Vivergo Fuels Limited

Redhall Group plc

("the Group")

VIVERGO FUELS LIMITED

Redhall Group plc, the specialist engineering support services group, via its subsidiary Redhall Engineering Solutions Limited ("the Company") has, since March 2010, been executing a contract for Vivergo Fuels Limited ("Vivergo"), a joint venture between BP, British Sugar and DuPont to fabricate and install pipework for a new bio-ethanol plant on the BP Salt End site.

Today Vivergo has taken action to repudiate our contract and this repudiatory breach has brought the contract to an immediate end. As a consequence of Vivergo's action, the workforce employed on the site have been transferred under TUPE regulations to Vivergo (or any successor contractor).

The Company has to date completed 78% of the original contract plus variations. There are currently approximately £14 million of costs on the contract which are, as yet, unpaid. The Group intends to vigorously pursue the recovery of these costs plus damages although the outcome of any settlement will be subject to normal legal process. The Board had anticipated trading profits in the current financial year for the Vivergo contract to be in the region of £1.7 million.

Following the agreement of the new £25 million banking facilities announced on 24th January 2011, the Board can confirm there remains sufficient facility and covenant headroom to pursue our entitlement under the Vivergo contract as well as to fund the Group's ongoing working capital requirements.

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