Hightex Group Regulatory News (HTIG)

9 December 2011

Hightex Group plc

("Hightex" or the "Company")

Funding of up to £1.67 million comprising Subscription and Placing of 94,973,338 new Ordinary Shares and a Standby Loan Facility

Hightex, leading systems engineering company, which designs, fabricates and installs large area, cable supported, lightweight membrane roofs and facades worldwide, today announces that it has conditionally completed a funding of up to £1.67 million before expenses.

Key points:

·; Placing of 77,873,338 new Ordinary Shares and subscription of 17,100,000 new Ordinary Shares at 1.5 pence which, together with a Standby Loan Facility, total £1.67m before expenses

·; Includes provision of convertible unsecured loan of up to £250,000 ("Standby Loan Facility")

·; Proceeds to be used to strengthen balance sheet to enable Hightex to secure the tenders for additional contracts and increase its share of a growing market

Commenting on the placing, Frank Molter, Chief Executive of Hightex, said:

"The funding will strengthen Hightex's financial position and assist us in delivering our exciting pipeline of projects including the engineering and installation of the supporting cable system and membrane structure of the roof over the Maracana Stadium - the site of the final of the 2014 FIFA World Cup. We appreciate the support of our shareholders and look forward to more contracts being won in 2012. "

Fundraising and Use of Proceeds

The Company has conditionally completed a funding of up to £1.67 million before expenses, through:

·; the placing (the "Placing") by finnCap, acting as agent for the Company, of 77,873,338 new ordinary shares of one penny each ("Ordinary Shares") (the "Placing Shares") at 1.5 pence per Placing Share (the "Issue Price");

·; the subscription (the "Subscription") of 17,100,000 new Ordinary Shares (the "Subscription Shares") at the Issue Price; and

·; the provision of a £250,000 standby loan facility (the "Standby Loan Facility" and together with the Placing and Subscription, the "Funding").

The business model of Hightex remains to focus on large scale projects requiring the Company's specialism in innovative cable and membrane engineering which the Directors believe are the key components of the Company's knowhow. The Directors remain convinced that this is the correct strategy for the Company and are endeavouring to deliver upon a pipeline of active projects.

It is this business strategy that has successfully delivered three large contracts, worth in aggregate c. €45 million, the revenues from which were earned in 2010 and 2011 and there remains an active and growing pipeline of projects that the Company is actively targeting.

On 7 December 2011, the Company announced that it and its Brazilian construction partner, SEPA, had been selected to engineer and install the supporting cable system and membrane structure of the roof over the Maracana Stadium in Rio de Janeiro where the final of the 2014 FIFA World Cup, hosted in Brazil, will be played. This prestigious project has a value to Hightex substantially in excess of €10 million and the structure is planned to be completed in the first half of 2013. Hightex continues to work towards securing three other stadia projects in Brazil related to the 2014 World Cup.

Hightex has devoted considerable efforts across Brazil, in particular in relation to the FIFA World Cup of 2014 which is now beginning to bear fruit, in Europe, the Middle East and South East Asia. At present, the Board expects that the existing projects, contracted at the date of this announcement, to deliver revenues of approximately €10 million in the year to 31 December 2012, before the recently announced Maracana Stadium project.

The Board further believes that a strengthening of the Company's balance sheet will enable Hightex to secure the tenders for additional contracts and increase its share of a growing market. Accordingly, the proceeds of the Funding will be used to enable the Company to tender for and deliver upon new and existing contracts.

Directors' Shareholdings

It is proposed that Charles DesForges and Frank Molter will be participating in the Subscription and Charles Sebag-Montefiore is participating through the Placing. The interests of the Directors following the Funding will be as follows:

In addition, senior managers of the Company will subscribe for 8,400,000 Subscription Shares. It is noted that the participation in the Subscription by Frank Molter and the two senior managers represents the conversion of amounts due from the Company to these individuals of £256,500 in respect of unpaid salaries.

Related Party Transaction

The participation in the Funding by Mr Charles DesForges, Frank Molter, and Charles Sebag-Montefiore, as directors of the Company, constitute related party transactions pursuant to the AIM Rules for Companies. David Walker, an independent director not participating in the Funding considers, having consulted with finnCap, that the participation in the Funding by these directors is fair and reasonable insofar as the Shareholders are concerned.

Standby Loan Facility

The Standby Loan Facility has been provided by Wengen Limited, a company controlled by Mr John Gunn, an existing shareholder, and parties connected with him. Hightex, at its discretion, may draw down on up to £250,000 over a period of three years from 9 December 2011. Drawdown requires four weeks notice. Amounts advanced under the Standby Loan Facility carry a coupon of 8 per cent. per annum and are convertible into Ordinary Shares at the Company's discretion at 1.75 pence per share. An arrangement fee of £7,500, being 3 per cent. of the maximum value of the Standby Loan Facility, is payable after approval of the resolutions to be put forward at the general meeting detailed below, by Shareholders. A further fee of £7,500 will become payable either on drawdown or on 30 June 2012, if sums have not been called under the Standby Loan Facility by such date.

General Meeting

The Subscription and Placing are conditional upon, inter alia, shareholder approval to be sought at a General Meeting of the Company to be held on 28 December 2011 and Admission. A circular will be sent to shareholders of the Company later today, incorporating a notice of General Meeting.

Each of the Directors intends to vote in favour of the resolutions to be proposed at the General Meeting (the "Resolutions") in respect of their own beneficial holdings totalling 15,536,000 Ordinary Shares, representing, in aggregate 8.3 per cent. of the existing Ordinary Shares.

Shareholders should be aware that the Resolutions are inter-conditional and, if any is not passed, the Funding will not proceed. The Board believes that should Shareholders not vote in favour of the Resolutions, the Company may not have sufficient working capital to continue in its current guise and would have to find immediate alternative finance in order to continue to trade. There can be no assurance that any such finance would be available. Accordingly, David Walker, the independent director not participating in the Funding, strongly recommends that Shareholders vote in favour of the Resolutions.

Admission

Application will be made for the Placing Shares and Subscription Shares to be admitted to trading on AIM ("Admission"). It is expected that admission of 86,540,004 new Ordinary Shares (the "First Admission Shares") will become effective and dealings in such Ordinary Shares will commence on 29 December 2011. It is expected that admission of 8,333,334 new Ordinary Shares (the "Second Admission Shares") will become effective and dealings in these Ordinary Shares will commence on 4 January 2012. The Subscription Shares and Placing Shares will rank pari passu with the existing Ordinary Shares currently traded on AIM. Following Admission, there will be 282,820,727Ordinary Shares in issue.

Contact

Media enquiries

Funding Statistics

* Includes the Placing, Subscription and the Standby Loan Facility. The Subscription includes £256,500 in respect of amounts due from the Company that are being satisfied through the issue of New Ordinary Shares.

Expected Timetable of Principal Events