Update on EWMG & Appointment of Director

EW GROUP LIMITED

("EW Group" or "the Company")

Update on Valuation of European Wealth Management Group Plc

Increase of interest in European Wealth Management Group Plc

Appointment of Non-Executive Director

Update on Valuation of European Wealth Management Group Plc

On 4 February 2013, the EW Group referred to an exercise to re-assess the carrying value of its investment in European Wealth Management Group Plc ("European Wealth") in preparation for the audit for the year to 31 December 2012. 

The original investment in April 2012, at which time European Wealth had approximately £155 million of contracted assets under management ("AUM"), valued European Wealth at approximately £2.17 million. Since then, supported by approximately £1.8 million of loan financing from the Company, European Wealth's AUM has increased nearly fourfold to more than £0.6 billion, with the expectation of at least a further £100 million of AUM to be added over the following 6 months. 

Based on their recently completed analysis, the Directors believe that the current market value of the investment in European Wealth may be at least four times the carrying value in the balance sheet. Such an increase would have more than doubled the NAV per share reported for the half year to June 2012.

Increase of interest in European Wealth Management Group Plc

The Company is further pleased to announce that, following the completion of the re-valuation exercise referred to above, it has increased its holding in European Wealth to approximately 48.81% through two transactions. Under the first transaction (the "Loan Settlement"), European Wealth have agreed to issue 61,991 ordinary shares in European Wealth ("Settlement Shares") to the Company in satisfaction of loans owing to the Company of £822,000. Under the second transaction (the "Share Swap"), the Company is acquiring 58,948 shares ("Sale Shares"), in aggregate, in European Wealth (being a mixture of A ordinary shares, B ordinary shares and C ordinary shares) from various other shareholders of European Wealth ("Sellers") ("Acquisition"). Consideration for the Sale Shares is being satisfied by the issue to the Sellers of 56,847,461 new ordinary shares of 0.1p each in the Company ("Ordinary Shares") in aggregate ("Consideration Shares"). 

Based upon the closing mid-market price of £0.01375 pence per Ordinary Share on 5 March 2013, being the last practical day prior to the date of this announcement, the value of the Consideration Shares is approximately £781,652.59. This implies a value for European Wealth of £13.26 per share or approximately £8,012,670, with the Company's 48.81% equating to a valuation at that price of approximately £3,910,745, equivalent to approximately 80% of the Company market capitalisation, as enlarged by the issue of the Consideration Shares.

Following the issue of the Consideration Shares, the Company's issued ordinary share capital will comprise 356,552,469 Ordinary Shares ("Enlarged Share Capital"). The Consideration Shares represent approximately 15.94 per cent. of the Company's Enlarged Share Capital. All of the Company's Ordinary Shares carry voting rights and this figure may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Services Authority's Disclosure and Transparency Rules.

Application for the admission of the Consideration Shares to trading on the AIM market of the London Stock Exchange is being made and trading in the Consideration Shares is expected to commence on 12 March 2013.

Appointment of Director

The Board is also pleased to announce that John Morton has agreed to join the board of the Company as a non-executive director with immediate effect.

John is a founder shareholder of European Wealth Management Group plc. Prior to founding European Wealth Management Group plc, John was the Chief Executive of Syndicate Asset Management plc, having previously been the Chief Executive of Ashcourt Holdings Plc. Prior to this, he was the Investment Director of Brachers LLP, and was previously at Hill Samuel Investment Management Limited, Schlesinger Investment Management Service Limited, Target Trust Managers Limited and Abtrust Fund Managers Limited. John has over 33 years' experience of managing institutional and private client accounts, and the management and acquisition of wealth management businesses.

In accordance with Schedule two paragraph (g) of the AIM Rules, the Company announces the following information in respect of John's current and past directorships.

Alan John Morton (John) (53) is currently a director of the following companies:

John was a director of the following companies during the past 5 years:

Related Party Transactions and Substantial Transaction

The following transactions are Related Party Transactions for the purposes of AIM Rule 13, and accordingly were conditional upon the approval of the independent directors of the Company ("Independent Directors").

- the acquisition, as part of the Share Swap, of 27,027 A ordinary shares of £1.00 each in the capital of European Wealth from Courvoisier & Associés S.A ("Courvoisier"). Kishore Gopaul, a non-executive director of the Company, is a director of Courvoisier and Courvoisier, prior to the Acquisition, held 62,850,095 Ordinary Shares. 26,063,856 Consideration Shares have been issued to Courvoisier, thus Courvoisier's shareholding has increased to 88,913,951 Ordinary Shares, representing approximately 24.94 per cent. of the Enlarged Share Capital; and

- the acquisition, as part of the Share Swap, of 4,755 A ordinary shares of £1.00 each in the capital of European Wealth from Roderick Gentry. Mr Gentry is a non-executive director of the Company, a substantial shareholder of the Company and a director of European Wealth. 4,585,708 Consideration Shares have been issued to Mr Gentry. Mr Gentry's shareholding as a result is 38,945,109 Ordinary Shares, representing approximately 10.92 per cent. of the Enlarged Share Capital. The acquisition of shares from Mr Gentry is a related party transaction by virtue of aggregation of transactions over the past 12 months pursuant to AIM Rule 16; and

- the Loan Settlement.

The Independent Directors have given careful consideration to the transactions in order to determine whether the Loan Settlement and the acquisitions of European Wealth shares from Courvoisier and Mr Gentry set out above are fair and reasonable for the Company's shareholders as a whole. Having consulted with Daniel Stewart & Company Plc, the Company's nominated adviser, the Independent Directors believe that the related party transactions outlined above are fair and reasonable insofar as the Company's shareholders are concerned.

In addition, the acquisition of shares from Courvoisier described above and the Loan Conversion are substantial transactions for the purposes of Rule 12 of the AIM Rules.

Directors Dealing

4,743,034 Consideration Shares have been issued to John Morton, as a result John's shareholding has increased to 28,121,191 Ordinary Shares, representing approximately 7.89 per cent. of the Enlarged Share Capital.

Significant shareholders

Following the issue of the Consideration Shares, the Company has received the following disclosures in respect of significant shareholders in the Company:

* a trust of which Tim Revill is a potential beneficiary

Further information please contact:

Kingswalk Investments Limited

Paul Everitt: +44 (0)14 8173 2888

Daniel Stewart & Company Plc - Nominated Adviser and Broker

Antony Legge, Director, Corporate Finance: +44 (0)20 7776 6550