Subscription, New Investing Policy and Notice of EGM

TEP EXCHANGE GROUP PLC - Subscription, New Investing Policy and Notice of EGM

PR Newswire

London, February 21

The Company is pleased to announce that it intends to raise £200,000 beforeexpenses by means of a subscription ("Subscription") for 1,479,999,999 newOrdinary Shares at 0.0135p per Ordinary Share ("Subscription Shares") and thatit intends to utilise those funds in connection with implementing a proposednew investing policy for the Company, further details of which are set outbelow.

The Subscription is conditional, inter alia, upon: (i) Shareholders passingResolutions at the General Meeting which is to be convened at 10am on 15 March2013 and (ii) the Subscription Shares being admitted to trading on AIM.

Application will be made for the Subscription Shares to be admitted to tradingon AIM and it is expected that Admission will become effective and thatdealings in these shares will commence on 23 March 2013. The SubscriptionShares, when issued and fully paid, will rank equally in all respects with theissued Ordinary Shares, including the right to receive all dividends and otherdistributions declared, made or paid after Admission.

The Company also announces that, in order to facilitate the Subscription,certain Shareholders have exercised warrants to subscribe for a total of630,000,000 new Ordinary Shares at an exercise price of 0.002p per OrdinaryShare ("Warrant Shares"). The 630,000,000 new Ordinary Shares are expected tobe admitted to trading on AIM on 18 March 2013. The Warrant Shares, when issuedand fully paid, will rank equally in all respects with the issued OrdinaryShares, including the right to receive all dividends and other distributionsdeclared, made or paid after Admission.

Accordingly, the interim dividend will be paid out to the Ordinary Shares inissue following the Warrant Exercise but before the Subscription.

Following the issue of the Warrant Shares the Company will have 1,479,999,999ordinary shares in issue. Following issue of the Subscription Shares theCompany will have 2,959,999,998 ordinary shares in issue.

Proposed New Board

Conditional on Admission, Donald Strang, Hamish Harris and Grant Roberts willbe appointed to the Board as Non-Executive Directors. David Roxburgh and GeorgeKynoch will remain on the Board and Abraham Weitz and Moses Kraus will resignfrom the Board, conditional on Admission. Following Admission, the New Boardwill be: Donald Strang as Non-Executive Chairman; David Roxburgh as ManagingDirector; and Hamish Harris, Grant Roberts and George Kynoch as Non-executiveDirectors. Further information on Donald Strang, Hamish Harris and GrantRoberts is set out below.

Donald Ian George Layman Strang (proposed Non-executive Chairman), aged 45, isa member of the Australian Institute of Chartered Accountants and has been inbusiness over 20 years, holding senior financial and management positions inboth publicly listed and private enterprises in Australia, Europe and Africa.Mr Strang has considerable corporate and international expertise and over thepast decade has focussed on mining and exploration activities.

He is currently the Non-Executive Chairman of AIM quoted Polemos plc, theFinance Director of AIM quoted Stellar Resources plc and the Executive Chairmanof AIM quoted 3D Resources plc.

Hamish Hamlyn Harris (proposed Non-executive Director), aged 42, holds aBachelor of Commerce from the University of Tasmania. He has held positionswithin product control, market risk and risk management at a number offinancial institutions including Nomura Group, Dresdner Kleinwort Wasserstein,Deutsche Bank AG and Lloyds Banking Group plc. Hamish currently holds aposition with Nivalis Capital. He is currently a director of Marlin AtlanticFinance Limited and a Non-Executive Director of AIM quoted Polemos plc.

Grant Roberts (proposed Non-executive Director), aged 42, holds a Bachelor ofCommerce from Murdoch University and has had over 15 years of experienceworking in private equity in the UK including with 3i, Newgate Partners andpresently as a founding partner of Newgate LLP.

Proposed New Investing Policy

The Company's proposed new investing policy is to invest in and/or acquirecompanies and/or projects with clear growth potential. The geographical focuswill primarily be Africa, however, investments may also be considered in otherregions to the extent that the New Board considers that value opportunitiesexist and attractive returns can be achieved.

In selecting investment opportunities, the New Board will focus on businessesthat are available at attractive valuations and hold opportunities to unlockimbedded value.

The New Board will seek to invest in businesses where it may influence thebusiness at a board level, add their expertise to the management of thebusiness, and utilise their significant industry relationships and access tofinance. The ability to work alongside a strong management team to maximisereturns through revenue growth will be something the New Board will focus upon.

The Company's interests in a proposed investment and/or acquisition may rangefrom a minority position to full ownership. The proposed investments may beeither quoted or unquoted and may be in companies, partnerships, earn-in jointventures, debt or other loan structures, joint ventures or direct interests inprojects. The New Board may focus on investments where intrinsic value can beachieved from the restructuring of investments or merger of complementarybusinesses.

The New Board expects that investments will typically be held for the medium tolong term, although short term disposal of assets cannot be ruled out if thereis an opportunity to generate an attractive return for Shareholders.

There is no limit on the number of projects into which the Company may invest,and the Company's financial resources may be invested in a number ofpropositions or in just one investment, which may be deemed to be a reversetakeover under the AIM Rules. The Directors intend to mitigate risk byappropriate due diligence and transaction analysis. Any transactionconstituting a reverse takeover under the AIM Rules will also requireShareholder approval. The New Board considers that as investments are made, andnew promising investment opportunities arise, further funding of the Companymay also be required. The New Board has not excluded the possibility ofbuilding a broad portfolio of assets.

Where the Company builds a portfolio of related assets it is possible thatthere may be cross holdings between such assets. The Company does not currentlyintend to fund any investments with debt or other borrowings but may do so ifappropriate. Investments in early stage assets are expected to be mainly in theform of equity, with debt being raised later to fund the development of suchassets. Investments in later stage assets are more likely to include an elementof debt to equity gearing. The New Board may also offer new Ordinary Shares byway of consideration as well as cash, thereby helping to preserve the Company'scash for working capital and as a reserve against unforeseen contingenciesincluding, for example, delays in collecting accounts receivable, unexpectedchanges in the economic environment and operational problems.

A notice convening a General Meeting to be held at the offices of MerchantSecurities Limited, 10 King William Street, London EC4N 7TW at 10am on 15 March2013 has been dispatched to shareholders today. This notice of General Meetingcontains resolutions to give effect inter alia to the proposals set out above,which are conditional on the passing of the Resolutions.

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