GEL.L Regulatory News (GEL)

20 May 2016

Greka Engineering & Technology Ltd

("Greka Engineering" or the "Company")

Proposed Delisting and EGM

Introduction

Further to the Company's announcement of its final results on 28 April 2016, in which it mentioned that it was considering whether the costs of maintaining its listing on AIM were justified by the benefits the listing brings, Greka Engineering now announces its intention to seek Shareholder approval for the cancellation of the admission of the Ordinary Shares to trading on AIM. The Board is proposing a resolution to approve the Delisting at an EGM to be held at 10.00 a.m. on 7 June 2016.

Reasons for the Delisting

The Directors have concluded that, for the reasons set out below, the costs of maintaining the Company's admission to AIM are not justified by the benefits gained from maintaining admission:

· the Ordinary Shares suffer from a lack of meaningful liquidity and their overall price performance since admission to AIM in September 2013 has been poor; and

· the ongoing costs associated with maintaining the listing on AIM are high relative to the Company's market capitalisation and there is a significant administrative and regulatory burden involved in admission to AIM.

Accordingly, the Board has concluded that it is no longer in the interests of the Company or its Shareholders as a whole for the Ordinary Shares to remain traded on AIM.

Principal effects of Delisting

The principal effects that the Delisting will have on Shareholders include the following:

· there will no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM (or any other recognised market or trading exchange);

· while the Ordinary Shares will remain freely transferable, they may be more difficult to sell compared to shares of companies traded on AIM (or any other recognised market or trading exchange);

· it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

· the Company will no longer be subject to the AIM Rules and, accordingly, Shareholders will no longer be afforded the protections given by the AIM Rules - in particular, the Company will not be bound to: make any public announcements of material events, or to announce interim or final results; comply with any of the corporate governance practices applicable to AIM companies; announce substantial transactions and related party transactions; or comply with the requirement to obtain shareholder approval for reverse takeovers and fundamental changes in the Company's business;

· the Company will cease to retain a nominated adviser and broker; and

· the Delisting might have either positive or negative taxation consequences for Shareholders (Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately).

Notwithstanding the Delisting, the Company will continue to comply with the applicable statutory requirements and the Company's articles of association.

The Board intends to continue to maintain the Company's website (www.grekaengineering.com) and to post updates on that website from time to time, although Shareholders should be aware that there will be no obligation on the Company to include the information required under AIM Rule 26 or to update the website as required by the AIM Rules. In addition, Shareholders are reminded that as the Company is registered in the Cayman Islands, Shareholders are not afforded the protections provided by the City Code on Takeovers and Mergers.

Process for Delisting

The Delisting is conditional on the approval of not less than 75 per cent. of votes cast by Shareholders (in person or by proxy) on the resolution regarding the Delisting to be proposed at the EGM.

Furthermore, Rule 41 of the AIM Rules requires an AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify such intended cancellation and separately inform the London Stock Exchange of its preferred cancellation date at least 20 business days prior to such date. In accordance with AIM Rule 41, the Directors have notified AIM of the Company's intention, subject to the resolution being passed at the EGM, to cancel the Company's admission of the Ordinary Shares to trading on AIM. Accordingly, if the resolution is passed at the EGM, the Delisting will become effective at 7.00 a.m. on 21 June 2016.

The Directors consider that the Delisting is in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the resolution to be proposed at the EGM as they intend to do in respect of their own beneficial holdings amounting to 312,125,606 Ordinary Shares (representing 76.2% of the Company's issued share capital).

Transactions in Ordinary Shares

Shareholders should note that, if effected, the Delisting will significantly reduce the liquidity and marketability of the Ordinary Shares. The Directors do not intend to provide, seek or support any arrangements whereby Ordinary Shares can be bought or sold on a matched bargain basis following the Delisting becoming effective. Accordingly, interests in Ordinary Shares are unlikely to be readily capable of sale and, where a buyer is identified, it will be difficult to place a fair value on any such sale.

GDGH Ltd., the Company's parent company, recognises that many Shareholders will not be able or willing to continue to own shares in the Company following Delisting. Therefore, an affiliate of GDGH Ltd. is making arrangements for Charles Stanley & Co. Limited (Paul Brotherhood 0207 033 4900) as broker to acquire (subject to the normal AIM close period rules) any Ordinary Shares which are available in the market until Delisting (up to a maximum number of 97,496,527, being those Ordinary Shares not owned by GDGH Ltd. or Randeep Grewal) at a price per Ordinary Share of 0.8p; this represents a premium of 28 per cent. to the closing price of the Ordinary Shares on AIM on 18 May 2016.

Circular

A circular containing the notice convening the EGM will be sent to shareholders shortly and will also be available (together with the Company's annual report and accounts for the year ended 31 December 2015) on the Company's website at www.grekaengineering.com.

Contacts:

For more information on Greka Engineering, please visit the Company's website at: www.grekaengineering.com.

DEFINITIONS