GLI Finance : Proposed acquisition of interests & notice of EGM

16 May 2016

GLI Finance Limited

('GLI' or the 'Company')

Proposed acquisition of interests in Sancus Gibraltar and BMS

and simplification of the GLI group structure (the Proposals)

and

Notice of Extraordinary General Meeting

GLI, an alternative finance provider to small and medium sized enterprises, is pleased to announce that the Company has entered into conditional share sale and purchase agreements in respect of the acquisition by the Company of certain interests in entities within the Sancus and BMS sub-groups of the Company (the Acquisitions). The move follows a strategic review of the Company's operations initiated by the Company's new CEO Andy Whelan in December 2015.

The Proposals do not require the approval of Shareholders. However, the Board would like to offer Shareholders the opportunity to consider what the Board believes is an important step in the development of the GLI's business. The Board recommends the Proposals to Shareholders as it is of the view that the transaction will simplify GLI's group structure, drive operational and financial efficiency, remove perceived conflicts and better position GLI for the further development and expansion of its niche lending businesses and platform portfolio.

Following completion, the combined Sancus BMS Group is expected to make pre-tax profit of approximately £2.5 million in 2016, rising to approximately £4 million in 2017 when loan books are fully deployed, the businesses are fully integrated and increasing levels of commercial, operating and financial synergies are realised. The Board also sees potential for the Sancus BMS Group in terms of generating free cash flow to service future dividend payments to the Company's Ordinary Shareholders, with this free cash flow to be paid up to the Company.

Notice of an Extraordinary General Meeting of the Company is therefore given, with the meeting to be held at the Company's registered office at 10.30am on 6 June 2016 for the purpose of considering, and if thought fit, approving the Proposals. A circular, including a notice convening the Extraordinary General Meeting (the Circular), will today be posted to Shareholders and a copy will also be made available to view on the Company's website at www.glifinance.com.

Highlights and summary of the Proposals:

· The purpose of the Acquisitions is to increase the Company's stake in the Sancus and BMS sub-groups and consolidate them under a new 'Sancus BMS' brand, in order to create one unified lending business, operating in 5 jurisdictions; Jersey, Guernsey, Gibraltar, UK and Ireland.

· Subject to shareholder approval the Company has agreed to acquire certain interests in the Sancus Gibraltar and BMS businesses as follows:

o The entire issued share capital of Sancus (Gibraltar) Limited ('Sancus Gibraltar') from Sancus Gibraltar Holdings Limited ('Sancus Gibraltar Holdings') and the intragroup loans (the 'Intragroup Loan') made by Sancus Gibraltar Holdings to Sancus Gibraltar for a total consideration of £23.5 million, to be settled by the issue of 43,408,360 New Ordinary Shares issued by the Company at a fixed price of 31.1 pence per New Ordinary Share (being an aggregate issue price of £13.5 million) and new 7 per cent. unsecured bonds due 2021 issued by the Company (the 'Bonds') in an aggregate principal amount of £10 million (the 'Sancus Gibraltar Acquisition'); and

o The ordinary shares that it does not already own in GLIF BMS Holdings Limited ('GBHL') from Tranquil Capital Limited ('Tranquil') and the BMS Management Sellers for a total consideration of approximately £5.175 million (subject to adjustment), to be settled by the issue of 11,093,247 New Ordinary Shares to the BMS Management Sellers at a fixed price of 31.1 pence per New Ordinary Share (being an aggregate issue price of £3.45 million) and the payment to Tranquil of £482,950 in cash, funded from existing cash resources and the satisfaction of certain sums owed by Tranquil to GBHL (the 'BMS Acquisition').

· The effect of the transaction on the NAV of the Company will be initially to reduce the Company's pro forma NAV by 2.7p per share, or 1.8p per share on an adjusted basis while taking 100% ownership of strong, profitable and cash generative businesses with significant strategic benefits to the Group and potential for Shareholder value creation.

· Following completion, Sancus Group Limited (SGL), a wholly owned subsidiary of the Company, will be the sole shareholder of the Jersey, Guernsey and Gibraltar subsidiaries of Sancus. It will also be the sole shareholder of GLIF BMS Holdings Limited. SGL continues to hold its minority shareholding in Sancus IOM Holdings Limited.

· It is also intended for the Company to make an inter-company transfer of its 84% holding of ordinary shares and £5 million in preference shares in Platform Black to SGL, and to rename Platform Black as Sancus (PB) Limited.

· SGL, the holding company for these entities, will then be rebranded Sancus BMS. Andy Whelan, the chief executive officer of the Company, will be appointed chief executive of Sancus BMS.

