Graphene Nanochem Regulatory News (GRPH)

Graphene NanoChem PLC

("Graphene NanoChem" or the "Group")

Issuance of Loan Notes with Warrants,

Resumption of Trading and

Update on Debt Rationalization

Darwin Capital Loan Note Issuance and Lifting of Trading Suspension

Graphene NanoChem plc. (AIM:GRPH), the international provider of nanotechnology performance enhancing solutions for global industries, is pleased to announce the execution of a subscription agreement for the issuance of up to £2.5m of Unsecured Convertible Loan Notes ("Loan Notes") as detailed below.

Pursuant to entry into the initial tranche of the Loan Notes, Graphene Nanochem has requested the suspension of trading in the Company's ordinary shares on AIM to be lifted and trading is expected to resume at 8:45 a.m. on 23 December 2016.

The proceeds from the Loan Notes will support the working capital requirements of the Company as it continues to advance the progress of its business turnaround plan as previously announced, particularly in crystallizing opportunities in its water and enhanced polymer divisions. The Company has determined that the funding by way of Loan Notes is the most prudent method at this time of its rebuilding period post the approval of the debt restructuring exercise.

The Loan Notes may be issued to Darwin Capital Limited ("Darwin") in three tranches. The Loan Notes are unsecured, have a zero coupon attached and are divided into 100 individual notes with a par value of £25,000 each ("Par Value"). Initially a minimum of 30 Loan Notes have been issued and Darwin have the option to subscribe for an additional 10 Loan Notes at any time over the next 5 business days. Subject to conditions and mutual agreement of the Company and Darwin, a further 30 Loan Notes may be issued on 17 March 2017 and then a further 30 Loan Notes may be issued on 9 June 2017.

For each £25,000 loan note issued, the Company will receive 90% of the Par Value, equivalent to £22,500 per individual loan note. The Company may redeem these Loan Notes at 105% of Par Value at any point. The Loan Notes are convertible at Darwin's election into new ordinary shares of 0.01p nominal value each in the Company ("Ordinary Shares") at the conversion price, being the lesser of 18.4375 pence per new Ordinary Share or 90% of the arithmetic average of five daily volume weighted average share price calculations selected by Darwin out of the twenty trading days prior to conversion.

Darwin has also been issued with detachable warrants to subscribe for 1,016,949 new Ordinary Shares in the Company ("Warrants") at an exercise price of 18.4375 pence per new Ordinary Share. The Warrants can be exercised over a five-year period from the date of this announcement. Further, Warrants equal to 25% of the additional Loan Notes amount will be issued at the point of issuance of the additional Loan Notes.

The Company has provided customary warranties, indemnities and undertakings, including customary negative pledges and anti-dilution protections, to Darwin in connection with the issue of the Loan Notes and Warrants. The Company has also paid an arrangement fee for the first tranche to Darwin, together with legal expenses incurred in connection with the Loan Notes.

As an illustration, if the first tranche of the Loan Notes were fully converted at 18.4375 pence they would result in the issue of 4,067,797 new Ordinary Shares, representing approximately 3.4% of the Company's enlarged issued share capital, excluding the Warrants held. Movement in the share price of Graphene Nanochem may alter the conversion price of the Loan Notes, potentially significantly. Further announcements will be made in due course, including upon conversion.

It is anticipated that Graphene Nanochem will receive net proceeds of approximately £622,500 pursuant to the first tranche of the Loan Notes.

Update on debt rationalization

The Company expects the successful debt restructuring exercise it has undertaken to now be unconditional by the end of the 1st quarter 2017 post completion of the administrative process and other conditions precedent, including non-core asset sales, as previously announced.

The Group's CEO, Jespal Deol commented: "Having successfully addressed the issues that led to our shares being suspended, this return to trading is a significant step in the right direction for us to build value for our stakeholders. We are continuing to make good progress in advancing our business in both our water and enhanced polymer divisions. The funds raised will allow us to effectively focus on crystallizing the opportunities that we have been working on and may seek to inject further capital into accelerating our operations further."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR").

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About Graphene NanoChem

Graphene Nanochem plc (AIM: GRPH), is an international provider of nanotechnology performance enhancing solutions for global industries. The Group employs nanoprocesses and nanomaterials to design, engineer and enhance the performance of mainstream products for a wide range of industrial applications. It has established two major functional platforms in the energy and water sectors, and the Group, through partnerships with established industry players, is focused on building market opportunities in both sectors whilst continuing its developmental work in other strategic application areas of nanotechnology.

Headquartered in Malaysia, Graphene Nanochem was admitted to the AIM of the London Stock Exchange on 26 March 2013, following the reverse acquisition of Biofutures International plc, and trades under the symbol GRPH.L. To find out more, please visit www.graphenenanochem.com.