Proposed cancellation of share premium account

PURE WAFER PLC

(AIM: PUR)

Cancellation of Share Premium Account and General Meeting

Pure Wafer plc ("Pure Wafer" or "the Company"), a provider of high quality silicon wafer reclaim services for many of the world's leading semiconductor manufacturers as an integral part of their cost control programmes, announces that it has convened a General Meeting for the purpose of approving a proposal to eliminate the Company's share premium account to enable the payment of dividends.

On 25th April 2013, the board of directors of Pure Wafer International Limited ("PWIL") concluded that it was entitled to treat a reserve of £9,030,000, which formed part of its capital and reserves, as a distributable reserve. Pursuant to a court order relating to a reduction of PWIL's capital and share premium account in 2007, this reserve was to be treated as a non-distributable reserve until all creditors of PWIL at that time had been discharged in full. With the refinancing of group debt in January 2013, this condition was satisfied and the reserve can now be treated as a distributable reserve.

In addition, on 25th April 2013, the board of directors of PWIL approved a reduction of share capital and cancellation of the share premium account of PWIL.

These matters have resulted in PWIL having positive distributable reserves available for distribution to the Company by way of dividend of $32,202,000 (on the basis of PWIL's latest reported balance sheet position as at 30th June 2012). Subject to the results of PWIL for the full financial year ending 30th June 2013, the board of PWIL has expressed an intention to declare a dividend in favour of the Company of some or all of its distributable reserves at that time.

Your Board has decided that, in addition to the above, it is in the best interests of Shareholders to cancel the Company's existing share premium account (being $24,857,075 as at 30th June 2012) in order to eliminate the deficit on the Company's profit and loss account (being $8,049,000 as at 30th June 2012) and to create distributable reserves of approximately $16,808,000 (in addition to those which might be created by the declaration of any dividend in favour of the Company by PWIL) which will then be available for distribution to shareholders by way of dividend in the future (subject to future profits made or losses incurred by the Company).

The Company's Share Premium Account is $27,457,096 as at 31st March 2013 the latest practicable date prior to the posting of the Notice of meeting). The Company is proposing, subject to the passing of the Resolution at the General Meeting and the subsequent confirmation of the Court, to cancel this Share Premium Account and to use the proceeds to eliminate the deficit on the Company's profit and loss account and to create a distributable reserve of the Company which will enable the Company to make distributions in the future should it be considered appropriate to do so.

The existing creditor of the Company, being HSBC Bank plc, has confirmed its consent in principle to the Proposal and it is anticipated that, on this basis, the Court will be satisfied that the interests of creditors have been sufficiently protected such that the entire amount standing to the credit of the Share Premium Account can be credited to a distributable reserve of the Company. If the Court is not so satisfied, it may require that part of such amount be treated as a non-distributable reserve pending discharge in full of those creditors.

It is anticipated that the Court Order confirming the cancellation of the Share Premium Account will be made on or about 27th June 2013. The cancellation of the Share Premium Account will only take effect when an office copy of the Court order is duly registered by the Registrar of Companies which is expected to take place on 28th June 2013. However, if required by the Court, the Company will not distribute any reserves created by the cancellation of the Share Premium Account up to the amount of the Company's creditors as at the Effective Date until all such creditors have been paid or suitable alternative arrangements for their protection have been agreed with the Court.

It is emphasised that any declaration or recommendation of a dividend in the future will be subject to the Company having sufficient distributable reserves and the board being satisfied that, having regard to all the circumstances, it is in the best interests of the Company to do so and it is appropriate to do so having taken into account the Company's investment plans, cashflow projections and compliance with funding arrangements.

The General Meeting has been convened for 10.00 on 23rd May 2013.