PWS.L Regulatory News (PWS)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY NEW ORDINARY SHARES, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER WITH RESPECT TO THE PROPOSED PLACING.

Pinewood Group plc

("Pinewood" or the "Company")

Proposed Placing of 8,000,000 New Ordinary Shares

at 375 pence per share to raise £30 million

and

Notice of General Meeting

Pinewood Group plc, a leading provider of services to the global film and television industry, is pleased to announce, subject to, inter alia, Shareholder approval, a fund raise of £30 million before expenses through a proposed placing with institutional and other investors of 8,000,000 New Ordinary Shares at a price of 375 pence per share.

In addition, the Company announces that new bank facilities of up to £135 million have been agreed with Lloyds Bank plc, The Royal Bank of Scotland plc, HSBC Bank plc and Barclays Bank plc.

The Net Proceeds of approximately £28.7 million are intended to be used to part fund the first phase of development of the Pinewood Studios Development Framework ("PSDF") in combination with the New Debt Facilities. In the short term, the Net Proceeds will be used to repay part of the existing debt facilities in order to manage the Group's capital efficiently and to reduce interest costs. This will then provide headroom in the New Debt Facilities to enable the draw down of funds, as required, for phase one of the PSDF.

At the same time as the placing of the 8,000,000 New Ordinary Shares, 8,266,667 Existing Ordinary Shares will be placed on behalf of a small number of existing Shareholders, with institutional and other investors at a price of 375 pence per share.

The Placing is conditional, inter alia, on the passing of the Resolutions by Shareholders at the General Meeting, notice of which is set out on page 22 of the circular to Shareholders ("Circular"). If the Resolutions are passed, the Placing Shares will be allotted or sold immediately after the General Meeting and Admission of the New Ordinary Shares is expected to occur at 8.00 a.m. on 17 April 2015. The Placing is not underwritten.

The Circular, extracts of which are set out below, is expected to be posted today, and will provide details of, and the background to, the Placing, and set out the reasons why the Board believes that the Placing is in the best interests of the Company and its Shareholders and to seek Shareholder approval of the Resolutions at the forthcoming General Meeting, which will be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.30 a.m. on 16 April 2015.

Copies of the Circular will be available shortly on the Company's website (www.pinewoodgroup.com) and will be available, free of charge, at the Company's registered office at Pinewood Studios, Pinewood Road, Iver Heath, Buckinghamshire SL0 0NH during normal business hours on any weekday (public holidays excepted) up to and including 16 April 2015. Unless otherwise defined in this announcement, all defined terms used in this announcement shall have the meaning ascribed to them in the Circular.

Ivan Dunleavy, Chief Executive Officer, commented:

"Today's announcement represents another significant step forward in the ongoing development of the Company and the implementation of PSDF to the benefit of shareholders as a whole and the UK creative industries. The Board is encouraged by the visibility of the level of forward bookings for the next financial year."

A copy of this announcement will be published, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Pinewood's website at www.pinewoodgroup.com. For the avoidance of doubt, neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of securities in the Company.

This announcement is not an invitation nor is it intended to be an inducement to engage in investment activity for the purpose of section 21 of FSMA. The Placing Shares are in any event being placed only with (i) persons who have professional experience in matters relating to investments and who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 of the United Kingdom (the "Financial Promotion Order") or (ii) persons who fall within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons. Anyone other than a relevant person must not rely on this announcement.

Nplus1 Singer Advisory LLP ("N+1 Singer") is acting as Nominated Adviser and broker to the Company in relation to the Placing. N+1 Singer, which is a member of the London Stock Exchange and is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and for no one else in relation to the Placing. N+1 Singer will not be responsible to any other person for providing the protections afforded to its clients nor for advising any other person in connection with the matters contained in this announcement.

This announcement has been issued by, and is the sole responsibility of, the Company. N+1 Singer has not authorised the contents of any part of this announcement and no representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by N+1 Singer, or by any of its respective affiliates or agents, as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to any interested party, and any liability therefore is expressly disclaimed.

