Settlement of dispute with Turbocare S.p.A.

29 October 2014

IPSA Group PLC

("IPSA" or the "Company")

Settlement of Dispute with Turbocare S.p.A.

The Directors of IPSA are pleased to announce that a dispute over sums owed to Turbocare S.p.A ("Turbocare") under the sale and purchase agreements and the refurbishment agreement for the Siemens Westinghouse 701DU (ex Fiat Avio TG50) turbines purchased from Turbocare in 2007 has today been settled by an agreement reached between the parties under which Turbocare will be paid an initial sum of 3 million euros on or before 21 November 2014 and a further sum of 2.6 million euros in cash or equivalent value by 30 September 2015. Security for these sums has been put in place by IPSA through a charge over a receivable in the amount of £3.2m due from Rurelec PLC ("Rurelec") for the balance of payments due following its purchase of two 701DU turbines in June 2013.

As previously notified, the disputed amounts claimed by Turbocare have already been fully provided for in the Company's financial statements in an amount of £4.4m, being €5.6m at current exchange rates.

The Company is in discussions for the provision of loan finance to bridge the sum owed by Rurelec. The Company will need to raise at least 3 million euros by 21 November 2014 to make the initial cash sum payment to Turbocare to avoid security being called by Turbocare.

Chairman Richard Linnell, commenting, said that he was delighted that a settlement had been reached, and that an arbitration had been averted, allowing management to focus on the operations of the business.

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