Nature Group Regulatory News (NGR)

13 December 2010

NATURE GROUP PLC

("Nature Group" or the "Company")

Acquisition and Share Placing

The Board of Nature Group, the AIM quoted provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, is pleased to announce the acquisition of International Slop Disposal (I.S.D.) B.V. ("ISD") and Ecoscrub Solutions B.V. ("Ecoscrub") and a share placing by the Company's Broker, W H Ireland to raise £11,000,000 gross proceeds by way of a placing of new ordinary shares of 0.2p ("Ordinary Shares") in the capital of the Company and a placing by W H Ireland of 2,195,000 existing Ordinary Shares on behalf of certain shareholders.

Acquisition and Placing Highlights

Ø Nature Group has agreed to acquire ISD, the largest maritime and offshore waste collection group in Rotterdam and the ARA (Amsterdam, Rotterdam and Antwerp) Region and Ecoscrub, ISD's associated vented gas scrubbing company, from Port Invest B.V. ("Portinvest") for a total consideration of £16,000,000 to be satisfied by the issue of 16,000,000 new Ordinary Shares and the payment of £8,000,000 in cash.

Ø Bernard Muller, Chairman of Portinvest, and Andreas Drenthen, CEO of ISD and Portinvest, will join the Board of Nature Group as Non-executive Deputy Chairman and CEO respectively.

Ø 22,000,000 new Ordinary Shares and 2,195,000 existing Ordinary Shares (together "Placing Shares") have been placed at 50p per share by W H Ireland with institutional and other investors. The placing was significantly oversubscribed and the size of the placing was partially increased to meet excess demand.

Ø The new Ordinary Shares included in the placing will raise £11,000,000 gross proceeds for the Company and will be used to meet the cash element of the consideration relating to the acquisition of ISD and Ecoscrub and to provide additional working capital for the enlarged Group.

Acquisition of ISD and Ecoscrub

The Company has entered into an agreement with Portinvest, a private Rotterdam-based company whereby it has agreed to purchase from Portinvest the whole of the issued share capitals of ISD and Ecoscrub.  The total consideration payable for the acquisition of ISD and Ecoscrub is £16,000,000 and will comprise the issue of 16,000,000 new Ordinary Shares at 50p per Ordinary Share and £8,000,000 in cash. Completion of the acquisition is expected to take place on or by 22 December 2010.

ISD is the largest maritime and offshore waste collection group in Rotterdam and the ARA region. ISD has approximately 60 per cent. of the collected maritime and offshore waste in the Port of Rotterdam. It operates a fleet of 10 barges and in recent years has been owned by Portinvest, a supplier of port and maritime services, which have been developed in association with the Burando Group, a long established oil storage and maritime services business headquartered in Rotterdam. Ecoscrub is ISD's associated vented gas scrubbing company.

Under an agreement for the provision of services to be entered into on completion of the acquisition between ISD, Portinvest, Burando Holding B.V. and the Company, Portinvest and Burando Group will continue to provide certain services to ISD and Ecoscrub. In addition, both Portinvest and Burando Group have agreed to assist in supporting and developing the business of ISD and Nature Group worldwide, through their significant ship owning, logistics and port connections in all major maritime areas. Certain specific opportunities in other key locations have already been identified as a result of these connections.

ISD has, in recent years, developed new business opportunities with oil industry clients in the North Sea and elsewhere, and the Board believes the integration of ISD with Nature Group will enable the enlarged Group to achieve further growth in Norway, the Netherlands and other areas.

In the year ended 31 December 2009, ISD handled 171,448 metric tonnes of maritime and offshore waste fluids, and on a turnover of €9,828,959 (£8,252,070) produced net profits after tax of €1,951,100 (£1,632,720). Ecoscrub, which is beginning to achieve modest revenues as new legislation takes effect requiring scrubbing of hydrocarbon vapours during oil cargo loading, made a small loss of €36,000  (£30,125) in 2009, largely as a result of investment in the company's technology development.

In the current year, ISD is expecting to increase its maritime and offshore waste throughput and to achieve a financial outturn for the year ended 31 December 2010 of no less than that achieved in 2009. Ecoscrub is anticipated to operate at break-even or better for the year ending 31 December 2010 with revenues expected to increase in 2011. 

