement unless the context otherwise requires.

Proposed cancellation of listing of the Cosalt Shares to the Official List and of trading on the London Stock Exchange's main market for listed securities

Re-registration as a private limited company

 and

Notice of General Meeting

Proposed cancellation of listing of the Cosalt Shares to the Official List and of trading on the London Stock Exchange's main market for listed securities and re-registration as a private limited company and Notice of General Meeting

1. Introduction

Cosalt today announced that it is proposing to cancel the admission of the Cosalt Shares from the Official List and to trading on the London Stock Exchange's Main Market (the "Cancellation") and, conditional upon the Cancellation becoming effective, to re-register Cosalt as a private limited company (the "Re-registration"). Under the Listing Rules, the Cancellation can be effected by Cosalt only after approval by a resolution of Shareholders in the General Meeting, passed by 75% of those Shareholders who attend and vote at the meeting, and the expiration of a period of not less than 20 Business Days from the date of the Shareholder approval.

The purpose of this letter is to outline the reasons for the Cancellation and the Re-registration and explain why the Directors consider the Cancellation and Re-registration to be in the best interests of Cosalt and the Shareholders as a whole and why the Directors recommend that you vote in favour of the Resolutions as they intend to do in respect of the Cosalt Shares held by them.

You will find set out at the end of this document the Notice of General Meeting to be held at the offices of the Company, Origin 4, Genesis Park, Origin Way, Grimsby DN37 9TZ at 9 am on 27 February 2012, at which the Resolutions to authorise Cosalt to approve the Cancellation and the Re-registration will be proposed as special resolutions.

2. Background to and reasons for the Cancellation and Re-registration

On 19 October 2011, Cosalt announced that the Group's trading for the year to 31 December 2011was expected to be significantly lower than the Board's previous expectations and that the delayed sale of the Marine division earlier in the year and the resulting pressure on cashflow has had an adverse effect on the margins of its Offshore Division (both in the UK and in Norway) and has also delayed the rollout of the South East contract in the Group's Workwear division. It was stated that the Board has instigated a full review of the Group's operations and future funding requirements.

On 23 November 2011 the Company announced the Company's cash flow position had continued to deteriorate such that the Company only had GBP900,000 of bank facilities available, representing sufficient working capital only until 30 November 2011 and that the Company was in urgent discussions with its major shareholders and banking partners.

On 25 November 2011, the Independent Directors of Cosalt plc ('Cosalt') and the Board of Oval (2245) Limited ('Oval') announced that they have reached an agreement on the terms of a recommended cash offer to be made by Oval, a company wholly owned by myself, for the entire issued and to be issued ordinary share capital of Cosalt, other than an aggregate of 60,998,069 Cosalt Shares (representing approximately 15.08 per cent. of the entire existing ordinary share capital of Cosalt) beneficially owned by me.

The deterioration in Cosalt's trading as outlined in part 1 of the offer documents dated 29 November 2011 and 22 December 2011 in respect of the Offer, together with the current level of net indebtedness in the Cosalt Group and the pension deficit has resulted in a high degree of uncertainty over the ability of Cosalt to be able to continue as a going concern. I have, in recent years, provided significant levels of funding to the Cosalt Group. Cosalt requires a significant injection of capital to provide the necessary funding for the business to ensure it can meet its obligations and provide time to seek a turnaround in the performance of the business. A number of Cosalt's largest shareholders indicated that they did not wish to invest further cash into the business, and subsequently sold their Cosalt Shares to Oval or myself.

Further to Oval's offer for the issued share capital of Cosalt being declared wholly unconditional on 9 January 2012, the board of Cosalt agreed revised arrangements for the provision of borrowing facilities to the Company by Oval. The Company's previous short-term GBP5 million borrowing facility with Oval, which expired on 9 January, was replaced with a new GBP5 million unsecured facility. The Company will use this facility to fund working capital and capital expenditure. Under the terms of the new facility, any amounts outstanding will fall due for repayment on the earliest to occur of (i) 30 June 2012; (ii) the date of any refinancing of any nature of the Company's bank facilities (being a refinancing, redemption or cancellation in full of all such facilities) with HSBC and RBS, the Company's senior lenders; or (iii) the date the facilities must be repaid on certain events of default. To date £4,645,000 has been drawn down under this facility.

The Directors believe that it is no longer appropriate to maintain its listing as it is disproportionately restrictive and costly for a business of its size and that it would be easier to address Cosalt's issues as a private company. It is therefore intended that Cosalt will be delisted to address the issues that have affected the Cosalt Group's trading, away from the public markets.

For these reasons, the Directors consider that it is in the Company's interests to seek approval to effect the Cancellation and Re-registration. However, Shareholders should note that following the Cancellation becoming effective:

·; The regulatory regime which applies solely to companies with shares admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities will no longer apply, including obtaining shareholder approval under the Listing Rules for transactions out of the ordinary course of business or with related parties.

·; The Company would no longer be required to comply with the UK Corporate Governance Code.