· The Bonds to be issued in connection with the Sancus Gibraltar Acquisition are to be listed on the Cayman Islands Stock Exchange and to be tradeable on the platform of UK Bond Network Limited, one of the Company's platform investments.

· The Company also intends to make available further Bonds to Eligible Investorsin an initial amount of up to £4 million through UK Bond Network Limited as agent for the Company, using its designated website auction platform. The net proceeds from the UK Bond Network Issue will be applied towards repayment of the Company's existing syndicated loan facility with Sancus (Jersey) Limited and other lenders. The amount outstanding under the Sancus Loan Facility as at 13 May 2016 (being the latest practicable date prior to publication of this announcement) was £14.86 million.

· Eligible Investors who wish to access further details and participate in the UK Bond Network Issue will need to become a member of UK Bond Network's platform. Eligible Investors should initially register their interest atwww.ukbondnetwork.com/GLIFinance. The Company's current intention is for the closing of the UK Bond Network Issue to coincide with the Completion of the Acquisitions on or around 30 June 2016. The Company will make a further announcement once the relevant offer documentation has been made available on the UK Bond Network platform.

Commenting on the proposals, Andy Whelan, the Chief Executive of the Company said:

'As the Company has developed over the past 4 years, following its shift in focus in 2012, its structure has become inefficient and an impediment to growth.

The proposals announced today will provide financial and operational efficiencies through simplifying the Group's structure, and better position the Group for the further development and expansion of its niche lending businesses and platform portfolio. The Board believes that this is an exciting time for GLI as we continue the execution of our long-term growth strategy.

The Proposals do not require Shareholder approval, however the Board believes it appropriate to give shareholders the opportunity to consider the Proposals, hence our decision to call an Extraordinary General Meeting.'

Enquiries:

GLI Finance Limited

Andy Whelan

+44 (0)1534 708900

Panmure Gordon (Nominated Adviser and Corporate Broker)

Dominic Morley

+44 (0)20 7886 2954

Peter Steel

+44 (0)113 357 1152

Charles Leigh-Pemberton

+44 (0)20 7886 2906

Instinctif Partners (PR Advisor)

Tim Linacre / Nick Woods

+44 (0)207 457 2020

1. Introduction

In December 2015, the Company's new chief executive officer Andrew Whelan initiated a strategic review of the Company's operations. As part of the review and as announced on 29 March 2016, the Company has been exploring how to maximise the value of its existing niche lending businesses. In this regard, the Board announces that on 14 May 2016 the Company entered into conditional share sale and purchase agreements in respect of the acquisition by the Company of certain interests in entities within the Sancus and BMS sub-groups of the Group as follows:

§ the entire issued share capital of Sancus (Gibraltar) Limited ('Sancus Gibraltar') from Sancus Gibraltar Holdings Limited ('Sancus Gibraltar Holdings') and the intragroup loan (the 'Intragroup Loan') made by Sancus Gibraltar Holdings to Sancus Gibraltar for a total consideration of £23.5 million, to be settled by the issue of 43,408,360 New Ordinary Shares issued by the Company at a fixed price of 31.1 pence per New Ordinary Share (being an aggregate issue price of £13.5 million) and new unsecured 7 per cent. bonds due 30 June 2021 issued by the Company ('Bonds') in an aggregate principal amount of £10 million (the 'Sancus Gibraltar Acquisition'); and

§ the ordinary shares that it does not already own in GLIF BMS Holdings Limited ('GBHL') from Tranquil Capital Limited ('Tranquil') and the BMS Management Sellers for a total consideration of £5.175 million (subject to adjustment), to be settled by the issue of 11,093,247 New Ordinary Shares to the BMS Management Sellers at a fixed price of 31.1 pence per New Ordinary Share (being an aggregate issue price of approximately £3.45 million), the payment to Tranquil of £482,950 in cash and the satisfaction of certain sums owed by Tranquil to GBHL (the 'BMS Acquisition').

The share sale and purchase agreements relating to the proposed Acquisitions are described in further detail below.

The purpose of the Acquisitions is to increase the Company's stake in the Sancus and BMS sub-groups and to consolidate them under a new 'Sancus BMS' brand, in order to create one unified operating subsidiary lending to businesses and the owners of businesses in niche markets with a high return on capital. The Board believes that this will simplify the Group structure, reduce the scope for conflicts of interests to arise, provide a mechanism by which key individuals within the Sancus and BMS sub-groups will increase their longer-term commitment to the Group and better position the Group for the further development and expansion of its platform and lending businesses. In addition, as part of its ongoing balance sheet management, the Company proposes to issue up to £4 million of Bonds through UK Bond Network Limited.

