Kendrick Resources Regulatory News (KEN)

21 June 2010

Kenetics Group Limited ("Kenetics" or "the Company")

Issue of Equity and Update on Contract with Singapore Land Transport Authority

PLACING

Kenetics (AIM:KEN) announces that it has raised £300,000, before expenses, by way of a Placing of 7,500,000 new ordinary shares of 1 pence each in the Company, issued and allotted at a price of 4.0pence per new ordinary share. The shares have been placed with Ken Wong, Chairman and Chief Executive and Yeong Hin Yuen, COO of the Company. The Placing price represents a 60% premium to the mid market closing price of the Company's shares on Friday 18 June. The funds will be used for working capital to continue Kenetics fulfillment of its contract with the Singapore Land Transport Authority ("LTA") which is progressing very satisfactorily.

 Accordingly, application has been made for the new ordinary shares to be admitted to trading on AIM and it is expected that admission will take place on 23 June 2010.

Ken Wong and Yeong Hin Yuen, have subscribed for 5,625,000 and 1,875,000 new ordinary shares respectively. Following this transaction, their beneficial interest in the Company is as follows:

Ken Wong: Previous shareholding: 13,753,625 (41.24%) New shareholding 19,378,625 (47.44%)

Yeong Hin Yuen: Previous shareholding: 5,826,950 (17.47%) New shareholding: 7,701,950 (18.85%)

The issue of these new ordinary shares to directors is a related party transaction under the AIM Rules for Companies. Where a company whose shares are listed on AIM enters into a related party transaction, AIM Rule 13 requires the directors of the Company to consider, having consulted with the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned. John Lynton Jones and Terry Fuller (the independent directors) consider, having consulted with ZAI Corporate Finance Ltd, the Company's nominated adviser, that the terms of the related party transaction are fair and reasonable insofar as the Company's shareholders are concerned.

The new ordinary shares will rank pari passu with the existing shares of the Company. Following this allotment the total issued share capital of the Company will increase to 40, 849,466 ordinary shares.

UPDATE

Kenetics reports that it has made significant progress with its contract for the provision of On-board Bus Equipment ('OBE') for the LTA; it has built and tested prototypes and completed initial trials of these OBE, which include the Bus Card Validators ("BCV's"), a Bus Fare Console ("BFC"), a Bus Location System ("BLS") and a power distribution unit.

The Company has commenced building pre-production OBE units which are being installed, this month, initially on four trial buses and will be subsequently trialed on a further 170 buses by September this year.

Following successful operational trials, the OBEs are expected to be installed on 4000 public buses. The directors expect this programme to commence before the end of this year (2010). As previously stated in the Chairman's Statement accompanying the Preliminary Results announced on 11 May 2010, the Company would need to raise a further £2.5 million of additional working capital to undertake the commercial roll-out of this project.

Kenetics is confident that with its systems fully operational with the LTA, other public transport authorities will recognise the potential for this e-payment system for their own networks and interest is already being shown by a number from around the world.

Ken Wong, Chairman and CEO of Kenetics, said: "We are very pleased with the completion of this Placing at a premium to our share price and would like to thank our shareholders for their support.

"The Placing gives us the working capital to take forward this project for the LTA, and will help us to realise the massive potential Kenetics has. The placing also shows the confidence which investors have in Kenetics and our strategy. We look forward to driving the business forward during the current year. "

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