SGM.L Regulatory News (SGM)

AIM: SGM

Sigma Capital Group plc

("Sigma" or "the Group")

Proposed Placing to raise £8.0 million and Notice of General Meeting

Sigma, the residential and urban regeneration specialist, today announces that it has raised £8.0 million before expenses through an oversubscribed placing of ordinary shares by N+1 Singer (the "Placing").

The Placing will allow Sigma to capitalise on its early mover advantage in the rented residential sector and to successfully execute large scale development opportunities. These opportunities already have support from local and national government to address the need for new homes in the UK's private rented sector. The Directors believe the Placing will also strengthen Sigma's balance sheet and give Sigma's key relationships (UK Government, the GLA, other local authorities and housebuilders etc) confidence in the Company's ability to deliver large-scale housing development opportunities.

The Placing will be effected by the issue of 11,428,571 new ordinary shares of 1p each ("the Placing Shares") conditionally placed with existing and new institutional investors at a price of 70p per Placing Share, a discount of 6.7% to the closing price of 75 pence on 18 March 2014.

The Placing is conditional on shareholder approval.

Graham Barnet, Chief Executive of Sigma said:

""This share placing helps to support Sigma's growth ambitions and I am delighted that it has been so well supported by both existing and new shareholders.

There is an urgent need for new homes in the UK and we believe that Sigma is very well positioned to assist in the delivery of substantial numbers of new homes. We have been working on our innovative funding model to support this over the last three years, aided by our local authority partners in particular. Now we have moved closer to seeing first fulfilment through our Joint Venture with Gatehouse Bank plc. Once bank financing is in place, our proposed initial roll-out of new homes can begin."

A circular containing a Notice of General Meeting of the Group (the "Circular"), convened for 10.00 am on 22 April 2014, has today been sent to Shareholders of the Company outlining the terms of the Placing and seeking Shareholder approval to enable the Directors to allot the New Ordinary Shares in connection with the Placing,

Enquiries

Company website: www.sigmacapital.co.uk

DISCLAIMER

N+1 Singer Advisory LLP, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser and broker to the Company in connection with the matters described in this announcement. Persons receiving this announcement should note that N+1 Singer Advisory LLP will not be responsible to anyone other than the Group for providing the protections afforded to clients of N+1 Singer Advisory LLP or for advising any other person on the arrangements described in this announcement. N+1 Singer Advisory LLP has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by N+1 Singer Advisory LLP for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

The Placing Shares will not be registered under the United States Securities Act of 1933 (as amended) or under the securities laws of any state of the United States or qualify for distribution under any of the relevant securities laws of Canada, Australia or Japan nor has any prospectus in relation to the New Ordinary Shares been lodged with or registered by the Australian Securities and Investments Commission. Accordingly, subject to certain exceptions, the New Ordinary Shares may not be, directly or indirectly, offered, sold, taken up, delivered or transferred in or into the United States, Canada, Australia or Japan. This announcement is directed and issued only to the shareholders of Sigma and their representatives and shall not be distributed to or used by any other person. Overseas shareholders and any person (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward this announcement to a jurisdiction outside the United Kingdom should seek appropriate advice before taking any action.

Proposed Placing to raise £8.0 million and Notice of General Meeting

The Company today announces that it has conditionally raised £8.0 million by way of a placing of 11,428,571 Placing Shares at 70 pence per share.

The Placing is subject to certain conditions, as set out below, including shareholder approval through the passing of the Resolutions at the General Meeting of the Company, to be held on 22 April 2014.

Background to and reasons for the Placing

We have been three years in building the opportunity that lies ahead of us in the roll out of our private rented sector (PRS) model and we believe this model, which adds to our existing regeneration activities, is extendable into the social housing market.

The Placing will allow Sigma to capitalise on its early mover advantage and to successfully execute large

scale development opportunities. These opportunities already have support from local and national government to address the need for new homes in the UK's private rented sector. The Directors believe the Placing will also strengthen Sigma's balance sheet and give Sigma's key relationships (UK Government, the GLA, other local authorities and housebuilders etc) confidence in the Company's ability to deliver large-scale housing development opportunities.