All statements in this announcement other than statements of historical fact are, or may be deemed to be, "forward-looking statements". In some cases, these forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout the announcement and include statements regarding the intentions, beliefs or current expectations of the Company and/or Directors concerning, among other things, the trading performance, results of operations, financial condition, liquidity, prospects and dividend policy of the Company. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, result of operations, financial condition, liquidity and dividend policy may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the performance, results of statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that may cause these differences include, but are not limited to, changes in economic conditions generally; changes in interest rates and currency fluctuations; impairments in the value of the Company's assets; legislative/regulatory changes; changes in taxation regimes; the availability and cost of capital for future expenditure; the availability of suitable financing; the ability of the Group to retain and attract suitably experienced personnel and competition within the industry. Prospective investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision.

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia). The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering of securities in the United States.

Enquiries

Extracts from the Circular

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

1. Each of the times and dates above are indicative only and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by the Company to Shareholders by announcement through a regulatory information service.

2. All of the above times refer to London times unless otherwise stated. Admission and the commencement of dealings in the New Ordinary Shares on AIM are conditional on, inter alia, the passing of the Resolutions at the General Meeting.

1. Introduction

The Company announced on 31 March 2015 that it is proposing to raise £30 million (before fees and expenses) through a placing by N+1 Singer of 8,000,000 New Ordinary Shares at a price of 375 pence per share. The Placing Price represents an 11.8 per cent. discount to the Closing Price of 425 pence per Ordinary Share on 30 March 2015 (being the latest practicable date prior to the announcement of the Placing).

The Placing is conditional, inter alia, on the passing by the Shareholders of the Resolutions at the General Meeting, including a special resolution which will give the Directors the required authority to disapply statutory pre-emption rights in respect of the allotment of the New Ordinary Shares. Subject to all relevant conditions being satisfied (or, if applicable, waived), it is expected that the New Ordinary Shares will be admitted to trading on AIM on or around 17 April 2015.

The Net Proceeds are intended to be used to part fund the first phase of development of the Pinewood Studios Development Framework ("PSDF"). The PSDF will include new stages which are largely interchangeable for film, television, video games and associated services and the Board believes that the PSDF will deliver significant benefit for the Group by an expansion of its facilities and an increase in capacity. Phase 1 of the PSDF will be funded through the Placing and the proposed New Debt Facilities. Further details on the PSDF and the New Debt Facilities are set out below.

The purpose of the Circular is to outline the reasons for, and provide further information on, the proposed placing of New Ordinary Shares and why the Board believes it to be in the best interests of the Company and Shareholders as a whole.

The Board believes that raising equity finance with the flexibility provided by a non pre-emptive placing is the most appropriate method for the Company at this time. The Board aims to build a more diversified shareholder base that is able to support the Company through subsequent phases of growth and it is the Board's belief that this requires support from new institutional investors. The Board believes that the potential long term value creation for the benefit of Shareholders arising from the application of the Net Proceeds outweighs the dilutive effects of the Placing.

Notice of the General Meeting is set out at the end of the Circular. The Resolutions will be proposed at the General Meeting to approve the issue of the New Ordinary Shares pursuant to the Placing. The General Meeting has been convened for 10.30 a.m. on 16 April 2015 and will take place at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL.

2. Background to and Reasons for the Placing

Drivers of Growth

As summarised below, there is increasing global demand for studio facilities from the film, television and video games industries which is benefitting, and the Directors believe will continue to benefit, the Group. These industries are forecast to grow at a compound annual growth rate of approximately 6 per cent. between 2011 and 2016 and such growth is being driven by (i) global consumer demand and spending; and (ii) economic benefits which have increased competition to attract large, internationally mobile film and high-end television production and post-production activity. In addition, there is an ongoing shift towards digital film technology and the demands of major film production companies for studios with larger stages, backlot space and greater levels of inherent connectivity and security.

