Placing and Related Party Transaction

AIM: SGM

Sigma Capital Group plc

("Sigma" or "the Group")

Placing and Related Party Transaction

Sigma, the residential and urban regeneration specialist, is pleased to announce that it has completed a placing of 2,278,582 new ordinary shares of 1p each ("the Placing Shares") at a price of 39p per share to raise £0.89 million before expenses ("the Placing") in order to purchase the deferred share in Sigma Inpartnership Ltd, the Group's wholly owned subsidiarywhich undertakes large scale property-related regeneration projects. N+1 Singer acted as broker to the Placing. The deferred share is held by West Coast Capital Trading Ltd ("WCC Trading"), a wholly owned subsidiary of West Coast Capital ("WCC"), from whom Sigma purchased Sigma Inpartnership Ltd (then called Inpartnership Limited) in August 2011. At the same time WCC's right to an annual payment by Sigma of £25,000 in perpetuity will terminate, with effect from Sigma's completion of the purchase of the deferred share. The termination of this right together with the acquisition of the deferred share is defined as "the Purchase of the Rights of WCC". The total consideration due to WCC for the Purchase of the Rights of WCC is £0.84 million in cash.

Under the terms of Sigma's 2011 agreement to purchase Sigma Inpartnership Ltd, the deferred share in Sigma Inpartnership Ltd entitled WCC Trading to a share of future development profits from projects underway at the date of sale once Sigma Inpartnership Ltd achieved a minimum overhead recovery in any one year ("the Development Profit"). Out of the first £10 million of Development Profit generated, Sigma was entitled to receive a minimum of £6.9 million with WCC Trading entitled to a maximum of £3.1 million. Thereafter, WCC was entitled to a 10 per cent. share of any further Development Profit in perpetuity from the projects with which Sigma Inpartnership Ltd was involved at the date of the sale.

During the financial year ended 31 December 2012, the Directors of Sigma assessed the fair value of the deferred consideration arising from the deferred share based on an appraisal of existing projects at the date of acquisition of Inpartnership Limited in August 2011. The value of the deferred consideration was estimated at £0.32 million. The difference between the purchase consideration of £0.84 million and the value of deferred consideration of £0.32 million will be shown as a charge to the Consolidated Comprehensive Income Statement in the financial statements of the Group for the year ending 31 December 2013. The overall effect on the net assets of the Group following the Placing and the Purchase of the Rights of WCC is an increase in net assets of £0.32 million.

The Placing Shares represent approximately 4.7 per cent. of the Group's issued share capital as enlarged by the Placing Shares. The Placing price of 39p per share is at a discount of approximately 1.9 per cent. to the closing middle market price on 20 December 2013, being the last practicable date prior to the publication of this announcement. Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is expected that such Admission will occur at 8:00 am on 2 January 2014. The Placing Shares will, when issued, rank in full for all dividends with a record date on or after the date of Admission and otherwise equally with the existing Ordinary Shares from the date of Admission. Following Admission, the Company will have 48,246,071 Ordinary Shares in issue, none of which will be held in treasury.

The Purchase of the Rights of WCC constitutes a related party transaction under Rule 13 of the AIM Rules and, as such, for the purposes of the AIM Rules, the Independent Directors (being the Sigma Directors other than Jim McMahon), having consulted N+1 Singer Advisory LLP, the Company's nominated adviser, consider that the terms of the Purchase of Rights of WCC are fair and reasonable insofar as Sigma shareholders are concerned.

Graham Barnet, chief executive of Sigma, commented,

"Our share placing has been well supported and in purchasing the deferred share in Sigma Inpartnership, our regeneration subsidiary, we will capture all future development profits from projects for Sigma, leaving us fundamentally better positioned as we continue to grow."

Enquiries

Company website: www.sigmacapital.co.uk