ELG Eleksen Grp

RNS Number:4868P
Eleksen Group PLC
15 January 2007


                               Eleksen Group plc

                          ("Eleksen" or the "Company")


Eleksen raises a further #4.0 million through the issue of 7.5% Convertible
Secured Loan Notes 2009


15 January 2007



Eleksen Group plc, which makes smart fabrics that can be used to control
electronic devices such as smartphones and MP3 players, has raised a further
#4.0 million through the issue of 7.5% Convertible Secured Loan Notes 2009 (the
"Notes").


On 23 November 2006, the Company announced that it had raised #1.68 million
through the issue of Notes and that further announcements about additional
funding would be made in due course. Today's announcement completes the
Company's funding programme and, as a result, the Company does not envisage
progressing with the #1million working capital facility discussed previously.


The Directors intend to use the funds for:


   * the acceleration of core technology development
   * building the Company's infrastructure both in the US and Far East
   * marketing to support anticipated product demand
   * working capital to meet the needs of expansion driven by the anticipated
    upturn in product demand


Robin Shephard, Chief Executive Officer, said:


"We have now raised over #5.6 million in a programme which leaves the Company
fully funded and financially secure. As our recent developments with Microsoft
and Apple show, there is no shortage of opportunities for our technology. We are
now better placed to exploit these and to grow the business, not least in the US
where partner interest from some major corporates is encouragingly strong.


"The funds will be used to support the Company's growth strategy. We have had a
successful 2006, developing the Eleksen brand and making some important customer
wins amongst Tier 1 customers. We are now well positioned to execute our
strategic plan and to achieve significant growth in 2007. The funding is an
important development for the Company and for its shareholders."


The Notes, which mature on 31 March 2009, carry a coupon of 7.5% per annum and
are convertible into ordinary shares of Eleksen at a conversion price of 40p. In
addition, each Noteholder will be issued with a warrant which allows it to
acquire one Eleksen share, at a price of 43p, for every #2 principal amount of
Notes held. The rights of the Noteholders to convert into shares will be amended
whereby the Noteholders will be able to convert into shares after the date of
issue of the Notes (it was previously only after 18 May 2007), while the Company
may require conversion at any time after 15 January 2008 if the Company's share
price has traded at or above 75p for a period of not less than 21 consecutive
days. Other than certain other proposed amendments (applicable to both the
earlier and this further issue) the terms for the Notes will be substantially
the same as those for the earlier issue.


The fundraising is subject to, amongst other things, the signing of six month
orderly market agreements by certain shareholders and Noteholders, and approval
in an Extraordinary General Meeting of the Company. A notice convening such a
meeting will be sent to shareholders in due course.

City Capital Corporation Ltd is acting as Lead Arranger for the Loan Note
transaction.


Ends



For further information, please contact

Eleksen                                                           08700 72 72 72
Robin Shephard, Chief Executive
Ted Bechman, Chief Financial Officer

City Capital Corporation Ltd                                       020 7583 5800
Marcus Scott 

Panmure Gordon                                                     0207 459 3600
Andrew Godber

Cubitt Consulting                                                  020 7367 5100
Michael Henman

About Eleksen


Eleksen's core technology, ElekTex, enables fabric to be programmed, creating
touch sensitive controls for a wide range of electronic devices.


Eleksen's initial focus is on wearables, such as soft MP3 controllers integrated
into outdoor jackets, rucksacks and suits; and on soft, fabric keyboards for
smartphones and PDAs. A wide range of other applications may exist including
solutions for the toy, industrial, military, automotive and healthcare markets.


Further information on the Group is available at www.eleksen.com




Appendix


1. Notifiable interests immediately following the issue of the Notes and
Warrants



Upon the issue of the Notes and Warrants, the Directors are aware that, as at
the date of this announcement, the following persons would then be interested,
directly or indirectly, in 3 per cent. or more of the issued share capital of
the Company following the issue of the Notes and Warrants:

Name of          Shareholder's interest in       Percentage of the total issued
Shareholder      number of Ordinary Shares       share capital of the Company

Absolute
Capital
Management
Holdings
Limited                          6,000,000                                12.8%

Advicorp plc                     1,500,000                                 3.5%

DKR
SoundShore                       4,500,000                                 9.9%
Oasis                            
Holding
Fund Limited


2. Right to nominate a director


Pursuant to the terms of their subscription for the Notes and Warrants, Absolute
Capital Management Holdings Limited, Advicorp plc and DKR SoundShore Oasis
Holding Fund Limited shall be entitled to jointly nominate one director for
appointment on the board of directors of the Company pursuant to article 89.1 of
the Company's articles of association.







                      This information is provided by RNS
            The company news service from the London Stock Exchange

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