Progility Regulatory News (PGY)

17 December 2012

ILX Group plc

('ILX', the 'Group' or the 'Company')

Issue of Convertible Loan

ILX Group plc (AIM: ILX), the AIM quoted provider of e-learning software and business training, announces it has entered into an agreement with Praxis Trustees Limited ("Praxis Trustees"), a subsidiary of the Praxis Group, to raise £400,000 by way of a five year convertible loan to ensure the Group has adequate funding to fulfil its near term obligations and growth strategy including completion of the recent acquisition of Obrar Limited ("Obrar"), a consulting services company.

 Praxis Trustees, as trustee of the DNY Trust, recently invested £1.2m in the Company's equity and will invest a further £400,000 through the issue of a loan note convertible into 4 million new ordinary shares of 10 pence each in the share capital of the Company ("Ordinary Shares") on commercial terms, on the basis that the note can be converted at any time on or before 31 December 2017. Interest will be payable at the rate 12% per annum. The loan note will be convertible into Ordinary Shares at a price of 10 pence per Ordinary Share and have a one for one warrant attached, exercisable at 10 pence per Ordinary Share, giving Praxis the potential to subscribe for a total of up to 8 million new Ordinary Shares.

 The Loan Note conversion rights cannot be exercised until the Company has all necessary authorities to enable conversion free from pre-emption rights. Neither the Loan Note conversion rights nor the warrants can be exercised unless either the exercising party will not incur a City Code mandatory offer obligation or it obtains a dispensation from such obligation.

Wayne Bos, Executive Chairman of ILX Group plc, said: "ILX Group has embarked on its new growth path with the recent cost restructure and new acquisition. This additional funding will ensure there are adequate resources to cover immediate obligations and the recently announced acquisition of Obrar."

Related Party Transaction

The issue of the convertible loan and warrants to Praxis Trustees (together the "Transaction")is classified as a related party transaction for the purposes of the AIM Rules by virtue Praxis Trustees being a substantial shareholder, as defined in the AIM Rules, in the Company. The Independent Director, Paul Lever (non-executive director) having consulted with finnCap, as Nominated Adviser to the Company, considers the terms of the Transaction to be fair and reasonable insofar as the Shareholders are concerned. In providing advice to the Independent Director, finnCap has taken into account the Independent Director's commercial assessment of this related party transaction.

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