Film

· Global consumer demand for film is growing, driven by greater accessibility and quality of content

· Estimated global box office revenues for films were US$38 billion in 2014 (an increase of 5 per cent. from 2013)

· Total film spend in the UK was circa £1.5 billion in 2014 (an increase of 34.6 per cent. from 2013)

· UK inward investment spending was estimated to be £1.2 billion in 2014 (2013: circa £0.9 billion)

· Chinese box office revenues were estimated to have increased by 15.8 per cent. in 2014 to circa US$3.6 billion and China is the world's second largest cinema market

Television

· Television viewing is rising globally, driven by new delivery services such as Netflix and Amazon and the trend towards high-end television productions, like Da Vinci's Demons, Game of Thrones and House of Cards, to capture mass audiences

· UK television channels' spend on content in 2013 increased by 3.7 per cent. from 2012 to circa £5.8 billion

· UK television industry revenue in 2013 rose by 3.4 per cent. from 2012 to circa £12.9 billion

· UK inward investment spending on high-end television totalled circa £287 million in 2014

Games

· There is high consumer demand for video games with cinematic quality content in the UK

· There is continued investment in high budget franchises in the UK

· The number of UK games developers increased at an annual rate of 22 per cent. between 2011 and 2013

· There are circa 1,900 games businesses in the UK which contributed up to circa £1.7 billion to the economy in 2014

The PSDF

Pinewood is a leading provider of studio and related services to the global screen based industries. However, the studios are now operating at close to full capacity, whilst there is an increasing demand for studio facilities globally, as described above. The PSDF is intended to address the Group's capacity constraints by ultimately doubling the existing capacity of Pinewood Studios through the addition of a total of approximately 100,000m2 of new facilities, comprising stages, workshops and production offices. It is intended that the PSDF will be developed over three phases, each being up to five years in length, with the development of phase 1 expected to commence in the first half of 2015 and scheduled for completion in the first quarter of 2016. The total cost of the PSDF is estimated at £200 million, with phases 2 and 3 subject to demand requirements over time.

The first phase of the PSDF will comprise five new large stages (totalling 15,820m2), which will increase the overall studio production space at Pinewood Studios by approximately 50 per cent., ten workshops (totalling 13,274m2), two production offices (totalling 6,770m2) and associated infrastructure and landscaping (totalling 120m2). The phase 1 works will also include the new infrastructure required for the PSDF. Completion of the first phase will significantly expand Pinewood's overall capacity to accommodate major feature films, television programmes, commercials and other screen-based productions. The Directors believe it will also enhance Pinewood's position as a leading facility for the global screen-based industries. The cost of construction of phase 1 of the PSDF is anticipated to be approximately £65 million, which is to be funded by the Net Proceeds and the New Debt Facilities.

Planning permission for the PSDF was granted by the Secretary of State on 18 June 2014. This supersedes the Masterplan Consent granted in 2006 for the development of Pinewood Studios, as it is currently configured, and includes consent for minor reconfiguration of certain of Pinewood's existing facilities, as well as the development of the PSDF site. The planning permission was subject to planning conditions and the requisite Reserved Matters Approval of phase 1 of the PSDF was granted on 23 December 2014.

3. New Debt Facilities

The Company has agreed new banking facilities of up to £135 million with Lloyds Bank plc, The Royal Bank of Scotland plc, HSBC Bank plc and Barclays Bank PLC, comprising:

- a £100 million term loan facility committed to 29 May 2019, £45 million of which will be utilised to refinance the Company's existing committed debt facilities and the remaining £55 million (the "Development Tranche") will be available to draw down prior to 30 September 2016 to fund phase 1 of the PSDF, with repayments commencing in June 2017; and

- a £35 million multicurrency revolving credit facility, which will be available to draw down until 30 April 2019.

The New Debt Facilities will be used to part fund phase 1 of the PSDF (approximately £35 million), to refinance the Company's existing committed debt facilities totalling £85 million (of which approximately £75 million is currently outstanding) and for general corporate purposes. The New Debt Facilities are, inter alia, conditional on certain customary conditions precedent, so that on Admission the existing committed debt facilities will be refinanced in full. Utilisation of the Development Tranche is then conditional on certain further conditions precedent, including the signing of a design and build contract in respect of phase 1 of the PSDF on prescribed terms.

4. Use of Proceeds

The Net Proceeds of approximately £28.7 million will be used to part fund the implementation of phase 1 of the PSDF in combination with the New Debt Facilities. In the short term, the Net Proceeds will be used to repay part of the existing debt facilities in order to manage the Group's capital efficiently and to reduce interest costs. This will then provide headroom in the New Debt Facilities to enable the draw down of funds, as required, for phase 1 of the PSDF.

5. Proposed Admission to the Premium Segment of the Official List and the Main Market

 It is the Board's current intention to apply in due course for the admission of the Ordinary Shares to the premium segment of the Official List of the UK Listing Authority and to trading on the Main Market. Any application will be subject to review and approval by the FCA, including the satisfaction of the UKLA's eligibility criteria. The Peel Group has confirmed to the Company and N+1 Singer that it is supportive of the proposed move by the Company to the Main Market and will seek to assist the Company with that move in due course. Cancellation of the admission of the Ordinary Shares to trading on AIM would be effected as part of the process. Shareholders will be kept fully informed of the Board's future intentions in this regard. The Board intends to seek a waiver from the London Stock Exchange from the requirement under AIM Rule 41 to obtain Shareholder consent for the Cancellation. A request for such a waiver would be on the basis that Shareholders would still have the ability to trade the Ordinary Shares on a recognised investment exchange following the Cancellation. The Company would still be required to give at least 20 Business Days' notice of the Cancellation.

6. Current Trading and Outlook

In the interim results for the six months ended 30 September 2014, published on 25 November 2014, the Company reported that it had made positive progress since the interim period end and this has continued to date. As a result, the Directors believe that the financial performance for the year to 31 March 2015 will be in line with expectations.

Once again, film revenues and associated activities have performed strongly. During the financial year to 31 March 2015, the Company has seen high levels of stage utilisation and hosted a number of major feature films such as 'Star Wars: Episode VII The Force Awakens'; 'Alice in Wonderland: Through the Looking Glass'; 'The Huntsman'; 'Avengers: Age of Ultron' and the start of the 24th Bond film, 'Spectre'.

As reported at the time of the interim results, television revenues were markedly lower than in the same period in the previous financial year. As expected, during the second half of the year television revenues have performed more strongly, with new productions such as 'Weekend Kitchen', 'Birds of a Feather' and 'I live with Models' and returning shows such as 'Would I Lie To You?' and the National Lottery utilising the Group's facilities.

Elsewhere in the Media Services segment, Digital Content Services have performed well. Progress has been made with the Group's international strategy, which is making meaningful contributions to revenue, including now from China. Demand for the Company's Media Hub offering remains high, with occupancy at approximately 98 per cent.

Pinewood Studio Wales began operations in January 2015 and is currently hosting the pilot of a high-end television production, 'The Bastard Executioner'.

During the course of the financial year, the Company invested in, and advised on, investment in two film productions, 'Take Down' and 'Genius'. 'Take Down' was a co-production between the Governments of Wales and the Isle of Man and used extensive locations in both territories.In December 2014, Pinewood achieved the significant strategic objective of regaining full ownership of the Shepperton Studios Property Partnership through the acquisition of the 50 per cent. interest owned by clients of Aviva Investors for a total cash payment of £36.8 million. This amount included full repayment of £24.0 million of drawn debt and the cancellation of the SSPP facility provided by Aviva.

The Board is encouraged by the visibility of the level of forward bookings for the financial year to 31 March 2016.

7. Board Changes

On Admission, it is intended that Neil Lees and Tom Allison, both non-executive Directors and representatives of the Company's largest shareholder, the Peel Group, will resign from the Board. Steven Underwood will remain as the sole board representative of the Peel Group.

The Board intends to appoint at least one additional independent non-executive director in due course.

8. Related Party Transaction

Warren James is a related party of the Company, as defined by the AIM Rules, as it has an existing shareholding in the Company of 26.7 per cent. and so is a 'Substantial Shareholder' for the purposes of the AIM Rules. It is proposed that Warren James will participate in the Placing and subscribe for 1,797,842 New Ordinary Shares at the Placing Price, and such participation will be classified as a Related Party Transaction pursuant to the AIM Rules.

The Directors, having consulted with N+1 Singer as the Company's nominated adviser, consider that the terms of this Related Party Transaction are fair and reasonable insofar as the Shareholders are concerned.

9. Information on the Placing

(a) Placing of New Ordinary Shares

The Company is proposing to raise £30 million (before expenses) by way of a Placing of 8,000,000 New Ordinary Shares at the Placing Price. The New Ordinary Shares will represent approximately 13.9 per cent. of the Enlarged Share Capital. The Placing Price represents a discount of 11.8 per cent. to the Closing Price of 425 pence per Ordinary Share on 30 March 2015 (being the latest practicable date prior to the announcement of the Placing).