The Board believes that raising equity finance using the flexibility provided by a non pre-emptive placing is the most appropriate and optimal structure for the Company at this time. This allows both existing institutional holders and new institutional investors to participate in the Placing and avoids the need for a prospectus which is a costly and time consuming process.

Details of the Placing

The Company has conditionally raised approximately £7,630,000 (net of expenses) through the issue of the Placing Shares at the Placing Price, which represents a discount of 6.7 per cent. to the closing middle market price of 75p per Ordinary Share on 18 March 2014, being the latest dealing day prior to the publication of the Circular. The Placing Shares will represent 19.15 per cent. of the Company's issued ordinary share capital immediately following Admission.

The Placing Agreement

Pursuant to the terms of the Placing Agreement, N+1 Singer has conditionally agreed to use its reasonable endeavours, as agent for the Company, to place the Placing Shares with certain institutional and other investors. The Placing has not been underwritten by N+1 Singer. The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed at the General Meeting and Admission becoming effective on or before 8.00 a.m. on 23 April 2014 (or such later time and/or date as the Company and N+1 Singer may agree, but in any event by no later than 8.00 a.m. on 30 May 2014).

The Placing Agreement contains warranties from the Company in favour of N+1 Singer in relation to, inter alia, the accuracy of the information in the Circular and other matters relating to the Company and its business. In addition, the Company has agreed to indemnify N+1 Singer in relation to certain liabilities it may incur in respect of the Placing. N+1 Singer has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a material breach of the warranties given to N+1 Singer in the Placing Agreement, the failure of the Company to comply in any material respect with its obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change affecting the condition, or the earnings or business affairs or prospects of the Company as a whole, whether or not arising in the usual course of business.

Settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading

on AIM. It is expected that Admission will become effective on 23 April 2014.

The Placing Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares including the right to receive dividends and other distributions declared following Admission.

Use of proceeds

The Directors intend that the net proceeds of the Placing of £7,630,000 will be used as follows:

· To fund pre-development spend and therefore accelerate the development of existing projects (all pre-development expenditure is recoverable through the funding process when the development proceeds);

· Equity investment in current and future projects to provide Sigma with greater participation in returns and to demonstrate intent to Sigma's partners;

· A stronger balance sheet to give Sigma's key relationships (the UK Government, GLA, Bellway Homes, Countryside etc) the confidence that Sigma has the capability to execute such large-scale public projects; and

· Additional capital and funding to strengthen the Sigma team as and when required.

Related Party Transaction

Henderson Global Investors, a substantial shareholder of the Company (as defined by the AIM Rules) is investing approximately £1,176,000 in the Placing. Henderson Global Investors' participation in the Placing is deemed to be a related party transaction under the AIM Rules.

Having consulted with the Company's nominated adviser, N+1 Singer, the Directors are of the opinion that the terms of Henderson Global Investors' participation in the Placing is fair and reasonable insofar as its Shareholders are concerned.

Resolutions

At the General Meeting the Shareholders will be asked to authorise the allotment of shares in the capital of the Company without the operation or application of the pre-emption provisions contained in the Companies Act 2006, all for the purpose of enabling the Company to place Ordinary Shares in the capital

of the Company pursuant to the Placing.

Recommendation and voting intentions

The Directors consider that the passing of the Resolutions is in the best interests of the Shareholders as a whole. Accordingly, the Directors recommend Shareholders to vote in favour of the Resolutions, as they intend to do in respect of their own interests amounting to 10,457,868 Ordinary Shares (representing approximately 21.7 per cent., in aggregate, of the Ordinary Shares in issue as at the date of the Circular).

PLACING STATISTICS

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

DEFINITIONS

The following definitions apply throughout the Circular and this announcement unless the context otherwise requires: