Capital Restructure and Name Change

News release

8 July 2010

Midas Capital plc

Midas proposes capital restructure and company name change to MAM Funds plc

Midas Capital plc, the AIM quoted fund management company (the "Company"), is seeking shareholder approval at a General Meeting to be held on 28 July 2010, to create additional distributable reserves through the cancellation of its share premium account and capital redemption reserve and all of the deferred shares in issue (the "Reduction of Capital"). Shareholder approval is also being sought to the making of some minor changes to the Articles of Association of the Company (the "Articles") and to change the name of the Company to MAM Funds plc. These proposals are contained in a circular being posted today to shareholders, copies of which are available on the Company's website (www.midascapitalplc.com) and from its registered office. 

The Company has recently divested its wealth management business releasing cash of approximately £6.4m (net of expenses and allowable deductions) and is bound by its Articles and its bank facilities to apply the net proceeds of the sale (the "Sale Proceeds") to redeeming a portion of its Preference Shares in issue, to the extent that it has the requisite distributable reserves to do so. Currently, the Company has insufficient distributable reserves to enable it to apply the Sale Proceeds in full in this way. It is therefore proposed that further distributable reserves are created by the Reduction of Capital. The new distributable reserves so created would be available for the directors of the Company to use to redeem preference shares of £1 each in the capital of the Company. 

In addition to the passing of a special resolution to approve the Reduction of Capital, sanction of the Court is also required. Before giving such approval, the Court will require that creditors at the time of the Reduction of Capital are protected adequately. The Company is therefore likely to be required to put into escrow an amount of cash in respect of such creditors, at the date of Court sanction, who may not consent to the Reduction of Capital (estimated at £1m).

The effect of the Reduction of Capital will be to add a total of £27,016,487 to the distributable reserves of the Company. Subject to shareholder approval and the approval of the Court being forthcoming, after setting aside funds of approximately £1m required to protect creditors, the remaining £5.4m of Sale Proceeds will then be applied to redeem Preference Shares, leaving approximately £7.4m still outstanding.

The Board is proposing that minor amendments are made to the Articles in order to allow the Company and the holder of the majority in nominal value of the of Preference Shares to agree on the number of Preference Shares that are required to be redeemed upon the occurrence of relevant trigger events, and the timescale in which this will be achieved. The Board is also seeking shareholder approval to rename the Company MAM Funds plc, as the current name is seen to be too closely linked to one subsidiary of the Midas group.

Colin Rutherford, executive chairman, Midas Capital plc, says:

"The proposed resolutions, which the Directors are unanimously recommending, will create distributable reserves, allowing the Company to retire the residual Preference Shares.

"The change of name will improve our ability to market products and services offered by the Company and address some confusion in the market. We are one of the leading multi asset investment managers in the UK, with top decile performance by our Miton Special Situations and Strategic funds over 3 years and the return to form of our principal Midas funds' in 2009."

For further information please contact:

Colin Rutherford, executive chairman, Midas Capital 07768 053 054

James Steel, Director, Arbuthnot Securities 020 7012 2000

Roland Cross/ Zoe Butt / Fiona Kehily, Broadgate Mainland 020 7726 6111

Notes

This announcement does not contain all the information which will be contained in the Circular and does not contain sufficient information for Shareholders to make an informed election under the Proposals.