Proposed Acquisition Update

26 October 2011

Insetco plc

("Insetco" or the "Company")

Update regarding the proposed acquisition of the assets of ARM Asset Backed Securities S.A. and Catalyst Investment Group Limited

Further to the Company's announcement on 1 September 2011, Insetco confirms that it is proceeding with the proposed acquisition of the assets of ARM Asset Backed Securities S.A. ("ARM") and Catalyst Investment Group Limited ("CIGL"), subject to certain conditions (collectively the "Acquisitions"). In this respect, the Company notes the announcement made on 25 October 2011 by ARM on the Irish Stock Exchange and the publication of further information to ARM's current bondholders, a full text of which is available via the Irish Stock Exchange's website, www.ise.ie.

The announcement by ARM provides bondholders with an update in respect of ARM's current position in the context of the previous statement made by the Commission de Surveillance du Secteur Financier ("CSSF") on 29 August 2011, which stated that it had decided to not grant a license to ARM as a regulated securitisation undertaking. The announcement by ARM also provides further detail on the acquisition of the assets of ARM by Insetco.

Given this update by ARM, Insetco would like to note the following to its shareholders:

Acquisition Consideration

The assets of ARM comprise the entitlement to cash from maturing senior life settlement policies (the "ARM Portfolio"), which have a face value of approximately $320 million (£196 million) which, together with uninvested cash to be acquired, has a present estimated market value of approximately $81 million (£50 million).

Further to the Company's half-yearly report on 30 September 2011, Insetco confirms that the consideration for the acquisition of the assets of ARM will be met through the issuance of new Insetco 7.5% Perpetual Limited Recourse Bonds (the "Insetco Bonds"), full details of which will be provided to shareholders shortly, together with an issue of new Insetco ordinary shares ("New Ordinary Shares"), representing up to 10 per cent. of the Company's enlarged issued share capital. Subject to the adjustment referred to below, it is intended that the current ARM liabilities of $220m (£135m), arising from a series of bonds issued by ARM with various fixed maturity dates and coupons, will be exchanged in full for the Insetco Bonds. The Insetco Bonds will therefore have an initial maximum nominal value of $220m.

On completion of the proposed acquisition of the assets of ARM, the senior life settlement policies within the ARM Portfolio will be independently valued, and the ultimate number of Insetco Bonds and the total number of New Ordinary Shares issued, will be adjusted to reflect significant deviations to the estimated asset value and to reflect the actual cash balances at completion of the Acquisitions. This adjustment will be applied to the total nominal value of the Insetco Bonds of $220m.

Transaction Process

As previously notified, the completion of the acquisition of the assets of ARM is subject to, among other things, the majority (by value) of the current ARM investors being in favour of the proposed acquisition by Insetco. The correspondence issued by ARM to its bondholders seeks an expression of interest from these investors in respect of the acquisition by Insetco, to be made by 8 November 2011.

The Acquisitions are also subject to the approval of Insetco shareholders, as the transaction is classified as a reverse takeover pursuant to the AIM Rules for Companies. The approval of Insetco shareholders will be sought at a general meeting in due course following the receipt of expressions of interest from the ARM bondholders.

The completion of the acquisition of the ARM portfolio will initially occur through the issue of the Insetco Bonds to ARM. Subsequently, it is expected that an offer will be made to the ARM Bondholders, asking them to accept the Insetco Bonds in substitution for their existing instruments. On acceptance of the Insetco Bonds by these investors, the corresponding liability from ARM to these bondholders will be extinguished.

A further update in respect of the Acquisitions and the possible offer by Insetco to ARM bondholders will be made to shareholders in due course.

Enquiries:

Insetco plc

Clive Cooke (CEO)

Sanjeev Joshi 020 7887 7840

Charles Stanley Securities

Nominated Adviser

Russell Cook / Darren Vickers 020 7149 6000