UPDATE ON BANKING ARRANGEMENT

10 Jan 2006 07:00

Sanctuary Group PLC10 January 2006 10 January 2006 The Sanctuary Group plc (the "Company") UPDATE ON BANKING ARRANGEMENTS Banking Arrangements On 5 December 2005 the Company, responding to press speculation, stated thatwhilst the Board is confident that the actions taken to cut costs and focus onthe core activities of the Company will allow the Company to continue to tradeover the medium term, the Company will remain dependent on the support of itsbankers in the near term and is likely to require further funding in the nearterm. To ensure sufficient funding to continue to meet some of the exceptional costsassociated with the Company's restructuring and for working capital purposes, ithas agreed with its principal bankers to increase its facilities to £134.125m.In addition, as previously announced, the Company has a further £5.25m ofcurrent bank facilities. The Company has amended the appropriate terms of itsoutstanding £30m Convertible Loan Notes to take account of these changes. Thekey amendments to the terms are set out in a separate press release dated 10January 2006. The Board continues to enjoy the support of its bankers. Possible Fund Raising The Board recognises that the level of debt in the Group is too high and isactively exploring a number of options for the medium and long term financing ofthe Group. As outlined on 5 December, one of these options is a significantequity fund raising through Evolution Securities, the proceeds of which would beused to reduce debt levels. The details of any such equity issue are still beingconsidered and an announcement will be made if and as appropriate. Ends For further information please contact: The Sanctuary Group plc Philip Ranger, Director, Corporate & Investor Relations 07768 534641 020 7300 1323 Merlin Paul Downes/Rebecca Penney 020 7653 6620 This information is provided by RNS The company news service from the London Stock Exchange