EVRH.L Regulatory News (EVRH)

Armstrong Ventures plc

("Armstrong" or the "Company")

Change of Investing Policy, Placing and Notice of General Meeting

Introduction

The Company is pleased to report that its broker, Peterhouse, has conditionally placed 19,402,916,660  new Ordinary Shares with new and existing investors at a placing price of 0.012p pence per Ordinary Share to raise approximately £2.3 million for the Company (approximately £2 million after expenses).

The Company became an investing company under AIM Rules in August 2012 to invest in the resource and energy sectors. However, since then these sectors have not generally performed well and the Company has been unable to identify investment opportunities which the Board considers would be in the interests of Shareholders.

The Board has therefore considered a number of alternative strategies, including the possibility of winding the Company up and returning cash to Shareholders. However, the Board has concluded that it is in Shareholders' interests for the Company to continue as an investing company but to adopt a new investing policy in a sector that the Board considers is more likely to generate attractive returns for Shareholders. As the Company currently has approximately £500,000 in cash resources (representing 0.0136p per Share), the Board is also proposing to raise approximately £2,000,000 after expenses by means of the Placing.

The proposals are subject to the approval of Shareholders at a general meeting of the Company. The Company is therefore today sending a circular to Shareholders containing a notice convening the General Meeting of the Company to be held at the offices of Peterhouse Corporate Finance Limited at New Liverpool House, 15 Eldon Street, London, EC2M 7LD at 11.00 am on 17 July 2015. The circular will also be available on the Company's website at www.armstrongventures.com. The circular contains a letter from the Chairman of Armstrong explaining the background to, and reasons for, the Placing and the proposed change in the Company's investing policy, to set out why the Board considers the Placing and the adoption of the Proposed Investing Policy to be in the best interests of its Shareholders as a whole and to seek Shareholder approval for these proposals.

Background to and reasons for the change in investing policy

The Company's current investing policy is as follows:

"To invest principally, but not exclusively in the resources and energy sectors. The Company will initially focus on projects located in Asia but will also consider investments in other geographical regions. The Company may be either an active investor and acquire control of a single company or it may acquire non-controlling shareholdings. Once a target has been identified, additional funds may need to be raised by the Company to complete a transaction.

"The proposed investments to be made by the Company may be in either quoted or unquoted securities; made by direct acquisition; may be in companies, partnerships, joint ventures; or direct interests in projects and can be at any stage of development. The Company's equity interest in a proposed investment may range from a minority position to 100 per cent. ownership.

"The Company will identify and assess potential investment targets and where it believes further investigation is required, intends to appoint appropriately qualified advisers to assist.

"Where this is the case, it is intended to mitigate risk by undertaking an appropriate due diligence process. Any transaction constituting a reverse takeover under the AIM Rules will require shareholder approval. The possibility of building a broader portfolio of investment assets has not, however, been excluded."

As previously reported, the general market conditions for small AIM listed companies focusing on the resources and energy sectors has been extremely challenging. The Board has looked at a number of possible acquisitions for the Company, but none were suitable to be tabled for the consideration of the Shareholders. A greater proportion of the possible transactions that we looked at required funds to be raised as part of the acquisition and there has not been market support for such fund raisings in our focused sector. The outlook for market conditions in the resources and energy sectors continues to be challenging and we do not see any improvement in the near term horizon.

The Board has reviewed the Company's investment focus and concluded that there are likely to be more opportunities for a small AIM listed company in the media, technology and healthcaresectors. It is therefore proposed that the Company's investing policy be changed to enable opportunities in those sectors to be pursued subject to the approval of the Shareholders at the General Meeting.

The Company's Proposed Investing Policy is as follows:

"The Company will invest in businesses in the media, technology and healthcare sectors which have some or all of the following characteristics:

· strong management with a proven track record;

· ready for investment without the need for material re-structuring by the Company;

· generating positive cash flows or imminently likely to do so;

· an injection of new finances or specialist management will enhance the prospects and therefore the future value of the investment;

· the potential to deliver significant returns for the Company.

"Whilst the Company will be principally focused on making investments in private businesses, it would not rule out investment in listed businesses if this presents, in its judgment, the best opportunity for Shareholders.