The Proposals set out below do not require the approval of Shareholders. However, the Board would like to offer Shareholders the opportunity to consider what it believes is an important step in the development of the Group's business. Accordingly, the Circular will today be posted to Shareholders, providing details of and background to the Proposals and the reasons why the Board considers that the Proposals are in the best interests of the Company and Shareholders as a whole. The Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the Extraordinary General Meeting to be held at 10.30 a.m. on 6 June 2016, as the Directors intend to do in respect of their own holdings of Ordinary Shares. The Notice convening this meeting is set out in Part 3 of the Circular.

2. Background to and reasons for the Proposals

Since the Company's incorporation in 2005, its primary objective has been to achieve a return on equity of 10 to 15 per cent. per annum through the provision of finance to SMEs and this remains the case. The Company's strategy for achieving this objective has evolved over time and the Company's focus in recent years has been on establishing itself as a leading player in the rapidly growing alternative finance sector.

This shift in focus for the Group began in 2012 with the acquisition of a majority stake in BMS Finance AB Limited ('BMS'), a senior lending business focused on SMEs, for total consideration of £11.6 million. The Company has a 62.5 per cent. equity stake in GBHL, which in turn holds a 100 per cent. interest in BMS, the UK operating business. GBHL also holds certain non-core interests which relate to the legacy Noble Venture Finance fund and which are to be sold in order to further simplify the overall structure.

BMS provides senior secured lending up to £5 million to UK and Irish SMEs which are at, or approaching, profitability. The funding for the BMS loan portfolio is derived partly from its own balance sheet, partly from the Company and partly through each of the British Business Bank and the Ireland Strategic Investment Fund (ISIF) under matched funding agreements. The ISIF mandate is a recent win for BMS and will allow the business to expand its operations in Ireland. In addition, the Company holds 10 year 7 per cent. interest-bearing loan notes issued by GBHL in a principal amount of approximately £16 million. GBHL draws on this facility in order to support BMS's growing loan book.

The loan book for BMS continues to develop and this is expected to increase over time. Having originally been a pure balance sheet lender, when the Company funded the management buyout in 2012, BMS has built up third party capital through its matched funding arrangements. As the proportion of third party capital grows, the profitability of the core business is expected to increase.

In December 2014 the Group acquired the entire issued share capital of Sancus (Jersey) Limited (which changed its name from Sancus Limited on 6 May 2016), the Jersey-based operating subsidiary of Sancus Holdings Limited, and Sancus (Guernsey) Limited, a then-dormant subsidiary, for a total consideration of £37.75 million (which was satisfied by the issue of 31,415,930 Ordinary Shares at 56.5 pence per Ordinary Share and a further £20 million in ZDP Shares). Prior to this, the Company had a holding of 8.4 per cent. of Sancus Holdings Limited's ordinary shares and a £3.75 million holding of preference shares.

Sancus (Jersey) Limited provides secured lending to asset rich, cash constrained borrowers. Its target market is entrepreneurs, SMEs, high net worth individuals and professionals. Sancus (Jersey) Limited has continued to see strong growth in its loan origination business, having completed approximately £173 million of loans since inception. All loans are fully secured and the Board believes that its future pipeline is strong.

Sancus (Guernsey) Limited registered as a Non-regulated Financial Services Business with the Guernsey Financial Services Commission in 2015 and the Guernsey business has started to contribute to the Group.

Sancus Gibraltar was incorporated in March 2015 and became operational in 2015 under the Sancus brand in Gibraltar. This business has already completed a total of approximately £34.5 million in loans across 12 transactions, of which three loans totalling approximately £12.5 million have been repaid. Of the £22 million loan book currently outstanding (including a loan to the Company of approximately £2.2 million), approximately £5.8 million has been lent by Sancus Gibraltar and £15.2 million has been co-lent by third parties who have been introduced to the opportunity to lend alongside Sancus Gibraltar. The Board also believes that a solid pipeline of new business is developing.

Sancus Gibraltar has significantly exceeded its forecast profit target for the year to date in its first year of trading and the Board considers that the business is ahead of Sancus (Jersey) Limited at the same stage of its development. Sancus Gibraltar has benefited from the 'lessons learned' by Sancus (Jersey) Limited and its ability to attract co-lenders in its syndicated loan book, which has assisted in leveraging the rate of return on the monies deployed across the loan book.

The Company is also exploring the option of establishing additional operations under the Sancus brand in other offshore jurisdictions, having regard to mitigating the scope for future conflicts of interest.

