AMR Armour Grp

TIDMAMR

RNS Number : 2408I

Armour Group PLC

23 July 2012

Armour Group plc ("Armour" or the "Group")

Replacement Loan facility

Armour, the UK's leading consumer electronics group focused on the in-car communications and entertainment and home entertainment markets, announces that Hawk Investment Holdings Limited ("Hawk") has agreed to lend the Group GBP2.0 million ("New Loan") which will replace the existing loans of GBP2.0 million from Hawk ("Existing Loans") which expire on 23 July 2012.

The terms of the New Loan will be the same as the terms of the Existing Loans save for Hawk having the right to convert the New Loan into ordinary shares in the event that the Company issues equity in a future fundraise. Any conversion would be subject to consent of the Takeover Panel and approval by shareholders independent of Hawk, to waive the obligation on Hawk and associated parties to make a general offer for the Company pursuant to Rule 9 of the Takeover Code which might otherwise arise on such conversion. Subject to the above, Hawk will have the right to convert the capital and accrued interest of the New Loan into equity at the lower of the issue price of any equity at the time of a fundraise or average mid-market closing price of such ordinary shares over the five Business Days preceding such fundraise. The New Loan will expire 364 days following the receipt of funds should it not be converted.

The Existing Loans will be repaid on 23 July 2012 and the Company expects to receive the New Loan on or before 6 August 2012. During the interim period, the Company has agreed a bridging loan ("Interim Loan") of GBP2.0 million from Southwind Limited ("Southwind"). The Interim Loan carries interest at 12% per annum based on a 365 day year. It is expected to be utilised for a maximum of ten business days from 23 July 2012 and drawdown of the New Loan allows the Interim Loan to be repaid.

The New Loan carries an interest rate of 1% per month and can be repaid at any time at the request of the Company with no early redemption cost. The New Loan will be secured by way of a debenture, which will rank behind the security in respect of the funding facilities provided by GE Commercial Finance Limited.

Hawk is an investment vehicle controlled by ALR Morton. Hawk owns 29.9% of the issued ordinary share capital of Armour and is deemed to be in concert with various other parties as detailed in the circular of 28 January 2011. Southwind does not have an interest in the share capital of Armour but is considered to be a related party of ALR Morton. In aggregate, ALR Morton and persons acting in concert with him, hold 39.1% of the issued ordinary share capital of Armour.

Due to the above shareholding and ALR Morton's position as Chairman of Armour, the New Loan from Hawk and the Interim Loan from Southwind are deemed to be related party transactions under Rule 13 of the AIM Rules. The Independent Directors (being all directors excluding ALR Morton), having consulted with the Group's nominated adviser finnCap, consider that the proposed transactions are fair and reasonable insofar as the Group's shareholders are concerned.

Further Details:

Armour Group plc: Tel: 01892 502700

George Dexter

John Harris

FinnCap: Tel: 020 7220 0500

Geoff Nash

Ben Thompson

Stephen Norcross (Broking)

This information is provided by RNS

The company news service from the London Stock Exchange

END

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