Open Offer & Capital Reorganisation

Environmental Recycling Technologies plc

Conditional Open Offer for new Ordinary Shares

Notice of General Meeting

Proposed Consolidation and Sub-division of Share Capital

Proposed adoption of new Articles of Association

Environmental Recycling Technologies ("ERT" or "the Company") (AIM: ENRT), which has developed and commercialised the patented rights to the Powder Impression Moulding ("PIM") process, which converts mixed waste plastics into commercial end products, is pleased to confirm that it has today issued a shareholder circular ("Circular") detailing a proposed consolidation and sub-division of the Company's share capital ("the Capital Reorganisation") to create new ordinary shares of 0.25 pence each ("New Ordinary Shares") and outlining its intention, subject to implementation of the Capital Reorganisation, to raise up to a maximum of £1,034,330 (before expenses) by way of an open offer ("Open Offer") to eligible shareholders of up to 82,746,456 new Ordinary Shares ("Open Offer Shares").

The Capital Reorganisation is subject to the approval of shareholders at a General Meeting to be held at 11.00 a.m. on Tuesday 30 April 2013, at Witney Four Pillars Hotel, Ducklington Lane, Witney, Oxfordshire, OX28 4EX ("GM")`. In order to allow the Capital Reorganisation to take place, it will be necessary to include amendments to the Company's Articles of Association and shareholders are therefore being asked to approve the adoption of new Articles, which will also bring the Company into line with the 2006 Companies Act.

Assuming that the necessary resolutions set out in the Notice of GM ("Resolutions") are passed at the GM, the Open Offer will become unconditional and will become effective on 1 May 2013. The directors are mindful of the suggestions made by shareholders to date that shareholders should be given due opportunity to participate in any new fundraising by the Company.

The proceeds of the Open Offer will provide additional working capital and finance to accelerate the roll-out of ERT's licences to use the PIM Process on a global basis; to research additional complementary technologies; and to invest in further sales and marketing.

Principal terms and conditions of the Open Offer

The Open Offer is being made to shareholders resident in the United Kingdom and who appear on ERT's share register as at 28 March 2013 ("Eligible Shareholders") (the "Record Date") on the basis of 2 new Open Offer Shares for every 19 New Ordinary Shares created by the Capital Reorganisation held on the Record Date (on a post Capital Reorganisation basis). In addition to their pro rata entitlements to apply for Open Offer Shares under the Open Offer, Eligible Shareholders who elect to apply for their pro rata basic entitlement may also apply for new Open Offer Shares in excess of their basic entitlement in the event that not all of the Open Offer Shares are applied for. To the extent that applications are received in respect of an aggregate of more than 82,746,456 Open Offer Shares, excess applications will be scaled back accordingly. However, excess applications will be rejected if and to the extent that acceptance would result in the Eligible Shareholders, together with those acting in concert with them for the purposes of the City Code , holding 29.9 per cent. or more of the issued share capital of the Company immediately following Admission.

Entitlements to apply to acquire Open Offer Shares will be rounded down to the nearest whole number and any fractional entitlement to Open Offer Shares will be disregarded in calculating an Eligible Shareholders' basic entitlement to subscribe for Open Offer Shares.

The price per Open Offer Share is 1.25 pence which represents a discount of approximately 16.7 per cent to the closing mid market price of 1.50 pence per existing Ordinary Share on 28 March 2013, the latest practicable date before posting the Circular to shareholders.

The Company is proposing to raise a maximum of £1,034,330 under the Open Offer and as a consequence a full take-up under the Open Offer would result in the issue of an additional 82,746,456 New Ordinary Shares in the Company, representing approximately 10 per cent. of the enlarged issued share capital on admission of the New Ordinary Shares and the Open Offer Shares to trading on AIM.

The Open Offer is subject to the satisfaction, amongst other matters, of the following conditions on or before 8.00 a.m. on 1 May 2013 (or such later date as the Company and WH Ireland may decide, being not later than 8.00 a.m. on 8 May 2013,):

·; implementation of the Capital Reorganisation;

·; an Open Offer Agreement between the Company and WH Ireland dated 25 March 2013, not being terminated prior to admission of both the New Ordinary Shares and the Open Offer Shares to trading on AIM ("Admission"); and

·; Admission of both the New Ordinary Shares and the Open Offer Shares.

The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Company's existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.

Eligible Shareholders should note that the Open Offer is not a rights issue. Eligible non-CREST Shareholders should be aware that the Application Form accompanying the Circular is not a negotiable document and cannot be traded. Eligible Shareholders should also be aware that, pursuant to the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Eligible Shareholders who do not apply under the Open Offer.

As the market value of the Company's shares on 28 March 2013 was below the current nominal value of 2.5 pence per share and because English company law prevents companies from issuing new shares at a price below their nominal value, the Open Offer is conditional on the Capital Reorganisation first taking place in order to reduce the nominal value of the shares to 0.25 pence. It is also proposed to reduce the number of shareholders owning an uneconomic number of shares where the costs of trading the holding might reasonably be expected to be more than the value of the investment.

Accordingly, subject to the passing of the Resolutions, the Company proposes to consolidate every 400 issued and to be issued existing Ordinary Shares into 1 new ordinary share of £10 each ("Consolidation Share") and then for each Consolidation Share to be subdivided into 400 new ordinary shares of 2.5 pence each ("Interim Ordinary Shares"). Each Interim Ordinary Share will then be subdivided again to create 1 New Ordinary Share of 0.25 pence and 1 deferred share of 2.25 pence ("Deferred Shares"). The rights attaching to the New Ordinary Shares will, apart from the change in nominal value, be identical in all respects to those of the Company's existing Ordinary Shares. The rights and restrictions relating to the Deferred Shares are set out in the Notice of GM contained in the Circular. The record date for the proposed Capital Reorganisation is 30 April 2013.

The Directors intend to subscribe in full under the Open Offer for their basic entitlement as set out in the table below. In the event that the Open Offer is not taken up in full, the Directors intend to apply for additional Open Offer Shares under their excess entitlement.:

Shares

*Assuming no outstanding warrants or options are exercised and full subscription under the Open Offer

** Assuming that the Open Offer is taken up in full and that the Directors subscribe in full under the Open Offer for their basic entitlements, but do not take up any excess entitlements

The directors' participation in the Open Offer is classified as a related party transaction under the AIM Rules. Accordingly, as all directors are proposing to invest in the Open Offer, WH Ireland has confirmed its opinion that the participation in the Open Offer by the directors is fair and reasonable insofar as the Company's shareholders are concerned.

Overseas Shareholders

The Open Offer is only being made to Shareholders resident in the United Kingdom. Further information on the terms and conditions of the Open Offer can be found at Part IV of the Circular.

Settlement and dealings

The Open Offer will close at 11.00 a.m. on 29 April 2013. Assuming that the Resolutions are passed at the GM, application will be made for the New Ordinary shares and the Open Offer Shares (but not, for the avoidance of doubt, the Deferred Shares) to be admitted to trading on AIM and it is expected that admission will become effective and dealings in both the New Ordinary Shares and the Open Offer Shares will commence on 1 May 2013. Further information in respect of settlement and dealings in the Open Offer Shares and the New Ordinary Shares is set out in paragraph 8 of Part IV of the Circular.

Enquiries:

Notes to editors:

Environmental Recycling Technologies plc (ERT) is a leading developer of innovative technologies specifically focusing on plastic waste recycling. The company holds the worldwide intellectual property rights to the Powder Impression Moulding (PIM) process.

For more information about Environmental Recycling Technologies plc please visit www.ertplc.com