The Group's interests in Sancus (Jersey) Limited and in Sancus (Guernsey) Limited are held by Sancus Group Limited ('SGL'), a wholly-owned subsidiary of the Company. In addition, SGL holds a 15.29 per cent. holding of ordinary shares in Sancus Gibraltar Holdings, the holding company of Sancus Gibraltar. SGL also has an option to increase its shareholding in Sancus Gibraltar Holdings by a further 1,000 ordinary shares for a total consideration of £1 million, which equates to £1,000 per ordinary share. SGL also holds a 2 per cent. holding of ordinary shares in Sancus IOM Holdings Limited, the holding company of Sancus (IOM) Limited which operates the Sancus brand in the Isle of Man and began trading in December 2015. Similar to its option in respect of Sancus Gibraltar Holdings, SGL also holds an option to acquire up to 20 per cent. in total of the ordinary shares in issue in Sancus IOM Holdings Limited, which expires in December 2018, at a price of £1,000 per ordinary share.

The Board believes that consolidating the Group's holding of these two key platforms and combining their brands and businesses will provide the Group with the opportunity to further develop and expand its activities in the alternative finance arena. Following Completion, the combined Sancus BMS Group is expected to make pre-tax profit of approximately £2.5 million in 2016, rising to approximately £4 million in 2017 when loan books are fully deployed, the businesses are fully integrated and increasing levels of commercial, operating and financial synergies are realised. The Board also sees potential for the Sancus BMS Group in terms of generating free cash flow to service future dividend payments to the Company's Ordinary Shareholders, with this free cash flow to be paid up to the Company.

The Board believes that this is an exciting time for the Company and that the Proposals present an opportunity for the consolidation and development of the Company's core platform and niche lending businesses.

3. Financial information on Sancus Gibraltar and GBHL

Sancus Gibraltar has generated net revenue and pre-tax profit in excess of £1,435,000 and £568,000 respectively in the 11 months since it began trading in June 2015 to April 2016. The net assets of Sancus Gibraltar at 30 April 2016 were approximately £595,000. Post-Completion, the net assets of Sancus Gibraltar (calculated on a pro forma basis making an adjustment for the restructuring of the Intragroup Loan following its transfer to SGL) are expected to be approximately £4.8 million.

GBHL, including its wholly-owned subsidiary BMS, generated consolidated net revenue and pre-tax profit in excess of £6,258,000 and £1,273,000 respectively in the year ended 31 December 2015. The consolidated net assets of GBHL at 31 December 2015 were approximately £3,431,500.

4. The Proposals

4.1 Integration of the Acquisitions and further development of the Sancus BMS sub-group

Subject to Shareholder approval, the Company has agreed to acquire the interests in the Sancus Gibraltar and BMS businesses that it does not already own, by way of the Sancus Gibraltar Acquisition and the BMS Acquisition. The Acquisitions are inter-conditional and, if the Resolution is passed at the General Meeting, Completion is expected to occur on or around 30 June 2016.

Following Completion, SGL will be the sole shareholder of the Jersey, Guernsey and Gibraltar operating subsidiaries of the Sancus sub-group. It will also be sole shareholder of GBHL. The Board believes that a significant element of the complexity associated with the Group's current structure will therefore be removed following Completion as follows:

§ the Board will be able to act with complete autonomy in matters regarding GBHL, including control over distribution of GBHL's profits, which it is not able to do so at present given the significant minority interests that exist within the entity; and

§ the founder shareholders of Sancus Gibraltar Holdings include Andrew Whelan (the Company's chief executive officer) and John Davey (a director of SGL). Whilst the Group has established procedures to manage any conflicts that arise as a result of Mr Whelan's and Mr Davey's respective roles within the Group and their interests in the capital of Sancus Gibraltar Holdings, the scope for such conflicts to arise should be eliminated following Completion.

It is the Company's current intention, following Completion, to also transfer its majority shareholding of Platform Black Limited ('Platform Black') to SGL. Platform Black has an innovative online trading platform and a lending business that is complementary to those of Sancus and BMS. The Company holds approximately 84 per cent. of the ordinary shares of Platform Black and also £5 million of preference shares. Platform Black will be renamed Sancus (PB) Limited as part of these proposals. The intragroup transfer of Platform Black is not conditional on Shareholder approval of the Resolution. The Board believes that the transfer will enable the Sancus BMS Group to leverage Platform Black's technology to increase the scale of its operations.

It is intended that these entities, together with other subsidiaries which may be acquired or incorporated from time to time, will form a single consolidated business to be rebranded as 'Sancus BMS'. The Board anticipates that Sancus BMS will be well placed to further develop its platform and lending businesses as an integral part of the GLI Finance Group, operating under a separate, recognised brand but with the marketing, corporate and administrative support of being part of the Group.

