Sale of Chinese Subsidiary

27 January 2016

BRITISH POLYTHENE INDUSTRIES PLC

SALE OF CHINESE SUBSIDIARY

British Polythene Industries PLC (BPI) today announces that it has signed an agreement to sell its PRC subsidiary BPI China (formerly Xinhui Alida) to Amcor (China) Investment Co., Ltd, a subsidiary of Amcor, the Australian based packaging group (the Disposal). The Disposal is subject to the approval of the PRC authorities and is expected to complete in the second quarter of 2016.

The consideration, payable in US dollars, including an amount for working capital, is estimated to be approximately £9.4 million with an estimated £6.4 million upon completion. The balance will be payable in cash in instalments, following the agreement of working capital and satisfaction of certain post completion arrangements, all of which are expected to take place within the next 12 months. The proceeds will be used to reduce borrowings.

BPI's PRC subsidiary was established in 1993 to produce low cost carrier bags for the UK retail market. After selling the retail carrier bag business in 2002, BPI China diversified into other products for the UK market. Latterly the Group invested in high quality printing and conversion equipment to supply the Australasian market but progress has been slower than expected, despite an excellent record with product quality and service.

Total sales of the business, including sales to BPI in the UK of £5.5 million, were £9.1million in the year to 31 December 2014 with an operating loss of £0.7 million. Audited results for the year ended 31 December 2015 have yet to be finalised but the business is expected to break even for that period on sales of £9.6 million of which £6.1 million is to BPI in the UK. Approximately 80% of sales to BPI in the UK are expected to continue after completion. The gross assets subject to the Disposal were £8.7 million as at 31 December 2014.

The estimated gain on disposal which will be included in the accounts for year ended 31 December 2016 will be approximately £4 million reflecting property and foreign exchange gains.

BPI will announce its Preliminary Results for the twelve months ended 31 December 2015 on Monday, 29 February 2016.

Ends

John Langlands

Chief Executive

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