Westminster Group Regulatory News (WSG)

22 April 2015

Westminster Group Plc:

Issue of Convertible Loan Notes raising £2.319m

Westminster Group Plc ('Westminster', the 'Company' or the 'Group'), the AIM listed supplier of managed services and technology based security solutions to governments and government agencies, non-governmental organisations (NGO's) and blue chip commercial organisations worldwide, is pleased to announce that it yesterday signed agreements for the issue of convertible loan notes to raise £2.319m before costs by way of two separate instruments as detailed below.

The proceeds are for general balance sheet strength and will support ongoing costs and business development, particularly around the expansion of the Managed Services division.

The flexible structure of this financing allows the Group (subject to any CULN conversion rights with agreed limitations defined and summarised below) to make repayments, for example, from organic cash flows from larger contracts, both potential new and existing such as the US$4.4m America's contract which we anticipate will be concluded in 2015 with first cash receipts now anticipated to commence in Q2 2015.

Variation of 2016 Convertible Secured Loan Note ("CSLN") and issue of further loan notes

On 19 June 2013, the Company issued a CSLN enabling the drawdown of a maximum of £4m, with a three year duration, a 10% annual coupon and a conversion price of 35 pence. As at that date, £1.318m of the CSLN had been drawn down. Subsequently £0.742m of this was converted into ordinary shares in the Company leaving £0.576m outstanding immediately prior to this announcement. The terms of this have been varied (as consented to by all existing loan note holders) so as to attract incoming investors, the key terms of which are set out below:

· Maturity date extended by 2 years to June 2018

· The conversion price (for issues after 30 April 2015) can be greater than 35p

Westminster may repay the CSLN without penalty after the first year from the date of this announcement provided that the average share price for the 15 days prior to repayment is 42 pence or more. Westminster may force conversion of the CSLN if the average share price on the 15 days before conversion is 65 pence or more. The CSLN holders may convert at any time during the term of the instrument at the holder's option. All other terms of the CSLN remain the same. These loan notes have a current capacity to issue a further £2,013,000 and are listed on the Channel Islands Stock Exchange.

In addition, on 21 April 2015, new investors including institutional holders have subscribed for a further £0.67m of the CSLN.

Westminster values all of its investors and has previously announced that it has been seeking ways to include all shareholders in a cost effective way in funding issues for debt and equity. Whilst it has not been possible, or practicable, to do so on this occasion, Westminster continues to review options to include the wider investor base should further funding be required and it be practicable and permissible to do so.

Zero Coupon Convertible Unsecured Loan Notes ("CULN")

The Company today has issued a further £1,650,000 (gross) CULN with Darwin Strategic Limited ("Darwin"). The CULN is unsecured, has a zero coupon attached and will be divided into 66 individual notes with a par value of £25,000 each ("Par Value").

For each £25,000 loan note issued, Westminster will receive 90% of the Par Value, equivalent to £22,500 per individual loan note. During the first 12 months, any number of the loan notes are callable in cash by Westminster at 100% of Par Value (subject to the right of a loan note holder to convert with agreed limitations as below). Following the 1 year anniversary, any number of loan notes are callable at 102.5% of Par Value, equivalent to £25,625 per individual loan note. From 1 May 2016, Westminster is required to prepay 3 loan notes every month at 105% of Par Value, equivalent to £78,750 and these monthly repayments will mean no further equity issue from this instrument.

The loan notes are convertible at Darwin's election into new ordinary shares of 10p each in Westminster ("Ordinary Shares") at the conversion price, being the lesser of 39 pence per new Ordinary Share or 90% of the arithmetic average of the five lowest daily volume weighted average share price per Ordinary Share out of the ten trading days prior to conversion. The parties have also agreed to certain limitations on conversion volumes throughout the duration of the loan notes. In addition to the other redemption rights the loan notes are redeemable in the event of a change of control or the occurrence of an event of default in cash at 110% of the Par Value.

Darwin has also been issued with warrants (vested immediately) to subscribe for 1,100,000 new Ordinary Shares at an exercise price of 39 pence per new Ordinary Share. The warrants can be exercised over a two year period from the date of this announcement.

Westminster and Darwin have mutually agreed to the early expiration of the previous Equity Finance Facility.

Notice of Results

The Group intends to publish its audited preliminary results for the year ended 31 December 2014 on 21 May 2015.

Commenting, Peter Fowler, Chief Executive Officer, said:

"We are mindful both of the cash needs of the business, as we continue to pursue growth opportunities, and the effects of dilution, and we believe that the financing announced today not only provides a stronger balance sheet for business development but also limits the potential dilution to existing shareholders."

For further information please contact:

Notes:

Westminster Group plc is a leader in the supply of system solutions and products to the security, defence, fire protection and safety markets worldwide.

Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, encompassing a wide range of surveillance, detection, tracking and interception technologies and the provision of long term managed services contracts such as the management and running of complete security services and solutions in airports, ports and other such facilities together with the provision of ferry services, manpower, consultancy and training services. The majority of its customer base, by value, comprises governments and government agencies, non-governmental organisations (NGO's) and blue chip commercial organisations. For further information please visit www.wsg-corporate.com