UK Oil & Gas Regulatory News (UKOG)

For immediate release

26 March 2013

Sarantel Group plc

("Sarantel" or the "Company")

Placing and corporate update

The Board of Sarantel is pleased to announce that the Company has today conditionally placed 276,825,440 new A ordinary shares (the "Ordinary Shares") at a placing price of 0.1p per Ordinary Share (the "Placing Price") with existing institutional and other shareholders to raise £276,825 before expenses (the "Placing"). The proceeds of the Placing will be used to provide additional working capital for the Company.

Background to the Placing

In the Company's audited results for the year ended 30 September 2012, as announced on 14 January 2013, Sarantel advised shareholders that the Company was in exclusive discussions with a third party (the "Buyer") for the sale of its operating subsidiary, Sarantel Limited. The Company further advised that in the event that the proposed disposal of the operating subsidiary did not proceed as expected, the Company would need to raise additional funds from third parties before the end of March 2013. As announced on 5 February 2013, due to the acceleration of a follow-on order subsequently received from a major customer, the deadline to raise additional funds from third parties extended by a month to the end of April 2013.

Since the AGM on 15 March 2013, the Company has had discussions with certain of its existing institutional and other shareholders who have indicated their strong interest in continuing to support the Company.

The Placing

The Company has therefore today conditionally placed 276,825,440 new Ordinary Shares at a placing price of 0.1p per Ordinary Share with existing institutional and other shareholders to raise £276,825 before expenses. The proceeds of the Placing will be used to provide additional working capital and the Company expects that the deadline to raise additional funds from third parties will now be extended to beyond the end of May 2013. The new Ordinary Shares are the maximum number of Ordinary Shares that the Company is permitted to issue in a placing for cash pursuant to its share authorities approved by Shareholders at the Annual General Meeting held on 15 March 2013.

As set out in the Company's audited results for the year ended 30 September 2012, the Directors believe that it will take a number of years before Sarantel is able to generate sufficient revenues to reach cash break-even from the military market alone. Whilst the Board believes there are attractive prospects in the consumer market for Sarantel's technology, the Group's weak balance sheet and limited financial resources have limited the Group's ability to exploit these opportunities in the past.

In order therefore to enable the Company to invest in the growth of its consumer market sales and provide it with the working capital required, and based on indications of support from existing institutional and other shareholders, the Company intends to raise up to a further £4.75 million by way of a further equity issue at the Placing Price as soon as practicable following the Placing (the "Second Placing"). The Company will need to seek shareholder approval to permit the Second Placing to proceed. The Directors also intend to take the opportunity to provide smaller shareholders with the opportunity to participate by way of an open offer at that time.

Sale Update

The Directors believe that the Placing, and the further support indicated by shareholders for the Second Placing, is in the best interest of shareholders and the Company and the Directors do not therefore currently intend to progress the discussions with the Buyer in respect of the proposed disposal of the operating subsidiary on the basis of the current proposed terms.

Admission, Related Party and Total Voting Rights

The new Ordinary Shares will rank pari passu with the existing Ordinary Shares. Application will be made for the new Ordinary Shares to be admitted to trading on AIM and admission is expected to take place on or around 3 April 2013.

Legal & General, which is currently interested in 19.8 per cent. of the issued Ordinary Share capital of the Company, is subscribing for 54,824,786 Ordinary Shares in the Placing (representing approximately 6.6 per cent. of the issued Ordinary Share capital of the Company). Accordingly, the subscription by Legal & General pursuant to the Placing is a related party transaction for the purposes of Rule 13 of the AIM Rules. The Directors, having consulted with the Company's nominated adviser, consider that the subscription by Legal & General pursuant to the Placing is fair and reasonable insofar as the Shareholders are concerned.

Following the issue, the Company's issued share capital consists of 1,107,301,771 Ordinary Shares, with voting rights. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Service Authority's Disclosure and Transparency Rules.

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About Sarantel  

Sarantel is a leader in the design of high-performance miniature antennas for portable wireless applications. Sarantel's revolutionary ceramic filtering antennas offer dramatically improved performance over existing antenna designs, resulting in a clearer signal, better range and a 90 per cent reduction in the amount of signal radiation absorbed by the body. Because of their smaller size and higher capabilities, Sarantel's antennas enable manufacturers to create innovative wireless products for the GPS, WiMax, Satellite Radio and Satellite phone markets. www.sarantel.com