Since early 2009, the Executive Directors of Nature Group have been engaged in commercial discussions with ISD, Bernard Muller, and Andreas Drenthen, as to co-operative business opportunities between the two organisations. In recent years, Nature Group has, from time to time, transhipped recovered oil to Nord Refinery in the Netherlands and both ISD and Nature Group are members of Euroshore, the association of port waste contractors in Europe.

The commercial benefits that are expected to result from a more formal corporate association, through the alliance of the significant ISD shipping and oil industry connections together with the position of ISD as the largest maritime and offshore waste collector in Rotterdam and the ARA Region, and the expanding South West Europe business within the Group supported by proven treatment capabilities, have led to the acquisition. The enlarged Group will have an extended coverage in Western Europe for maritime and offshore waste reception and treatment, and a number of potential synergies from operations as a single group.

Richard Eldridge, Nature Group's Chairman, commented:

"With the enlarged Nature Group having geographical coverage in key Western European and Norwegian locations, and through ISD a client base of international shipping companies, Nature Group has the opportunity to establish itself as a leading independent provider of maritime and offshore waste services to the shipping industry, and a key environmental solutions provider to the oil industry.

An exciting future for Nature Group lies ahead and we look forward to reporting on the achievement of further key milestones in the development of the enlarged Nature Group and its services to the shipping and oil industries."

Share Placing

22,000,000 new Ordinary Shares and 2,195,000 existing Ordinary Shares have been placed by W H Ireland with institutional and other investors. The placing was significantly oversubscribed and the size of the placing was partially increased to meet excess demand.

The Placing Shares will be issued at a price of 50p per share, representing a discount of approximately 14.5 per cent. to the closing mid price of 58.5p for an Ordinary Share on AIM at the close of business on 10 December 2010 being the last practicable date prior to this announcement.

The new Ordinary Shares included in the placing will raise £11,000,000 gross proceeds for the Company and will be used to meet the £8,000,000 cash element of the consideration relating to the acquisition of ISD and Ecoscrub and the balance will be used to provide additional working capital for the enlarged Group.

The new Ordinary Shares to be issued under the acquisition of ISD and Ecoscrub and under the placing will amount to 38,000,000 new Ordinary Shares in aggregate and will represent approximately 49.1 per cent. of the Company's enlarged issued share capital. Following the issue of these new Ordinary Shares there will be 77,435,155 Ordinary Shares in issue. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules.

Application will be made to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will be effective and that dealings in the new Ordinary Shares will take place on 21 December 2010.

The new Ordinary Shares will rank in full for all dividends and otherwise pari passu with the Company's existing Ordinary Shares from the date of Admission save that the new Ordinary Shares being issued to Portinvest as consideration for the acquisition will not participate in any dividend or distribution declared in respect of the financial year ending 31 December 2010.

2,195,000 existing Ordinary Shares included in the placing have been placed on behalf of certain Directors, their family interests and staff members of the Group. An aggregate of 1,345,000 existing Ordinary Shares are being placed on behalf of the following Directors of Nature Group as follows:

The House of Italy Limited, in which Peter Snell is a minority shareholder, has also placed 150,000 Ordinary Shares, reducing its holding to 200,000 Ordinary Shares.

Related party transaction

The sale of existing Ordinary Shares by Richard Eldridge, Peter Snell, Charles Fairweather and Stig Keller, directors of Nature Group, in the placing is a related party transaction pursuant to Rule 13 of the AIM Rules.

The Independent Directors of Nature Group, having consulted with the Company's Nominated Adviser, Northland Capital Partners Limited, consider the terms of the placing arrangements involving Richard Eldridge, Peter Snell, Charles Fairweather and Stig Keller to be fair and reasonable insofar as its shareholders are concerned.

Appointment of Bernard Muller and Andreas Drenthen to the Board

Bernard Muller, Chairman of Portinvest, and Andreas Drenthen, CEO of ISD and Portinvest, will, on completion of the acquisition of ISD and Ecoscrub, join the Board of Nature Group as Non-executive Deputy Chairman and CEO respectively. Further information in relation to these appointments will be announced separately.

For further informationplease visit www.naturegroup.org or contact one of the following: