React Group Regulatory News (REAT)

VERDES MANAGEMENT PLC (AIM: VMP)

Convertible Loan of £125,000

Further Update

Further to the announcements of 5 and 28 March 2013, Verdes Management Plc ("Verdes" or the "Company") is pleased to confirm it has received a further sum of £67,500 due under the terms of the agreement governing the £125,000 convertible unsecured interest free loan (the "Loan") details of which were announced on 5 March 2013. Verdes confirms that it has now received all monies due, representing a total of £125,000, under the Loan.

The Loan was made by Westminster Asset Management Limited ("Westminster"), a company registered and incorporated in the British Virgin Islands. As announced on 5 March 2013, the finance has been made available to Verdes in order to facilitate the development of a new business model which is being prepared with a view to providing increased shareholder value. £57,500 was received on 23 April and, as announced on that date, Verdes has been told the delay in Westminster paying the Loan was caused by its need to evidence compliance with anti-money laundering requirements.

Under the share subscription announced on 29 October 2012 ("the Share Subscription") three companies subscribed for 500,000,000 ordinary shares at a price of 1p each in the Company (" the Placees"). The Share Subscription was structured in two tranches: the first tranche would raise £200,000 under existing directors' authorities: and the balance of £300,000 would be conditional on shareholder approval to renew directors' authorities to disapply pre-emption rights. In addition, WH Ireland participated in the Share Subscription and subscribed for 50,000,000 shares of which £11,000 was payable under the first tranche and £39,000 was payable following shareholder approval. Such approval was obtained at the General Meeting held on 16 November. WH Ireland paid its commitment of £50,000 in full. However, a payment of £125,000 only was made by the Placees in default of their commitments under the Share Subscription.

The Company has been advised that any action against the Placees to recover payment under the commitments made under the Share Subscription would be unlikely to succeed because each of the Placees is an overseas company and not believed to have any assets in the jurisdiction of England and Wales.

As a consequence, the Placees are in aggregate interested in 189 million shares representing approximately 28.35 per cent of the Company's issued share ordinary capital of 666,680,735 shares. However, the total number of shares in issue includes 64 million shares which were issued pursuant to one of the subscription agreements entered into under the Share Subscription in respect of which no payment has been received. As noted in the announcement issued on 28 March 2013, the Company has served notice requiring the shareholder to whom these 64 million shares were issued to pay the amount due on them, failing which those shares will be forfeited in accordance with the Company's articles of association and may be re-issued in due course. Adjusting for these 64 million shares, the interest of the Placees would in aggregate amount to approximately 20.74 per cent. of the shares currently in issue.

If the Loan is converted (and the 64 million shares for which no payment has been received are forfeited), Westminster would be entitled to the issue and allotment of 227, 272, 727 new ordinary shares representing approximately 27.38 per cent of the enlarged issued share capital. Conversion is conditional upon (1) the Panel on Takeovers and Mergers granting a waiver of any obligation on Westminster resulting from the conversion to make a mandatory offer under Rule 9 of the City Code on Takeovers and Mergers (the "Code") to acquire the remaining shares in Verdes (a "whitewash") and (2) the approval of independent shareholders being given as part of the whitewash procedure under the Code. Assuming the 64 million shares are forfeited and based on the information currently available to it, the Company does not believe that conversion by itself would trigger the requirement for a mandatory offer under Rule 9 of the Code to be made.

The Company has been advised to serve notice under s793 Companies Act 2006 requiring registered shareholders to give details of any beneficial interests and of any voting arrangements in the shares registered in their names.

The Company also confirms that WH Ireland neither sought nor received any fee or commission in respect of the arrangements described above.

A further announcement will be made regarding the future investing policy of the Company in due course.