Earthport Regulatory News (EPO)

8 November 2011

Earthport plc (the "Company")

Successful Placing

Highlights

·; Successfully raised gross proceeds of £10.6 million through an oversubscribed placing and subscription.

·; Funds to be used to accelerate growth, for geographic expansion and provide working capital.

Earthport, the global payments utility, is pleased to announce that it has raised gross proceeds of £10.6 million through the successful placing of 43,877,797 new ordinary shares (the "New Ordinary Shares") at 17 pence per share (the "Placing"), the issue of £1.6 million of Convertible Loan Notes at par and a conditional agreement to subscribe for a further 8,823,529 ordinary shares at 17 pence per share to raise £1.5 million, conditional on shareholder approval of the subscription (the "Conditional Subscription"). The funds have been raised from both existing and new institutional investors.

During the course of 2011, the Company has achieved some significant milestones in its development, including:

·; processing live transactions with a "direct to bank" solution for one of the largest payment companies in the world;

·; extending its cross border payment reach through an expanded relationship with Bank of America Merrill Lynch;

·; two new multinational clients on IBM's Global Expenses Reporting Service (GERS);

·; launching "epXchange", a web based point-of-sale service; and

·; qualifying as an FSA Authorised Payments Institution;

The funds raised will facilitate the continued growth of Earthport, particularly through a further increase in the sales team, planned geographic expansion, additions to the banking network to support client demand and the on-going development of the service and IT teams that support new client implementation, as well as providing general working capital.

The Placing is conditional only upon Admission of the New Ordinary Shares. Application will be made for the New Ordinary Shares issued pursuant to the Placing to be admitted to trading on AIM ("Admission"). Admission is expected to be effective on 11 November 2011. The New Ordinary Shares will rank pari passu in all respects with the existing issued ordinary shares.

Following Admission, the Company's enlarged issued share capital will comprise 255,166,052 ordinary shares ("Ordinary Shares") with one voting right per share. There are no shares held in treasury and the total number of voting rights in the Company is therefore 255,166,052.

This figure of 255,166,052 Ordinary Shares may be used by shareholders 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.

The Company will seek shareholder approval for the conversion of the Convertible Loan Notes into Ordinary Shares at a conversion price of 17 pence per share. Conversion of the Convertible Loan Notes will happen automatically if shareholder approval is obtained. The Directors propose to table a resolution to seek authority for the conversion at the Company's forthcoming annual general meeting expected to be held in December 2011.

If shareholder approval is not obtained, the Convertible Loan Notes will accrue interest at a rate of 1.0 per cent. per month with the notes becoming repayable immediately at the option of the relevant noteholder or, if unconverted, at the Company's option at any time on or after 31 December 2015.

At the same time, the Company will also seek shareholder approval for the authority to issue 8,823,529 new Ordinary Shares to satisfy the Conditional Subscription.

Schroder Investment Management Limited has subscribed for 3,529,412 New Ordinary Shares in the Placing. In addition, Henderson Global Investors have conditionally subscribed for 8,823,529 new Ordinary Shares at 17 pence per share for an aggregate consideration of £1.5 million, which is conditional on shareholder approval at the annual general meeting. Schroder Investment Management Limited and Henderson Global Investors are deemed to be related parties of Earthport by virtue of being Substantial Shareholders in the Company (as defined in the AIM Rules for Companies). As a consequence, the Directors consider, having consulted with their nominated adviser, Panmure Gordon, that the terms on which such commitments have been made are fair and reasonable insofar as shareholders are concerned.

Hank Uberoi, Executive Director, Earthport commented:

"We are pleased to have raised these funds and thank our existing shareholders for their continued support and welcome significant new institutional investors who join Earthport, through this oversubscribed placing, at a very exciting time in the Company's development.

"We continue to build Earthport as an infrastructure provider for global payments and our recent client wins and partnerships are testament to the success of our strategy. The additional funds will be used to continue to accelerate the growth of Earthport." 

For further information, please contact:

About Earthport

Earthport plc, a global financial services organisation, is a market leader in the provision of white-label cross border payment services. Through its international platform, Earthport provides low cost, secure, high volume global payment capabilities in 200 countries worldwide.

The Company has been making national and international payments and collections since 1998, and is regulated through its UK Financial Services Authority (FSA) status and SWIFT membership. Providing a transparent and reliable service, partners include some of the largest financial institutions and corporations in the world.

Earthport operates worldwide and is listed on the AIM market of the London Stock Exchange. To learn more, please visit www.earthport.com and follow us on Twitter @Earthport.