RC2.L Regulatory News (RC2)

20 August 2018

Reconstruction Capital II Limited (the "Company")

Interim Unaudited Financial Statements

for the six months ended 30 June 2018

Reconstruction Capital II Limited ("RC2", the "Company" or the "Group"), a closed-end investment company incorporated in the Cayman Islands admitted to trading on the AIM market of the London Stock Exchange, today announces its results for the six months ended 30 June 2018.

Copies of the company's interim financial statements will today be posted to shareholders. The interim report is also available on the Company's website http://www. reconstructioncapital2.com/.

Financial highlights

On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €35.7m or €0.2463 per share, which represents a 1.61% fall since the beginning of the year.

At a general meeting of shareholders held on 21 February 2018 a decision was made to acquire 22% of the issued share capital of Reconstruction Capital Plc (RC) for €1.6m and 10% of the issued share capital of The Romanian Investment Fund Limited (RIF) for €1.7m. Both funds are Romanian-focused and have as their main underlying asset a 60% shareholding in Policolor SA in which RC2 already owns the balance of 40%. RC2 now has a further 15.36% indirect shareholding as a result of these acquisitions. To date, only part of the acquisition has been settled for €1.1m, the balance of €2.1m being due once the vendors have resolved certain technical issues for settlement.

As at 30 June 2018, RC2 had cash and cash equivalents of approximately €4.6m while its wholly-owned subsidiary RC2 Cyprus Ltd had cash and cash equivalents of €2.3m. As at 30 June 2018, RC2 had sundry liabilities of €2.3m, including the €2.1m due for the settlement of the acquisitions of shares in RC and RIF.

Operational highlights

In May, Policolor signed an amendment to the sales contract with the buyers of its main site in Bucharest, bringing forward the sale of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being sold in 2018 has been divided into three plots, with the first plot already having been sold in May generating cash proceeds of €1.4m. A second plot of land was sold in July, generating proceeds of €1.5m, and a further 2.2ha is due to be sold in the autumn, generating cash proceeds of €3m. In May, Policolor also signed the contract for the construction of its new Bucharest plant, which is due to be completed in the spring of 2019 and to become operational in the summer of that year.

Operationally, the Policolor Group had a reasonable first half of the year with sales marginally ahead of the same period last year at €33.3m (cf. 2017 €32.9m), whilst EBITDA fell by 10.6% to €1.95m compared to the same period of the previous year.

The fair value of the investments held under the Private Equity Programme increased by €3.4m to €33.6m during the period, primarily due to the acquisition of the shares in RC and RIF detailed above.

For further information, please contact:

Reconstruction Capital II Limited

Cornelia Oancea / Anca Moraru

Tel: +40 21 316 76 80

Grant Thornton UK LLP

(Nominated Adviser)

Philip SecrettTel: +44 (0) 20 7383 5100

finnCap Limited

(Broker)

William Marle / Giles Rolls

Tel: +44 20 7220 0500

ADVISER'S REPORT

For the six months ended 30 June 2018

On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €35.7m or €0.2463 per share, which represents a 1.61% fall since the beginning of the year.

At a general meeting of shareholders held on 21 February 2018 a decision was made to acquire 22% of the issued share capital of Reconstruction Capital Plc (RC) for €1.6m and 10% of the issued share capital of The Romanian Investment Fund Limited (RIF) for €1.7m. Both funds are Romanian-focused and have as their main underlying asset a 60% shareholding in Policolor SA in which RC2 already owns the balance of 40%. RC2 now has a further 15.36% indirect shareholding as a result of these acquisitions. To date, only part of the acquisition has been settled for €1.1m, the balance of €2.1m being due once the vendors have resolved certain technical issues for settlement.

As at 30 June 2018, RC2 had cash and cash equivalents of approximately €4.6m while its wholly-owned subsidiary RC2 Cyprus Ltd had cash and cash equivalents of €2.3m. As at 30 June 2018, RC2 had sundry liabilities of €2.3m, including the €2.1m due for the settlement of the acquisitions of shares in RC and RIF.

In May, Policolor signed an amendment to the sales contract with the buyers of its main site in Bucharest, bringing forward the sale of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being sold in 2018 has been divided into three plots, with the first plot already having been sold in May generating cash proceeds of €1.4m. A second plot of land was sold in July, generating proceeds of €1.5m, and a further 2.2ha is due to be sold in the autumn, generating cash proceeds of €3m. In May, Policolor also signed the contract for the construction of its new Bucharest plant, which is due to be completed in the spring of 2019 and to become operational in the summer of that year.

Operationally, the Policolor Group had a reasonable first half of the year with sales marginally ahead of the same period last year at €33.3m (cf. 2017 €32.9m), whilst EBITDA fell by 10.6% to €1.95m compared to the same period of the previous year.

The fair value of the investments held under the Private Equity Programme increased by €3.4m to €33.6m during the period, primarily due to the acquisition of the shares in RC and RIF detailed above.

New Europe Capital SRL

STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2018

STATEMENT OF FINANCIAL POSITION

As at 30 June 2018

STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2018

CASH FLOW STATEMENT

For the six months ended 30 June 2018