Following Completion, it is anticipated that the management and employees of Sancus Gibraltar will be brought into the Group and their contracts of employment will be continued.

At Completion, each of Ewan Stradling, Shane Lanigan and Martin Ling (directors of BMS and BMS Management Sellers) will enter into an amended and restated employment contract with BMS. Amongst other changes, the new contracts will amend their notice periods to 12 months, in the case of Messers Stradling and Lanigan, and 6 months, in the case of Mr Ling.

It is expected that Andrew Whelan, chief executive officer of the Company, will also become the chief executive officer of the enlarged Sancus BMS sub-group and have an active role in its further development.

4.2 Principal terms of the Sancus Gibraltar Acquisition

Under the terms of the Sancus Gibraltar SPA, SGL has conditionally agreed to acquire the entire issued share capital of Sancus Gibraltar and the Intragroup Loan from Sancus Gibraltar Holdings.

The total consideration payable to Sancus Gibraltar Holdings under the Sancus Gibraltar SPA is £23.5 million, to be satisfied by the Company (as parent company of SGL, the buyer) by:

§ the issue by the Company of 43,408,360 New Ordinary Shares at a fixed price of 31.1 pence per New Ordinary Share (being an aggregate issue price of £13.5 million), which represents a premium of 1 pence to the average closing mid-price per Ordinary Share for the five trading days immediately preceding the date of this announcement; and

§ the issue by the Company of new unsecured 7 per cent. Bonds due 2021 in an aggregate principal amount of £10 million. Further details on the Bonds are set out at paragraph 4.5 below.

Immediately following completion of the Sancus Gibraltar Acquisition, Sancus Gibraltar Holdings' only assets will be 43,408,360 New Ordinary Shares, the Bonds and approximately £250,000 of cash to provide working capital to meet ongoing administrative costs prior to its anticipated liquidation in due course.

The New Ordinary Shares issued to Sancus Gibraltar Holdings under the Sancus Gibraltar SPA will be subject to a lock-up period of three months from the date of Completion. This lock-up period will be extended if there are any outstanding claims for a breach of any of the warranties given by Sancus Gibraltar Holdings under the Sancus Gibraltar SPA. In due course (and, in the case of the New Ordinary Shares, following the expiry of the lock-up period) it is expected that the consideration received by Sancus Gibraltar Holdings under the Sancus Gibraltar SPA will be distributed to its shareholders. It is expected that the New Ordinary Shares will be distributed pro-ratato holders of ordinary shares in Sancus Gibraltar Holdings, and that the Bonds will be distributed pro-ratato holders of preference shares in Sancus Gibraltar Holdings by way of a redemption of such preference shares.

SGL currently holds 15.29 per cent. of the ordinary shares in Sancus Gibraltar Holdings and preference shares in a principal amount of £1.5 million. SGL also holds an option for it to be issued with an additional 1,000 new ordinary shares in Sancus Gibraltar Holdings (in addition to the 10,000 ordinary shares already in issue) for a total subscription price of £1,000,000. Accordingly, following Completion and once the relevant New Ordinary Shares are distributed, SGL expects to receive 6,638,483 New Ordinary Shares in respect of its holding of ordinary shares in Sancus Gibraltar Holdings (or such higher number of New Ordinary Shares as reflects SGL's enlarged shareholding in Sancus Gibraltar Holdings in the event that the option referred to above is exercised) and Bonds in a principal amount of £1,500,000. It is intended that these New Ordinary Shares and Bonds will be transferred to the Company and held in treasury.

Certain of the New Ordinary Shares distributed to the ordinary shareholders of Sancus GibraltarHoldings will be subject to the provisions of Lock-in Deeds as further described at paragraph 4.4 below.

The Intragroup Loan was made available by Sancus Gibraltar Holdings to Sancus Gibraltar on 20 May 2015 and the outstanding principal amount is expected to be approximately £14 million at Completion. The principal amount, plus interest, is repayable on demand. The Intragroup Loan will be transferred to SGL by way of novation.

Completion of the Sancus GibraltarSPA is conditional upon, amongst other things:

§ approval of the Proposals by Shareholders at the General Meeting;

§ approval of the Sancus Gibraltar Acquisition (i) by ordinary shareholders of Sancus Gibraltar Holdings at a general meeting of Sancus Gibraltar Holdings convened for 3 June 2016, (ii) by preference shareholders of Sancus Gibraltar Holdings at a separate class meeting convened for 3 June 2016, and (iii) separately in writing by holders of ordinary shares in Sancus Gibraltar Holdings who together hold at least 75 per cent. of the voting rights attaching to those ordinary shares (excluding those held by the Sancus Gibraltar Holdings Limited Employee Benefit Trust);

§ the simultaneous Completion of the BMS Acquisition; and

§ all preference shares of Sancus Gibraltar Holdings being fully paid up and (other than in respect of £250,000 retained cash, as referred to above) all cash reserves of Sancus Gibraltar Holdings being lent down to Sancus Gibraltar.

