SWAP.L Regulatory News (SWAP)

1 July 2016

MoneySwap plc

("MoneySwap" or the "Company")

Fundraising update, proposed board changes, and extension to short-term loan

The Company announces that it is progressing a fundraising to raise approximately US$5.4 million through an issue of new ordinary shares in the Company of 0.1p nominal value each (the "Ordinary Shares") and that it has agreed, subject to contract and due diligence, outline terms with a new investor.

Proposed subscription

The Company has reached preliminary agreement, subject to contract, with the Hunan Commodities Trading Centre Company Limited ("HNCX") under which it is proposed that HNCX will subscribe for approximately US$5.4 million of new Ordinary Shares in the Company (the "Proposed Subscription").

Under the Proposed Subscription it is intended that HNCX will subscribe for a total of 2,724,970,131 new Ordinary Shares at a price of US$0.0019817 per new Ordinary Share (the "Subscription Price"). It is currently planned that the Proposed Subscription will comprise:

a) a proposed initial subscription by HNCX for 842,721,933 new Ordinary Shares at the Subscription Price, which would result in the Company receiving approximately US$1.67 million at completion; and

b) HNCX committing irrevocably to subscribe for a further 1,882,248,198 new Ordinary Shares at the Subscription Price in 6 tranches over the 9 months following completion. These subsequent subscriptions would result in the Company receiving approximately US$3.73 million from HNCX.

If completed, the Proposed Subscription would result in the Company issuing 2,724,970,131 new Ordinary Shares and raising approximately US$5.4 million, before expenses.

HNCX is a privately owned company based in Hunan province in the People's Republic of China. It is controlled by two families with various business interests including in the property and textiles sectors. If the Proposed Subscription proceeds, it is intended that HNCX and the Company will agree the terms of a relationship agreement reflecting the substantial nature of HNCX's equity interest in MoneySwap and a 12 month lock-in agreement in respect of all new Ordinary Shares subscribed for by HNCX.

Should the Proposed Subscription be completed, HNCX will own shares representing approximately 61% of the Company's issued share capital (as enlarged by the Proposed Subscription and the issue of new Ordinary Shares by the Company to certain creditors, directors, a former director and a substantial shareholder, details of which are set out below).

Proposed agreements with certain creditors of the Company

In addition to the Proposed Subscription, the Company is currently undertaking equity for debt discussions with certain creditors of the Company. Any equity for debt swaps will be conditional on the Proposed Subscription proceeding.

Leading Empire Group Limited ("LEG") has agreed, conditional on the Proposed Subscription completing, to convert US$0.171 million of the US$0.24 million of principal and accrued interest on its convertible loan notes in the Company (the "LEG CLNs") into new Ordinary Shares at the Subscription Price.

Advance Development Corporation ("ADC") has agreed, conditional on the Proposed Subscription completing, to convert US$0.529 million of the total of US$0.744 million principal and accrued interest on its convertible loan notes in the Company (the "ADC CLNs") into new Ordinary Shares at the Subscription Price.

The remaining balances of the LEG CLNs and the ADC CLNs will continue to exist as convertible loan notes in the Company on the following terms:

i) interest will accrue on the remaining balance of the LEG CLNs and the ADC CLNs, respectively, at 10% per annum, payable annually in arrears;

ii) unless converted, the LEG CLNs and the ADC CLNs, respectively, will be redeemed in full on 30 June 2018 ; and

iii) from 30 June 2017, MoneySwap will have the option to either redeem or to force conversion of the LEG CLNs and/or the ADC CLNs at any such time. In the event of MoneySwap electing to redeem or force conversion of the LEG CLNs and/or the ADC CLNs, the conversion price will be at a 10% discount to average closing mid-market price of the Ordinary Shares for the ten business days immediately prior to such conversion.

In addition, Mr Alan Lau has agreed, conditional on the Proposed Subscription completing, to reschedule the redemption dates of the principal and accrued interest on the US$1.05 million due to him from the Company in a manner consistent with the projected cash flows of the Company going forward.

Proposed board changes

Should the Proposed Subscription complete, three of the existing directors of the Company (being Sunny Yu, Emma Xu and Javier Amo) intend to resign from the Board and three new directors will be appointed, including a new CEO.

HNCX have made it a condition of their participation in the Proposed Subscription that all unpaid fees due to the current directors, a former director and a substantial shareholder of the Company, which total US$0.38 million, will be settled by the Company issuing new Ordinary Shares to the directors, the former director and the substantial shareholder at the Subscription Price (the "Fee Conversion Shares"). It is envisaged that the directors and former director will agree to cancel all existing and unexpired options over ordinary shares in the Company.

Any arrangements with the current directors, the former director and the substantial shareholder will be deemed related party transactions under the AIM Rules for Companies. It is envisaged that any Fee Conversion Shares issued to the directors and the former directors will subject to a twelve-month lock-in period.

Next steps

The Proposed Subscription and the arrangements with creditors, directors, the former director and the substantial shareholder set out above are subject, inter alia, to:

a) the execution of a subscription agreement between the Company and HNCX and completion of associated documentation;

b) approval of the Proposed Subscription and the other arrangements by the board of the Company; and

c) completion of certain due diligence and anti-money laundering checks by the Company and its advisers.

In the event that the Proposed Subscription does not proceed the board of MoneySwap believe that it is unlikely that the Company would be able to continue to trade.

Extension to Short-term Loan

MoneySwap has received a further US$18,000 under an extension to the loan facility (the "Short-term Loan") from Changsha Zhangdian Investment Company Limited (the "Lender"), further details of which were announced by the Company on 9 May 2016 and 16 June 2016. The Company has now drawn down US$218,000 from the Lender, comprising the full US$200,000 available under the Short-term Loan and the US$18,000 pursuant to the Short-term Loan's extension.

The monies received from the Lender are being applied by MoneySwap principally in meeting the various legal and regulatory costs associated with the Proposed Subscription.

- Ends- 

For further information, please contact:

About MoneySwap (www.moneyswap.com)

MoneySwap provides payment solutions and gateways to merchants, which allow both online and point of sale transactions to be settled using UnionPay cards in the UK. In addition, UnionPay has licensed MoneySwap for its MoneyExpress service, which enables overseas persons to send funds directly to UnionPay cardholders in China. The Company also offers an online peer-to-peer platform for currency exchange and payments. The Company's shares are traded on the London Stock Exchange's AIM market (AIM: SWAP). More information can be found at www.moneyswap.com.