(b) Selling Shareholders

In addition to the Placing of New Ordinary Shares, the Peel Group (through its subsidiary Peel Holdings) and the Isle of Man Treasury have agreed to sell 6,239,840 and 2,026,827 Existing Ordinary Shares, respectively, at the Placing Price, being in aggregate approximately 16.7 per cent. of the issued Existing Ordinary Shares. Immediately following Admission, the Enlarged Share Capital of the Company will be held as follows:

(c) Directors' participation in the Placing

It is intended that certain of the Directors will subscribe for New Ordinary Shares in the Placing at the Placing Price and details are set out below:

 (d) The Placing

Pursuant to the Placing, both the 8,000,000 New Ordinary Shares and the 8,266,667 Sale Shares have been conditionally placed with new and existing investors at the Placing Price.

In connection with the Placing, the Company and the Selling Shareholders have entered into the Placing Agreements pursuant to which N+1 Singer has agreed, in accordance with its terms, to use reasonable endeavours to place the Placing Shares with certain institutional and other investors.

The Placing is conditional, inter alia, on:

- the passing of the Resolutions;

- the conditions in the Placing Agreements being satisfied or (if applicable) waived and the Placing Agreements not having been terminated in accordance with their terms prior to Admission; and

- Admission becoming effective by no later than 8.00 a.m. on 17 April 2015 (or such later time and/or date, being no later than 8.00 a.m. on 17 May 2015, as the Company and N+1 Singer may agree).

The Placing Agreements contain customary warranties given by the Company and each of the Selling Shareholders to N+1 Singer and a customary indemnity given by the Company and each of the Selling Shareholders to N+1 Singer in respect of liabilities arising out of or in connection with the Placing. N+1 Singer is entitled to terminate the Placing Agreements in certain circumstances prior to Admission, including circumstances where any of the warranties are found not to be true or accurate or were misleading and which in any such case is material, or the occurrence of certain force majeure events.

The New Ordinary Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of the New Ordinary Shares, respectively and will otherwise be identical to and rank on Admission pari passu in all respects with the Existing Ordinary Shares. The Placing Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

10. General Meeting

Set out on page 22 of the Circular is a notice convening the General Meeting of the Company to be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.30 a.m. on 16 April 2015, at which the Resolutions summarised below will be proposed:

1. an ordinary resolution to grant authority to the Directors to allot the New Ordinary Shares, representing approximately 16.2 per cent. of the Existing Ordinary Shares; and

2. conditional on the passing of the ordinary resolution to allot the New Ordinary Shares, a special resolution to disapply the statutory pre-emption rights in relation to the allotment of the New Ordinary Shares.

The Resolutions are set out in full within the notice convening the General Meeting.

11. Irrevocable undertakings

Each of Peel Holdings, Warren James and the Isle of Man Treasury has given an irrevocable undertaking to vote in favour of the Resolutions in respect of its own legal and/or beneficial holding of Existing Ordinary Shares which, in aggregate, total 46,760,966 Existing Ordinary Shares, representing in aggregate 94.6 per cent. of the Existing Ordinary Shares.

12. Shareholder agreements

The Company, N+1 Singer, Peel Holdings (IOM) and Peel Holdings Land and Property Group Limited (both of which companies are members of the Peel Group) have entered into the Peel Relationship Agreement and the Company, N+1 Singer and Warren James have entered into the Warren James Relationship Agreement, both of which are conditional on Admission. The previous undertakings given by Peel Holdings Land and Property Group Limited and Warren James to the Company and N+1 Singer in 2012, which contain similar provisions to those in the Peel Relationship Agreement and the Warren James Relationship Agreement, will terminate on Admission.

(a) Peel Relationship Agreement

The Peel Relationship Agreement regulates certain aspects of the continuing relationship between the Group and the Peel Group to ensure that the Group is capable at all times of carrying on its business independently of the Peel Group and that any future transactions between the Group and the Peel Group are on an arm's length basis. The Peel Relationship Agreement also provides that there should always be a majority of directors on the Board, and on any committee of the Board, who are independent of the Company's shareholders.

The Peel Relationship Agreement provides that the Peel Group will not acquire Ordinary Shares for one year from Admission, irrespective of whether the Peel Relationship Agreement terminates prior to that date. This restriction is subject to certain exceptions, including for acquisitions made pursuant to a general offer or scheme of arrangement or to maintain an aggregate holding of approximately 39.1 per cent. of the Company's issued share capital or at any time with N+1 Singer's consent.

The Company has undertaken to the Peel Group that (i) it will not without the consent of Peel Holdings (IOM) create a new class of security, alter the rights attaching to the Ordinary Shares, grant any options to subscribe for new Ordinary Shares or allot or issue any shares for non-cash consideration; and (ii) it will enforce the terms of the Warren James Relationship Agreement.

The Peel Relationship Agreement terminates on the date upon which the Ordinary Shares are no longer admitted to trading on AIM, the Main Market or any other recognised investment exchange or any other regulated or prescribed market or, if earlier, the later of the date upon which (i) the Peel Group ceases to hold 25 per cent. or more of the Ordinary Shares and (ii) the Peel Group ceases to have a representative director on the Board.

(b) Warren James Relationship Agreement

The Warren James Relationship Agreement regulates certain aspects of the continuing relationship between the Group and the Warren James Group to ensure that the Group is capable at all times of carrying on its business independently of Warren James and that any future transactions between the Group and the Warren James Group are on an arm's length basis. The Warren James Relationship Agreement also provides that there should always be a majority of directors on the Board, and on any committee of the Board, who are independent of the Company's shareholders.

The Warren James Relationship Agreement provides that the Warren James Group will not acquire shares in the Company for one year from Admission, irrespective of whether the Warren James Relationship Agreement terminates prior to that date. This restriction is subject to certain exceptions, including for acquisitions made pursuant to a general offer or scheme of arrangement or to maintain an aggregate holding of 25.1 per cent. of the Company's issued share capital or at any time with N+1 Singer's consent.

The Company has undertaken to the Warren James Group that (i) it will not without Warren James' consent, as the case may be, create a new class of security, alter the rights attaching to the Ordinary Shares, grant any options to subscribe for new Ordinary Shares or allot or issue any shares for non-cash consideration; and (ii) it will enforce the terms of the Peel Relationship Agreement.

The Warren James Relationship Agreement terminates on the date upon which the Ordinary Shares are no longer admitted to trading either on AIM, the Main Market or any other recognised investment exchange or any other regulated or prescribed market or, if earlier, the date upon which the Warren James Group ceases to hold 25 per cent. or more of the Ordinary Shares.

(c) Lock-in Agreements

The Company and N+1 Singer have entered into the Lock-in Agreements with each of Peel Holdings (IOM) and Warren James pursuant to which Peel Holdings (IOM) and Warren James have undertaken, subject to certain limited exceptions, including a sale in the event of an offer for all the Ordinary Shares in the Company, not to dispose of any of the Ordinary Shares which they hold, or another group company holds, immediately following the Placing for a period of 12 months from Admission.

13. The City Code

Under Rule 9 of the City Code, where any person acquires, whether by a single transaction or a series of transactions over a period of time, an interest in shares which (taken together with shares already held by him and any interest in shares held or acquired by persons acting in concert with him) carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, that person is normally required to make a general offer to all of the holders of any class of equity share capital, whether voting or non-voting, or other transferable securities carrying voting rights in that company, to acquire the balance of their interests in the company.

Rule 9 of the City Code also provides that, among other things, when any person who, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an additional interest in shares which increases the percentage of shares carrying voting rights in which he is interested, then that person is normally required to make a general offer to all the holders of any class of equity share capital, whether voting or non-voting, or other transferable securities carrying voting rights in that company, to acquire the balance of their interests in the company.

An offer under Rule 9 of the City Code must be in cash (or with a cash alternative) and at the highest price paid within the preceding twelve months for any shares in the company by the person required to make the offer or any person acting in concert with him.

Immediately following Admission, the Peel Group will be interested in 22,443,396 Ordinary Shares carrying 39.1 per cent. of the Company's voting rights and, therefore, any subsequent increase in the Peel Group's interest in Ordinary Shares would be subject to the provisions of Rule 9 of the City Code and the obligation to make a general offer. Under the Peel Relationship Agreement, Peel Holdings (IOM) has undertaken that it will not increase its shareholding in the Company for a period of one year from the date of Admission. See paragraph 12(a) above for further details.