SGL may terminate the Sancus Gibraltar SPA prior to Completion in certain standard events, including if SGL becomes aware of any material breach of any of the warranties or undertakings given in favour SGL under the agreement. These may include circumstances where there has been a material adverse change in the financial or trading condition or prospects of Sancus Gibraltar. If the Sancus Gibraltar SPA is terminated, the BMS Acquisition will not complete (unless otherwise agreed by the parties to the BMS SPA).

The Sancus Gibraltar SPA contains warranties given in favour of SGL and covering matters including the ownership of Sancus Gibraltar, its business, employees and finances and other customary matters. These warranties are subject to a financial limit on aggregate claims before any claims can be made and an overall limit such that the maximum liability of Sancus GibraltarHoldings is limited to £21 million. The warranties are also subject to further customary limitations.

Under the Sancus GibraltarSPA, Sancus GibraltarHoldings has given certain undertakings in favour of SGL in respect of the period to Completion. These undertakings include to carry on the business of Sancus Gibraltar in the ordinary and usual course and not to, in respect of that company: make any distributions, make any payment other than routine payments, alter any share or loan capital or make or settle any claims, disputes or legal proceedings.Sancus GibraltarHoldings has also given certain non-competition and non-solicitation undertakings which will last for a period of three years following Completion.

4.3 Principal terms and conditions of the BMS Acquisition

Under the terms of the BMS SPA, the Company has conditionally agreed to acquire the ordinary shares that it does not already own in GBHL from Tranquil Capital Limited ('Tranquil') and the BMS Management Sellers.

The total consideration payable to Tranquil and the BMS Management Sellers under the BMS SPA is £5.175 million, as may be adjusted (up to a maximum consideration of £5.75 million) to reflect the amount of any surplus above £3.8 million in the net asset value of GBHL as shown in completion accounts prepared for the purpose and drawn up to the date of Completion. The consideration is to be satisfied by:

§ the payment to Tranquil of £482,950 in cash;

§ the payment of £1,242,050 in cash in satisfaction of sums owed to GBHL by Tranquil, in part arising from the sale of assets to Tranquil detailed below (which will have no net effect on the cash position of the Group given that, on Completion, GBHL will be a wholly owned subsidiary of the Company); and

§ the issue by the Company to the BMS Management Sellers of an aggregate of 11,093,247 New Ordinary Shares at a fixed price of 31.1 pence per New Ordinary Share (being an aggregate issue price of approximately £3.45 million), which represents a premium of 1 pence to the average closing mid-price per Ordinary Share for the five trading days immediately preceding the date of this announcement.

The New Ordinary Shares issued to the BMS Management Sellers will be subject to the provisions of Lock-in Deeds as further described at paragraph 4.4 below.

At Completion, Tranquil will acquire from GBHL its interests in Noble Venture Finance I, L.P. and BMS Equity Limited for an aggregate price of £442,050.

Completion of the BMS SPA is conditional upon, amongst other things:

§ approval of the Proposals by Shareholders at the General Meeting; and

§ the simultaneous Completion of the Sancus Gibraltar Acquisition.

Under the BMS SPA, Tranquil and the BMS Management Sellers have given certain warranties in favour of the Company covering matters including the ownership of their GBHL shares and the absence of any material change in the financial or trading position of GBHL. Subject to exceptions, these warranties are subject to financial limits such that the maximum liability of any seller is limited to the consideration received by it. The warranties are also subject to further customary limitations. The BMS Management Sellers shall be entitled to meet any claim for breach of warranty or otherwise under the BMS SPA by the transfer back to the Company of New Ordinary Shares received by them at their issue price.

Under the BMS SPA, Tranquil and the BMS Management Sellers havegiven certain undertakings in favour of the Company in respect of the period to Completion. These undertakings include to carry on the business of GBHL in the ordinary and usual course and not to, in respect of GBHL: make any distributions, make any payment other than routine payments, alter any share or loan capital or make or settle any claims, disputes or legal proceedings.

The Company and SGL have entered into a conditional share sale and purchase agreement by which, immediately following Completion, the entire issued share capital of GBHL and the loan notes issued by GBHL and held by the Company (as referred to at paragraph 2 above) will be transferred by the Company to SGL.

