Graphene Nanochem Regulatory News (GRPH)

For immediate release 14 November 2016

Graphene NanoChem PLC

("Graphene NanoChem" or the "Group")

Proposed Share Capital Reorganisation and Notice of Annual General Meeting

Graphene NanoChem (AIM:GRPH), the international provider of nanotechnology performance enhancing solutions for global industries, announces a proposed share capital reorganisation and consolidation (''the Capital Reorganisation'') and proposals to seek authority to allot shares on a non-pre-emptive basis for cash.

The Company's Board believes that significant progress has been made in recent months in terms of executing a holistic turnaround plan, which includes a debt-rationalization plan. The Board also believes that in order to finance the further development of the Company's business, additional funds will be required by the Company in order to remain a going concern and it now needs to take appropriate steps to restructure the Company's share capital.

As such, a circular (the "Circular") and Notice of Annual General Meeting has been sent to shareholders to convene an Annual General Meeting of the Company to be held at Academy House, London Road, Camberley, Surrey GU15 3HL, at 10.30 a.m. (UK time) on 6 December 2016, at which resolutions will be proposed to shareholders in connection with the Capital Reorganisation.

Certain sections of the Chairman's letter from the Circular have been included below. A copy of the Circular will also be available shortly on the Company's website (www.graphenenanochem.com).

Unless otherwise stated, terms and expressions defined in the Circular have the same meaning in this announcement.

For further information:

The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 ("MAR").

Proposed Share Capital Reorganisation

and

Notice of Annual General Meeting

Introduction

The Company has today announced that the Annual General Meeting of the Company will be held at 10.30 a.m. on 6 December 2016 at which the Directors are proposing a share capital reorganisation and consolidation and to seek authority to allot shares on a non-pre-emptive basis for cash.

Background to and reasons for the proposed Capital Reorganisation

In order to finance the further development of the Company's business, the Board believes that additional funds will be required. The Company will seek to raise this additional capital by a potential placing of New Ordinary Shares following approval of the Capital Reorganisation. At present, no firm proposals exists in relation the proposed fundraising and any further developments in relation to this will be notified in due course.

The Company currently has in issue 116,536,536 Ordinary Shares of £0.20 each and as at 28 June 2016, being the last date of trading prior to suspension of trading, the middle market price of the Company's Existing Ordinary Shares is less than the nominal value of £0.20. As the Company cannot issue shares at a discount to their nominal value, the Board is proposing the Capital Reorganisation.

Subject to approval of Shareholders at the Annual General Meeting, the Board proposes to sub-divide each issued Existing Ordinary Share into one New Ordinary Share of £0.01 nominal value and one Deferred Share of £0.19 nominal value.

Immediately following the Capital Reorganization, the total number of New Ordinary Shares in issue will remain the same and each existing Shareholder will continue to hold one New Ordinary Share in place of each Existing Ordinary Share. New share certificates representing the New Ordinary Shares, will be issued to reference to the new nominal value of £0.01. No share certificates will be issued for the Deferred Shares.

Following the Capital Reorganisation, and assuming no further Existing Ordinary Shares are issued between the date of this Document and the Capital Reorganisation becoming effective, the issued share capital will comprise of 116,536,536 New Ordinary Shares and 116,536,536 Deferred Shares.

Deferred Shares

The Deferred Shares will have no right to vote, attend or speak at general meetings of the Company and will have no right to receive any dividend or other distribution and will have only limited rights to participate in any return of capital on a winding up or liquidation of the Company. No application will be made to the London Stock Exchange for admission of the Deferred Shares to trading on AIM and no share certificates will be issued in respect of the Deferred Shares.

Consideration of Section 656 of the Companies Act 2006

The requirements of Section 656 of the Act were brought to the attention of the Directors as part of the audit of the financial statements as at 31 December 2015. Section 656 requires that, where the net assets of a public company are half or less than half of its called-up share capital, the directors must convene a general meeting of the company to consider whether any, and if so what, steps should be taken to deal with the situation. The Directors have noted that, as at 31 December 2015, the net assets of the Company are less than half of the nominal value of its called-up share capital. It is the Directors current view that the most appropriate course of action in order to address the situation is to continue to maintain tight control over the running costs of the Company and to continue to monitor the cash requirements of the Company. In addition, the Directors believe that the approval of the Capital Reorganisation, together with the passing of Resolutions 5, 6 and 7 being proposed at the Annual General Meeting to be held on 6 December 2016, would allow the Company to issue further equity, as appropriate and required and that no other actions or steps need then be taken by the Board. The Board does however welcome dialogues with shareholders on this point and the AGM will provide a forum for such discussions.

Notice of Annual General Meeting

In order to give effect to the Proposals, the Resolutions need to be approved by the Shareholders in General Meeting. In addition to Resolutions 5 and 8 required to effect the Capital Reorganisation, if order to enable the Company raise further funds following the Capital Reorganisation, the Directors are also proposing Resolutions 6 and 7 at the Annual General Meeting in order to authorise the Directors to allot shares (or grant rights to subscribe for or convert any security into shares) in the capital of the Company for cash on a non-pre-emptive basis pursuant to Section 551 and 570 of the Act up to an aggregate nominal amount of £1,119,665 (assuming the Capital Reorganisation is approved pursuant to the passing of Resolutions 5 and 8 at the Annual General Meeting, such amount representing approximately 96 per cent. of the Company's existing issued share capital.

Certain ordinary business will also be proposed at the Annual General Meeting, including the re-election of Tan Sri Dato' Sri Abi Musa Asa'ari Bin Mohamed Nor and Dato' Jespal Singh Deol Balbir Singh as Directors of the Company, the laying of the audited financial statements of the Company for the period ended 31 December 2015 and the re-appointment of the Company's auditors until the Company's next Annual General Meeting and to fix their remuneration accordingly. Full details of the Resolutions are contained in the Notice and a further commentary is set out at the end of the Circular.

Shareholders will therefore find set out at the end of the Circular a notice convening the Annual General Meeting of the Company to be held at Academy House, London Road, Camberley Surrey GU15 3HL at 10.30 a.m. on 6 December 2016.

A Form of Proxy is enclosed with the Circular for use by Shareholders at the Annual General Meeting. If you are a Shareholder, you are requested to complete and sign the Form of Proxy, whether or not you propose to attend the Annual General Meeting in person, and return it to the Company's registrars, Share Registrars Limited, The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR, United Kingdom (or faxed to Share Registrars Limited on 01252 719232) so as to be received no later than 10.30 a.m. on 2 December 2016. The completion and return of a Form of Proxy will not preclude you from attending and voting at the Annual General Meeting in person should you subsequently wish to do so.

The Directors consider that the Proposals are in the best interests of Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own shareholdings, which in aggregate total 39,762,939 Existing Ordinary Shares representing approximately 34.12 per cent. of the existing issued ordinary share capital of the Company.

Application will be made to the London Stock Exchange for the New Ordinary Shares created pursuant to the Capital Reorganisation to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings will commence at 8.00 a.m. on or around 7 December 2016.