IQ-AI Regulatory News (IQAI)

5 April 2012

Flying Brands Limited (the "Company")

Refinancing of Flowers Direct deferred consideration payments

The Board wishes to announce that Flying Flowers (Jersey) Limited ("FFJ"), a subsidiary of the Company, has refinanced the deferred consideration payments due to be paid under the Flowers Direct transaction.

FFJ acquired the business operating under the 'Flowers Direct' name (as announced on 24 May 2010) for a total consideration of £2.95 million, satisfied by the payment of £1.45 million in cash and the issue of interest-free, unsecured loan notes to Palatine Private Equity Fund LP, formerly known as Zeus Private Equity Fund LP (No. LP011716) ("Palatine"), Zeus Founder Partner LP (No. SL005896) and Palatine Private Equity Private Investors LP, formerly known as Zeus Private Equity Private Investors LP (No.LP011715) to the value of £1.5 million. FFJ has repaid £0.5 million of these loan notes and FFJ and Palatine have agreed to refinance the outstanding £1 million debt pursuant to a new facility agreement dated 4 April 2012 between FFJ, the Company (as guarantor of FFJ's obligations) and Palatine ("Facility"). The Facility is secured by a second ranking charge in favour of Palatine over the freehold of Retreat Farm and is repayable in full on the earlier of either (i) completion of the disposal of Gardening Direct; or (ii) 31 December 2012.

This agreement, together with the proposed sale of its Garden Bird Supplies, Garden Centre Online and Listen2 businesses announced on 30 March,will allow the Company time to evaluate strategic options for its remaining gardening business.

For further information, please contact:

Flying Brands Limited 01245 228 300

Stephen Cook, Chief Executive

Stuart Dootson, Finance Director

Smithfield Consultants 020 7360 4900

John Kiely