4.4 New Ordinary Shares to be issued as part of the consideration relating to the Acquisitions

Application will be made to admit 54,501,607 New Ordinary Shares to trading on AIM as soon as practicable following their issue. It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on or around 1 July 2016 (assuming Completion occurs on 30 June 2016).

The New Ordinary Shares, when issued, will be credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares and otherwise pari passuin all respects with the existing Ordinary Shares save that they will not be entitled to the dividends otherwise payable on the Ordinary Shares declared prior to 1 December 2016.

Under Lock-in Deeds between the Company and each of the Sancus Employee Sellers and each of the BMS Management Sellers, which are to be executed on or prior to Completion, each of them is to agree that, except in certain limited circumstances, he will not dispose of the New Ordinary Shares received by him at or in connection with Completion during the period of three years from Completion.

In addition, the Lock-in Deeds provide that if a Sancus Employee Seller or a BMS Management Seller ceases to be employed by the Group before the end of the aforementioned period and is deemed to be a bad leaver in accordance with the terms of the relevant Lock-in Deed, he will be required to transfer back to the Company (or as it may direct), in each case for an aggregate consideration of £1, a proportion of the New Ordinary Shares received by him at or in connection with Completion. This proportion is on a downwards sliding scale dependent on whether the Sancus Employee Seller or BMS Management Seller (as applicable) ceases employment with the Group prior to the first, second or third anniversary of Completion.

The Sancus Employee Sellers include Andrew Whelan (the Company's chief executive officer), John Davey (a director of SGL) and Stephen O'Brien (the managing director of Sancus Gibraltar). The BMS Management Sellers include Ewan Stradling (the chairman of BMS), Shane Lanigan (the managing director of BMS) and Martin Ling (a director of BMS).

The issue of the New Ordinary Shares implies pro forma net asset value dilution of approximately 2.7 pence per existing Ordinary Share (or 6.5 per cent.) based on the Company's most recently published quarterly net asset value update announced on 9 May 2016, falling to 1.8 pence (or 4.2 per cent.) on the assumption that the New Ordinary Shares receivable by SGL are transferred to the Company and taken into treasury (as referred to in paragraph 4.2 above). The Board believes that any dilutive effects of the issue of the New Ordinary Shares are more than offset by the strategic benefits that the Acquisitions will bring to the Group and potential for Shareholder value creation.

4.5 Bonds to be issued as part of the consideration relating to the Sancus Gibraltar Acquisition

The Bonds, issued in the aggregate principal amount of £10 million, will have a 5 year maturity expiring on 30 June 2021. The Company may repay the Bonds in full or in part prior to that date on at least one month's written notice to the relevant holder(s).Further, the holders of Bonds will have a right to call for the redemption of their Bonds upon the occurrence of certain change of control events of the Company, and the Bonds are mandatorily redeemed on a voluntary winding up of the Company (other than for a reorganisation, subject to conditions) or a sale of all or a substantial part of the Company's undertaking or assets. Standard events of default which could lead to the redemption of the Bonds also apply.Interest will accrue on the principal amount of the Bonds outstanding at a rate of 7 per cent. per annum and will be payable in arrears on 30 June and 31 December in each year until redemption.

The Company has agreed to use all reasonable commercial endeavours to procure, as soon as reasonably practicable following Completion:

§ the listing of the Bonds on the Cayman Islands Stock Exchange or such other recognised non-UK stock exchange as may be determined by the Company; and

§ that the Bonds are tradable via the UK Bond Network bond auction platform operated by UK Bond Network Limited, or a similar platform as may be determined by the Company.

4.6 Further Bond Issue via UK Bond Network

The Company also intends to make available further Bonds in an initial amount of up to £4 million, through UK Bond Network Limited (the 'UK Bond Network Issue') as agent for the Company, using its designated website auction platform. The net proceeds from the UK Bond Network Issue will be applied towards repayment of the Company's existing loan facility with Sancus (Jersey) Limited and other lenders (the 'Sancus Loan Facility'). The amount outstanding under the Sancus Loan Facility as at 13 May 2016(being the latest practicable date prior to publication of this announcement) was £14.86 million.

Only certain investors ('Eligible Investors') which may include high net worth, sophisticated, professional and institutional investors (in each case as defined in FSMA and regulations made under FSMA) will be eligible to participate in the UK Bond Network Issue. In order to participate in the UK Bond Network Bond Issue, Eligible Investors may be required to make certain representations and deliver certain self-certification documents to UK Bond Network Limited in accordance with its rules and as required under FSMA.

