Galleon Holdings plc : Proposed Transaction, Loan Facility, Suspension to Trading

12 November 2013

("Galleon" or the "Company")

Galleon announces today that it is in advanced discussions and has reached agreement in principle with a consortium of sellers represented by Iron Extraction Corporation Hungary KFT ("Seller") regarding the potential acquisition ("Acquisition") of at least 85 per cent. of the issued share capital of Aktobe Steel Production LLP ("Aktobe") (the "Proposed Transaction"). If consummated, the Proposed Transaction will represent a reverse takeover under the AIM Rules and, accordingly, will be subject to, inter alia, shareholder approval at a general meeting.
Although legally binding heads of terms in relation to the Proposed Transaction have not been signed, the Company and the Seller have entered into a loan agreement (details of which are set out below) ("Loan"), pursuant to which the Seller will lend the Company up to £400,000 exclusively to fund costs relating to the Proposed Transaction.
Due to the use of funds to be drawn from the Loan being tied to the Proposed Transaction, the Company has requested the suspension of trading in its ordinary shares on AIM in accordance with AIM Rule 14, until such time as the Company publishes an admission document relating to the Proposed Transaction or otherwise ceases discussions with the Seller.

Under the terms of the Proposed Transaction, the Company has agreed in principle to acquire at least
85 per cent. of the entire issued share capital of Aktobe from the Seller. It is proposed that the consideration for the Acquisition be satisfied by way of issue of new ordinary shares in the Company. Aktobe's only material asset is its licence in respect of the Kokbulak iron ore deposit in the Aktyubinsk region of western Kazakhstan which is not being commercially exploited at present. For the purposes of the Proposed Transaction, Aktobe is valued at £438 million.

The Company has entered into the Loan with the Seller, pursuant to which the Seller has agreed to extend a loan of up to £400,000 to the Company for the sole purpose of funding transaction costs relating to the Proposed Transaction.
Under the terms of the Loan, which is for a term of 12 months from 11 November 2013, funds shall be made available to the Company in two tranches and interest shall accrue at LIBOR plus 5% and shall be repayable, together with the principal amount, upon expiry of the term.

Pursuant to the Loan and the ongoing discussions regarding the Proposed Transaction, the Company has requested a suspension to trading in its ordinary shares on AIM pursuant to AIM Rule 14 until either (i) the AIM admission document referred to above is published; or (ii) discussions regarding the Proposed Transaction cease.
Further announcements will be made in due course as appropriate.

Enquiries

Galleon Holdings pie

Ashar Qureshi +44 20 7529 3737

Nominated Adviser

Cairn Financial Advisers LLP James Caithie l Avi Robinson

+44 20 7148 7900

distributed by