Convertible loan notes and capital reorganisation

DCD Media plc

("DCD Media" or "the Company")

Issue of New Convertible Loan Notes and Proposed Capital Re-organisation

DCD Media Plc today announces that it has secured additional funding of £0.93 million (before costs) through the issue of a new tranche of convertible loan notes ("Convertible Loan Notes") to the Company's largest shareholders. In addition, David Green intends to subscribe for £0.07 million of Convertible Loan Notes. Conversion of the Convertible Loan Notes is dependent on approval of resolutions that are being put to shareholders at the Company's Annual General Meeting ("AGM") on 28 June 2013.

Key Terms of the Convertible Loan Notes

The Convertible Loan Notes shall, subject to a prior conversion by the noteholders, be repayable on 30 May 2015 (the "Maturity Date"). The noteholders may, however, determine at any point prior to the Maturity Date to convert all, or part of, the outstanding principal sum (together with accrued but unpaid interest) into ordinary shares in the capital of the Company. The principal and accrued interest shall convert into ordinary shares at a price of 0.5p (subject to adjustment for, inter alia, any subsequent capital re-organisation by the Company).

The Convertible Loan Notes will earn interest at 10% per annum, however, if the resolutions required to allow conversion of the notes are not approved at the AGM (including the capital re-organisation resolution referred to below), the rate will increase to 20% per annum from date of issue. The Convertible Loan Notes are unsecured and subordinate to the Company's existing debt with Coutts & Co bank.

The following shareholders have subscribed for the undernoted amounts of Convertible Loan Notes:

In addition, David Green intends to subscribe for the undernoted amount of Convertible Loan Notes once the close period in relation to the publication of the Company's results for the year ended 31 December 2012 has ended.

Proposed Capital Re-organisation

Share Sub-Division

In order to facilitate conversion, one of the resolutions to be considered by shareholders of the Company at the forthcoming AGM shall be a resolution to approve, inter alia, a share sub-division of each existing 1p ordinary share into one new ordinary share of 0.5p and a new deferred share of 0.5p (the "Sub-Division"). Save for their nominal value, the 0.5p ordinary shares will be identical to the existing ordinary shares and the 0.5p deferred shares will be identical to the existing deferred shares. Immediately following the Sub-Division, each shareholder will hold the same number of 0.5p ordinary shares as the number of existing ordinary shares which he held immediately before the Sub-Division.

No share certificates will be issued in respect of either the 0.5p Ordinary Shares or the New Deferred Shares and neither of these classes of shares will be admitted to AIM nor to trading on any other stock or investment exchange.

Share Consolidation

Immediately following the proposed share Sub-Division, the Directors also propose to undertake a share consolidation to reduce the large number of very small shareholdings on the register. The share consolidation shall be considered by shareholders as part of the same resolution in which the sub-division referred to above shall be considered.

The share consolidation would mean that every 1,000 ordinary shares 0.5p each would be consolidated into one consolidated new ordinary share of £5.00 each ("New Ordinary Shares") (the "Consolidation").

As all existing ordinary shareholdings in the Company are proposed to be consolidated, the proportion of the issued ordinary share capital of the Company held by each Shareholder immediately before and after the Consolidation will, save for minor adjustments as a result of the fractional entitlement provisions set out below, remain unchanged.

Any fractions arising as a result of the Consolidation will be aggregated and the Directors will, in accordance with the Articles, sell the aggregated shares for the benefit of the relevant shareholders.

The proceeds from the sale of the fractional entitlements shall be distributed pro rata amongst the relevant shareholders save that where a shareholder is entitled to an amount which is less than £5 it will (in accordance with the Articles) not be distributed to such shareholder but will be retained by the Company for its benefit.

If the proposed capital reorganisation is approved by shareholders, then following the Sub-Division and Consolidation, the adjusted conversion price for the Convertible Loan Notes shall be £5.00.

Further detail on the Convertible Loan Notes, the capital re-organisation and the resolutions that are being put to shareholders at the AGM will be provided in the notice of AGM to be sent to shareholders on 6 June 2013. The proposed timetable for the capital re-organisation is as follows:

·; General Meeting: 28 June 2013

·; Record date for Sub-Division and Consolidation: 6 p.m. on 28 June 2013

·; Admission of New Ordinary Shares to trading on AIM: 8 a.m. on 1 July 2013

Related party transaction

The subscriptions for Convertible Loan Notes by Timeweave, Henderson and David Green constitute related party transactions for the purposes of Rule 13 of the AIM Rules ("Related Party Transactions"). There are no independent directors for the purposes of providing the fair and reasonable statement required under Rule 13. finnCap Limited, the Company's Nominated Adviser, considers that the terms of the Related Party Transactions are fair and reasonable insofar as the shareholders of the Company are concerned. 

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