·; The Cancellation may have taxation consequences for Shareholders, for example, once the Cancellation has become effective, the Cosalt Shares would no longer be a qualifying investment for an individual savings account (ISA).

·; The Cancellation may have implications for Shareholders holding shares in a Self-Invested Personal Pension ("SIPP"). For example, shares in unlisted companies may not qualify for certain SIPPs and, if in any doubt, Shareholders should consult with their SIPP provider immediately.

The Cancellation will significantly reduce the liquidity and marketability of any Cosalt Shares not assented to the Offer and their value may be affected in consequence as there will be no market facility for dealing in Cosalt Shares.

Subject to the passing of Resolution 1 set out in the Notice of General Meeting at the end of this document, it is intended that Cosalt will be re-registered as a private limited company under section 97 of the Companies Act 2006 and pursuant to the passing of Resolution 2(a).

Resolution 2(b), which is conditional on the passing of Resolution 1 and which is being proposed as a special resolution, changes the Company's name to "Cosalt 2012 Limited". Usually, upon re-registration as a private limited company, the company would keep the same name and only the suffix would change. However, "Cosalt Limited" is already in use by a group company of the Company and, accordingly, a new name must be adopted for the Company upon Re-registration.

Resolution 2(c), which is conditional on the passing of Resolution 1 and which is being proposed as a special resolution, adopts the New Articles. These amend the existing articles of association of the Company by deleting certain provisions which will no longer be relevant to the Company following Cancellation. In particular, the following provisions are proposed to be removed:

·; Provisions relating to uncertificated shares;

·; The requirement for the Directors to retire by rotation at every third annual general meeting;

·; Provisions relating to the restriction on the authority of the Directors to borrow funds on behalf of the Company;

In addition to these changes, as a private limited company, the Company will no longer be required to produce its accounts within six months following the end of its financial year and then to circulate copies of the accounts to Shareholders. Following Re-registration, the period for the preparation of annual reports and accounts is extended to nine months following the end of the financial year. The Company will still be required to circulate annual reports and accounts to Shareholders but the period for doing so is extended for private companies. In addition, the Company will no longer prepare or publish interim accounts.

Furthermore, after Cancellation, Shareholder resolutions of the Company may be obtained as written resolutions by obtaining the approval in writing of a majority of Shareholders in the case of ordinary resolutions, and 75 per cent. of Shareholders in the case of special resolutions. After Cancellation, and as a private limited company, the appointment of a company secretary is at the Company's discretion.

The New Articles will be available for inspection during normal business hours at the registered office of the Company from the date of this document until the time of the General Meeting and at the place of the General Meeting from at least 15 minutes before the General Meeting until it ends.

3. Details of the Cancellation

Under the London Stock Exchange's admission and disclosure standards, Cosalt must advise the London Stock Exchange of the Cancellation not less than 20 Business Days before the date it intends trading in the Cosalt Shares to be discontinued.

Under the Listing Rules, the Cancellation can be effected by Cosalt only after securing approval by a special resolution of Shareholders at the General Meeting, and the expiration of a period of not less than 20 Business Days from the date of the Shareholder approval. Such approval will be sought through Resolution 1 set out in the Notice of General Meeting. Subject to Resolution 1 being duly passed, Cosalt will apply to the FSA and to the London Stock Exchange for cancellation of admission of the Cosalt Shares to the Official List and to trading on the London Stock Exchange. It is anticipated that the Cancellation will take effect 20 Business Days following the passing of Resolution 1 on or around 27 March 2012.

4. Bank consent

The Offer was declared wholly unconditional in all respects on 10 January 2012 and bank consent in respect of the change of control of the Company was provided by RBS as agent under the Bank Facilities Agreement.

On 10 January 2012 Oval and the Company entered into a Medium Term Facilities Agreement ("MTFA") under which Oval is to provide the Company with a range of financing facilities (including a revolving loan facility) of up to £5 million in aggregate, for general working capital purposes and to finance agreed capital expenditure. Monies under the MTFA can be drawn down by the Company when required, subject to the satisfaction of certain customary conditions precedent. Until the date (the "Discharge Date") that all payments have been made or discharged to the Company's senior lenders under the Bank Facilities Agreement, no repayment amounts shall be made without the prior written consent of RBS, acting as agent for the senior lenders under the Bank Facilities Agreement. Any amount outstanding under the MTFA shall be immediately repayable upon the earliest to occur of (i) 30 June 2012; (ii) the date of any refinancing of any nature of the bank facilities available to the Company pursuant to the Bank Facilities Agreement; (iii) the date there has been an insolvency event against the Company provided that (in the case of either (i) or (ii)) the Discharge Date has occurred before then. An arrangement fee of £100,000 is payable in respect of the provision of the MTFA subject to certain restrictions. To date, the Company has requested drawdown, and Oval has satisfied, payments of £4,645,000 in aggregate.

Following entry into the MTFA, all amounts due under (including the arrangement fee of £100,000) the Short Term Facilities Agreement were repaid by the Company to Oval in full on 11 January 2012. Consent to such repayment was provided by RBS as agent, as required under the Bank Facilities Agreement.

