Sale of Turbines

20 July 2011

IPSA Group PLC

("IPSA" or "the Company")

Sale of Turbines

IPSA Group PLC (AIM:IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that that it has entered into equipment sale agreements in respect of its four Siemens Westinghouse 701 DU gas turbines for an aggregate consideration of US$66 million (£41 million at yesterday's exchange rate).

Bright Day Pte Limited ("Bright Day"), a Singapore-based investment company, has agreed to purchase two of the Turbines (the "Bright Day Agreement") for its barge-mounted projects under development.

Under the Bright Day Agreement, which was executed on 19 July 2011, two turbines have been sold for the aggregate consideration of US$35 million. A deposit of US$2 million is payable, with the balance due no later than 120 days from signature. The Bright Day Agreement is conditional upon, inter alia, the agreement of IPSA's two main creditors, Standard Bank PLC (the "Bank") and Turbocare SpA ("Turbocare"). However, under the terms of the agreement, this condition precedent may be waived at Bright Day's sole discretion. A further announcement will be made when appropriate.

Bridgehouse Capital Limited ("Bridgehouse"), a private equity investment and advisory firm, has agreed to purchase the second pair of turbines ("the "Bridgehouse Agreement").

Under the Bridgehouse Agreement, which was executed on 15 July 2011, the two turbines have been sold for aggregate consideration of US$31 million. This agreement is conditional upon the agreement of the Bank and Turbocare. However, under the terms of the agreement, this condition may be waived at Bridgehouse's option, and the waiver of Bridgehouse has now been received.

Of the total purchase price in the Bridgehouse Agreement, a deposit of US$3.9 million in aggregate is payable by way of a payment of US$2 million in cash and the cancellation of loans made by Sterling Trust Limited and Independent Power Corporation PLC ("IPC"). The balance of the consideration is due within 120 days of the date of this agreement.

IPSA has agreed that all proceeds from the two sales contracts, including the deposits, will be paid into a trust account to be operated by the Bank and Turbocare, who will receive funds ahead of all other creditors. Thereafter, funds will be released to the Company. The Directors anticipate that following receipt of all the proceeds, the Company will be in a position to settle with all its creditors and that it will retain sufficient working capital for its current operational needs for the foreseeable future. Our wholly-owned subsidiary continues to show positive cashflow, and the Directors remain hopeful that a satisfactory resolution in respect of the £4m dispute with Sasol Gas Limited can be achieved.

The latest reported carrying value of the assets held for sale was £31.6 million as set out in the annual report dated 31 March 2011. However, the working capital position of the Company will remain tight until the sale of the Turbines is complete. Additional working capital for the intervening period will be required to pay operating expenses and repay the Loan Notes due on 31 July 2011, unless the repayment period is extended.

Commenting, Richard Linnell, Chairman of IPSA, said:

"I am pleased that we finally have sale agreements for all four of the Turbines. It has been a long process but I am delighted that we now have clarity and an acceptable quantum from the sale of these IPSA assets. Our original plan was to install the turbines in South Africa but, as a result of the changes in economic circumstance since 2008, other countries will now benefit from these excellent machines.

IPSA shareholders will be pleased to note that the headline price of the turbines is considerably more than IPSA paid for them four years ago."

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