"The Company intends to be an active investor in situations where the Company can make a clear contribution to the progress and development of the investment. In respect of other, more substantial investment opportunities, it is expected that the Company will be more of a passive investor.

"There will be no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. Where the Company builds a portfolio of related assets it is possible that there may be cross-holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate.

"The Company's primary objective is that of securing for the Shareholders the best possible value consistent with achieving, over time, both capital growth and income for Shareholders through developing profitability coupled with dividend payments on a sustainable basis."

The Placing

To enable the Company to take advantage of investment opportunities as they arise, the Company proposes to place 19,402,916,660 new Ordinary Shares at 0.012p per share, raising gross proceeds of £2,328,350 (approximately £2,000,000 net of expenses). The New Shares will represent approximately 84.08% of the Enlarged Share Capital.

The Placing is conditional, amongst other things, upon:

· the Resolutions being passed at the General Meeting; and

· the New Shares being allotted by 31 July 2015.

The New Shares will rank pari passu with the existing Ordinary Shares in all respects including the right to receive all dividends or other distributions declared, made or paid by the Company by reference to record dates falling after their respective dates of allotment.

The Placees will be issued one Warrant for every four New Shares subscribed by them in the Placing. No Warrants will be issued in respect of the Adviser Shares.

The total costs related to the Placing amount to approximately £330,000. Peterhouse and SRG have each agreed that they will apply all the fees due to them in connection with the Placing amounting to £301,350 in aggregate to subscribe for the Adviser Shares.

The Directors have each agreed to subscribe for 83,333,333 New Shares pursuant to the Placing.

New Board

The Board has agreed to appoint the New Directors subject to and with effect from the passing of the Resolutions at the General Meeting. The Board believes that the New Directors' broad collective experience in the media, technology and healthcare sectors together with their extensive network of contacts will assist them in the identification, evaluation and funding of appropriate investment opportunities. When necessary, other external professionals will be engaged to assist in the due diligence on prospective targets and their management teams.

Peter Redmond and Manish Kotecha have agreed to resign as Directors conditional upon and with effect from the passing of the Resolutions at the General Meeting. To provide continuity and ensure a smooth transition, Haresh Kanabar will step down as Chairman of the Board subject to and with effect the passing of the Resolutions at the General Meeting, but will remain as a Non-executive Director until 30 November 2015.

Details of the New Directors

Sean Nicolson

Sean is Executive Director of e-Therapeutics plc, an AIM listed drug discovery and development company. He has over 20 years' experience as a corporate finance lawyer and was previously an equity partner in the corporate team of Bond Dickinson LLP. Sean has many years' experience of advising companies in the media, technology and healthcare sectors on flotations, venture capital and private equity fundraisings, mergers and acquisitions, takeovers, joint ventures and corporate governance matters.

Peter Read FCA

Peter began his career with KPMG in 1976, becoming a partner in 1990 and Head of Transaction Services for the telecoms, media, technology (TMT) practice in 1998 and Head of the TMT practice in 2003. In 2008, Mr Read was appointed Chairman of KPMG's TMT practice and Chairman (EMA) of the global Japanese practice. He held these positions until retiring from KPMG in 2013. Over this six year period he was also the lead partner for key TMT clients including WPP, IBM, Informa and DMGT and European sub-groups of Japanese clients, including Sony, Sumitomo, Mazda and Hitachi.

General Meeting

The circular contains a notice convening the General Meeting of the Company to be held at the offices of Peterhouse Corporate Finance Limited at New Liverpool House, 15 Eldon Street, London, EC2M 7LD at 11.00 am on 17 July 2015.

The Resolutions to be proposed at the General Meeting are as follows:

· Resolution 1 is an ordinary resolution to approve the adoption of the Proposed Investing Policy.

· Resolution 2 is an ordinary resolution to authorise the Directors to allot Ordinary Shares.

· Resolution 3 is a special resolution to disapply pre-emption rights in relation to the issue of shares including the Placing Shares, the Adviser Shares and the associated Warrants.

-ENDS--

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DEFINITIONS