Issue of Equity, Debt Conversion

21 Oct 2008 07:00



21 October 2008

SPIRITEL PLC

("Spiritel" or "the Company")

ISSUE OF EQUITY

Penta Capital converts £555,000 of loan facilities into new Ordinary Shares at a 58% premium to the current share price

SpiriTel plc, (AIM:STP), the business communications service provider, announces that Penta Capital Partners ("Penta"), its funding partner, has converted £555,000 of its loan facilities into new ordinary shares of 1p each at a price of 1.5p per share. The conversion price of 1.5p per ordinary share represents a premium of 54% based on the closing mid-market price of 0.975p on 20 October 2008.

The terms of the conversion of Penta's debt were set out in the announcement of 25 February 2008 and in the circular to shareholders dated 28 April 2008 and were approved by shareholders at an EGM held on 22 May 2008. As part of the agreement, Penta waived interest charges on its loan facilities saving SpiriTel approximately £800,000 in a full year. The Company sought and received a waiver from the Panel on Takeovers and Mergers of the Rule 9 obligation on Penta to make a general offer for the Company.

Previously, Penta has converted £2.6m of debt into 237,406,046 ordinary shares at 1.1p. The agreement allows Penta to convert its remaining debt at a price that is the higher of 1.5p per share and the most recent placing price, subject to Penta's aggregate holding not exceeding 49.99% of the issued ordinary share capital.

As a result of this conversion, the Company has issued 37,000,000 new ordinary shares of 1p each. Application will be made for the new ordinary shares to be admitted to trading on the AIM Market. The new shares will rank pari passu with the existing ordinary shares in the Company and trading of the new shares on AIM is expected to commence on 27 October 2008.

The total number of shares in issue following this conversion is 627,639,692. Penta's resulting aggregate holding of ordinary shares is 313,819,845, representing 49.99% of the enlarged issued ordinary share capital of the Company. The Company's total indebtedness to Penta now stands at £7.85m, down from £11.46m at the year end on 30 April 2008.

Commenting on the announcement, Alastair Mills, SpiriTel Chief Executive said; "This conversion of loan facilities into equity in SpiriTel at a substantial premium to the share price follows a period of genuine turnaround and progress for the Company. The move is a significant endorsement of our current strategy and future prospects. We are delighted with this vote of confidence from Penta."

For further information please visit www.spiritelplc.com or contact:

Notes to Editors

SpiriTel is a fully integrated business communications group which enables its customers to take advantage of the opportunities created by rapidly changing telecoms markets as the migration to Internet Protocol (IP) based services accelerates. The Group is a consolidator of the highly fragmented UK telecoms reseller market and is building a substantial customer base and scale through selective acquisitions. We are organised into two divisions, SpiriTel Technologies - focused on IP networking and wholesale voice services - and SpiriTel Business, which provides a full range of voice and data services directly to our Business customers.

SpiriTel offers fixed and mobile voice and data communications solutions including Voice over IP (VoIP), data networking, telephone systems and ISP services to a rapidly expanding customer base. We are a leader in the provision of new, but proven, VoIP solutions that are firmly based on the old-fashioned service values which run throughout the Group.