Eligible Investors who wish to access further details and participate in the UK Bond Network Issue will need to become a member of UK Bond Network's platform. Eligible Investors should initially register their interest at www.ukbondnetwork.com/GLIFinance. The Company's current intention is for the closing of the UK Bond Network Issue to coincide with the Completion of the Acquisitions on or around 30 June 2016. The Company will make a further announcement once the relevant offer documentation has been made available on the UK Bond Network platform.

The Company has a minority equity investment in UK Bond Network Limited.

5. Related party transactions

Overview

Sancus Gibraltar Holdings

Andrew Whelan (the Company's chief executive officer), John Davey (a director of SGL, a wholly owned subsidiary of the Company) and Geoffrey Miller (a former chief executive officer of the Company) each hold interests in the issued share capital of Sancus Gibraltar Holdings as follows:

Mr Whelan and Mr Davey are also directors of Sancus Gibraltar Holdings and Mr Miller is a former director of that company.

As described above, Sancus Gibraltar Holdings intends to transfer its holding of New Ordinary Shares and Bonds to the ordinary and preference shareholders in Sancus Gibraltar Holdings pro ratato their existing holdings following the end of the lock-in period.

In view of the interests of Mr Whelan, Mr Davey and Mr Miller in the capital of both companies, this will result in the transfer of New Ordinary Shares and Bonds as follows:

· Mr Whelan: 2,626,205 New Ordinary Shares and Bonds in a principal amount of £50,000;

· Mr Davey: 2,708,681 New Ordinary Shares and Bonds in a principal amount of £240,000; and

· Mr Miller: 868,167 New Ordinary Shares.

BMS

The Company holds 62.5 per cent of the issued ordinary share capital in GBHL, with the remaining ordinary shares held by Tranquil and the BMS Management Sellers as follows:

As described in paragraph 4.3 of this announcement, the Company will issue 3,697,749 New Ordinary Shares to each of the BMS Management Sellers in consideration for the sale of their ordinary shares in GBHL and will pay £482,950 in cash to (or on behalf of) Tranquil in consideration for the sale of its ordinary shares in GBHL.

Related party transaction

Each of Mr Whelan, Mr Davey, Mr Miller, Mr Stradling (including Tranquil as one of his connected parties), Mr Lanigan and Mr Ling is classified as a related party of the Company under Rule 13 of the AIM Rules by virtue of each individual's current or former directorship(s) of the Company and/or its subsidiaries.

Where an AIM company enters into a transaction above a certain size with a related party under the AIM Rules, the directors of the company (with the exception of any director that has an interest in the transaction) are required, after consulting with the company's nominated adviser, to state whether, in their opinion, the transaction is fair and reasonable insofar as its shareholders are concerned.

Whilst the issue of New Ordinary Shares and, where applicable, Bonds to each individual referred to above and the payment of cash to (and on behalf of) Tranquil (the 'Related Party Transactions') fall under the relevant de minimisthresholds under the AIM Rules, the Company wishes to apply the relevant provisions of the AIM Rules in any event.

The Directors consider, having consulted with the Company's nominated adviser, Panmure Gordon, that the terms of the Related Party Transactions are fair and reasonable insofar as Shareholders are concerned. Mr Whelan did not participate in the Board's consideration of the Related Party Transaction to which he is a party.

6. Extraordinary General Meeting

Resolution

Shareholders are being asked to approve the Proposals at the Extraordinary General Meeting. Accordingly, an ordinary resolution will be proposed at the Extraordinary General Meeting, requiring a simple majority of those members present (whether in person or by proxy) and voting, to vote in favour of it in order for it to be passed.

Circular

A notice convening an Extraordinary General Meeting of the Company, which is to be held at Sarnia House, Le Truchot, St Peter Port, Guernsey GY1 4NA at 10.30 a.m. on 6 June 2016, is set out at the end of the Circular to be sent to Shareholders. ZDP Shareholders will not (unless they also hold Ordinary Shares) be entitled to attend or vote at the Extraordinary General Meeting.

7. Recommendation

The Board believes that the Proposals are in the best interests of the Company and the Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the Extraordinary General Meeting.

The Directors intend to vote in favour, or procure the vote in favour, of the Resolution at the General Meeting in respect of their beneficial holdings of Shares which, in aggregate, amount to 4,416,575 Ordinary Shares representing approximately 1.92 per cent. of the Company's issued Ordinary Share capital.

EXPECTED TIMETABLE

2016

References to times above are to times in Guernsey unless otherwise stated.

The above times and/or dates may be subject to change and, in the event of such change, the revised times and/or dates will be notified to Shareholders by an announcement through a regulatory information service.