5. Taxation

Shareholders and prospective investors should consult their own professional advisers on whether continuing to hold Shares following the Cancellation is suitable for them or whether the Cancellation has any tax consequences for them.

Any comments on the tax implications described in this document are based on the Directors' current understanding of tax law and practice, are not tailored to any individual circumstances and are directed at individuals who are UK resident and domiciled. Tax rules can change and the precise tax implications for Shareholders will depend on their particular circumstances. If you are in any doubt as to your tax position, you should consult your own independent professional adviser.

6. Transactions in the Cosalt Shares following the Cancellation

The Directors are aware that Shareholders may still wish to acquire further or dispose of Cosalt Shares and, accordingly, intend to use reasonable endeavors to create and maintain a matched bargain settlement facility.

Under this facility Shareholders or persons wishing to acquire shares will be able to leave an indication with the matched bargain settlement facility provider that they are prepared to buy or sell at an agreed price. In the event that the matched bargain settlement facility provider is able to match that order with an opposite sell or buy instruction, the matched bargain settlement facility provider will contact both parties and then effect the order. Shareholders who do not have their own broker may need to register with the matched bargain settlement facility provider as a new client. This can take some time to process and therefore Shareholders who consider they are likely to avail themselves of this facility are encouraged to commence it at the earliest opportunity.

The contact details of the matched bargain settlement facility provider once arranged will be made available to Shareholders on Cosalt's website.

Shareholders should note that following the Cancellation, Cosalt will remain subject to the provisions of the Code.

7. Option Holders

The Cancellation will not affect the terms of the Cosalt Options. However, following the Cancellation, since there will be no ready market in Cosalt's shares, Cosalt Optionholders will need to take this into account when deciding to exercise or not to exercise their Cosalt Options in the future to the extent that such Cosalt Options have not previously lapsed.

8. General Meeting

A notice convening the General Meeting, to be held at the offices of the Company, Origin 4, Genesis Park, Origin Way, Grimsby DN37 9TZ, at 9am on 27 February 2012, is set out at the end of this document, at which the Resolutions will be proposed to approve the Cancellation.

9. Action to be taken

Shareholders will find a Form of Proxy enclosed with this document for use at the General Meeting or at any adjournment thereof. You are requested to complete and sign the Form of Proxy, whether or not you propose to attend the General Meeting in person, in accordance with the instructions printed on it and return it as soon as possible, but in any event so as to be received no later than 9.00am on 25 February 2012, by the Company's Registrars, Capita Registrars at PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Alternatively you may vote online at www.capitashareportal.com in accordance with the procedures set out in the notice convening the General Meeting at the end of this document.

CREST members may also choose to utilize the CREST electronic proxy appointment service in accordance with the procedures set out in the notice convening the General Meeting at the end of this document. The lodging of the Form of Proxy (or the electronic appointment of a proxy) will not preclude you from attending and voting at the General Meeting in person if you so wish.

10. Recommendation

The Board considers the terms of the Cancellation and Re-registration outlined above to be in the best interests of Cosalt and its Shareholders as a whole. Accordingly, the Board recommends that you vote in favour of the Resolutions to be proposed at the General Meeting, as I intend to do in respect of my own holdings of Cosalt Shares.

In addition Oval has provided an indication of its current intention to vote in favour of the Cancellation and Re-registration and I will vote in favour of the Cancellation and Re-registration.

In total therefore, there is an intention to vote in favour of the Cancellation in respect of an aggregate number of 226,496,173 Cosalt Shares, equivalent to 56.01 per cent. of the issued share capital of Cosalt.

Yours faithfully,

David Ross

Chairman

COSALT PLC(the 'Company')

(incorporated and registered in England and Wales with registered no: 00019628)

Notice of General Meeting

Notice is hereby given that a General Meeting of the Company will be held at 9am on 27 February 2012 at the offices of the Company, Origin 4, Genesis Park, Origin Way, Grimsby DN37 9TZ.

You will be asked to consider and vote on the Resolutions below. The Resolutions will be proposed as special resolutions.

SPECIAL RESOLUTIONS

1. THAT, the listing of the Cosalt Shares on the premium segment of an Official List of the UK Listing Authority and admission to trading on London Stock Exchange plc's main market for the securities be cancelled, and that the Directors be and are hereby authorised to take all such steps which are necessary or desirable in order to effect such cancellation and application accordingly (the "Cancellation") ; and

2. THAT, conditional on the Cancellation becoming effective:

a. The Company be re-registered as a private limited company pursuant to section 97 of the Companies Act 2006

b. The Company's name be and it is changed to "Cosalt 2012 Limited"; and

c. The existing articles of association of the Company be replaced with the articles of association initialled by the Chairman for the purposes of identification.

Denise Robinson

Company Secretary

Registered Office: By order of the board

Origin 4

Genesis Park

Origin Way

Europarc

Grimsby

N.E. Lincolnshire

DN37 9TZ

United Kingdom

Registered in England No: 00019628 9 February 2012

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