14. Admission, Settlement and CREST

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. On the condition that, inter alia, the Resolutions are passed, it is expected that Admission will become effective, and that dealings in the New Ordinary Shares will commence, at 8.00 a.m. on 17 April 2015.

The Articles permit the Company to issue shares in uncertificated form. CREST is a computerised paperless share transfer and settlement system which allows shares and other securities, including depository interests, to be held in electronic rather than paper form. The Existing Ordinary Shares are already admitted to CREST and therefore the New Ordinary Shares will also be eligible for settlement in CREST. CREST is a voluntary system and Shareholders who wish to retain certificates will be able to do so upon request. The Placing Shares due to uncertificated holders are expected to be delivered in CREST on 17 April 2015.

15. Action to be taken by Shareholders in respect of the General Meeting

Shareholders should check that they have received with the Circular:

- a Form of Proxy for use in respect of the General Meeting; and

- a reply-paid envelope for use in connection with the return of the Form of Proxy (in the UK only).

Whether or not Shareholders propose to attend the General Meeting in person, Shareholders are strongly encouraged to complete, sign and return the Form of Proxy in accordance with the instructions printed on it as soon as possible, but in any event so as to be received by post or, during normal business hours only, by hand, at Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA by no later than 10.30 a.m. on 14 April 2015 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)). Alternatively, Shareholders can submit their proxies electronically at www.sharevote.co.uk by following the instructions on the website. To use the www.sharevote.co.uk website the Shareholder will need the Voting ID, Task ID and Shareholder Reference Number (SRN) shown on the Form of Proxy enclosed. Electronic proxy appointments must be received by 10.30 a.m. on 14 April 2015 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)).

If Shareholders hold shares in the Company in uncertificated form (that is, in CREST) they may vote using the CREST Proxy Voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the Notice of the General Meeting set out at the end of the Circular). Proxies submitted via CREST must be received by the Company's agent (ID RA19) by no later than 10.30 a.m. on 14 April 2015 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)).

This will enable Shareholders' votes to be counted at the General Meeting in the event of their absence. The completion and return of the Form of Proxy or the use of the CREST Proxy Voting service will not prevent Shareholders from attending and voting at the General Meeting, or any adjournment of it, in person should they wish to do so.

16. Recommendation

The Directors believe that the Resolutions to be proposed at the General Meeting are in the best interests of the Company and Shareholders as a whole and unanimously recommend that Shareholders vote in favour of the Resolutions. Accordingly, each of James Stephen Christian, Thomas Eardley Allison and I (who are the Directors who hold interests in Existing Ordinary Shares) have irrevocably undertaken to vote, or to direct that votes are cast, in favour of the Resolutions in respect of 35,500 Existing Ordinary Shares, representing approximately 0.1 per cent. of the issued share capital of the Company as at the date of the Circular.

DEFINITIONS

The following definitions apply throughout the Circular (including the Notice of General Meeting) and the Form of Proxy unless the context requires otherwise:

"Act" the Companies Act 2006

"Admission" admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules

"AIM" the AIM market of the London Stock Exchange

"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange

"Articles" the articles of association of the Company

"Business Day" any day on which banks are generally open in England and Wales for the transaction of business, other than a Saturday, Sunday or public holiday

"Cancellation" the proposed cancellation of the admission of the Ordinary Shares to trading on AIM

"certificated" or "in certificated form" a share or other security not held in uncertificated form (that is, not in CREST)

"City Code" The City Code on Takeovers and Mergers

"Closing Price" the closing middle market quotation of an Ordinary Share as derived from the Daily Official List of the London Stock Exchange

"Company" or "Pinewood" Pinewood Group plc, a company incorporated in England and Wales with registered number 03889552, with its registered office at Pinewood Studios, Pinewood Road, Iver Heath, Buckinghamshire SL0 0NH

"CREST" a relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations)

"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended from time to time

"Directors" or "Board" the directors of the Company, whose names are set out on page 4 of the Circular

"Enlarged Share Capital" the number of Ordinary Shares in issue on completion of the Placing

"Executive Directors" Ivan Patrick Dunleavy, Andrew Mark Smith, Nicholas David James Smith, Christopher John Naisby and James Stephen Christian

"Existing Ordinary Shares" the 49,409,926 Ordinary Shares in issue at the date of the Circular

"Financial Conduct Authority" or "FCA" the Financial Conduct Authority of the United Kingdom acting in its capacity as the competent authority for the purposes of Part VI of the FSMA

"Form of Proxy" the form of proxy for use by Shareholders in connection with the GM

"FSMA" the Financial Services and Markets Act 2000

"General Meeting" or "GM" the general meeting of the Company convened for 10.30 a.m. on 16 April 2015 at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL, or any reconvened meeting following any adjournment of the general meeting, notice of which is set out at the end of the Circular

"Group" the Company and its subsidiaries

"Isle of Man Treasury" The Treasury, a Department of the Isle of Man Government

"Listing Rules" the listing rules and regulations published by the UKLA acting under Part VI of FSMA, as amended from time to time

"Lock-in Agreements" the lock-in agreements between the Company, N+1 Singer and each of Warren James and Peel Holdings (IOM) dated on or around the date of the Circular

"London Stock Exchange" London Stock Exchange plc

"Main Market" the London Stock Exchange's main market for listed securities

"N+1 Singer" Nplus1 Singer Advisory LLP, nominated adviser and broker to the Company and, where the context allows, its affiliates

"Net Proceeds" the proceeds available to the Company from the placing of New Ordinary Shares, net of associated fees and expenses

"New Debt Facilities" the proposed new bank facilities provided by Lloyds Bank plc, The Royal Bank of Scotland plc, HSBC Bank plc and Barclays Bank PLC and comprising £100 million term loan facilities and a £35 million revolving credit facility

"New Ordinary Shares" the 8,000,000 new Ordinary Shares to be issued by the Company pursuant to the Placing

 "Notice of General Meeting" the notice of the General Meeting which is set out at the end of the Circular

"Official List" the list maintained by the UKLA in accordance with section 74(1) of FSMA for the purposes of Part VI of FSMA

"Ordinary Shares" ordinary shares of 10 pence each in the share capital of the Company

"Peel Group" Peel Holdings Group Limited and its subsidiaries (including Peel Holdings (IOM) and Peel Holdings)

"Peel Holdings" Goodweather Investment Management Limited, a subsidiary company of Peel Group

"Peel Holdings (IOM)" Peel Holdings (IOM) Limited, a subsidiary of Peel Group

"Peel Relationship Agreement" the relationship agreement between Peel Holdings (IOM), Peel Holdings Land and Property Group Limited, N+1 Singer and the Company dated on or around the date of the Circular

"Placing" the conditional placing of the Placing Shares at the Placing Price

"Placing Agreements" the conditional agreements between N+1 Singer and each of (1) the Company (in relation to the Placing of the New Ordinary Shares), (2) Peel Holdings and Peel Holdings (IOM) (in relation to the Placing of the Sale Shares being sold by the Peel Group) and (3) the Isle of Man Treasury (in relation to the Placing of the Sale Shares being sold by the Isle of Man Treasury), in relation to the Placing

"Placing Price" 375 pence per Placing Share

"Placing Shares" 8,000,000 New Ordinary Shares and 8,266,667 Sale Shares which have been conditionally placed pursuant to the Placing

"PSDF" Pinewood Studios Development Framework

 "Related Party Transaction" a transaction with a related party in accordance with Rule 13 of the AIM Rules

"Resolutions" the resolutions to be proposed at the General Meeting set out in the Notice of General Meeting

"Sale Shares" 6,239,840 and 2,026,827 Existing Ordinary Shares held by Peel Holdings and the Isle of Man Treasury, respectively, to be placed with institutional or other investors pursuant to the Placing

"Selling Shareholders" Peel Holdings and the Isle of Man Treasury

"Shareholders" holders of Ordinary Shares

"UKLA" the FCA, acting in its capacity as the competent authority for the purposes of Part VI of FSMA

"Warren James" Warren James Holdings Limited

"Warren James Group" Warren James and its affiliates

"Warren James Relationship Agreement" the relationship agreement between Warren James, N+1 Singer and the Company dated on or around the date of the Circular.