London Capital : Further re proposed cancellation of trading on AIM

8 January 2018

London Capital Group Plc

('London Capital Group' or the 'Company')

Further re. proposed cancellation of admission to trading on AIM

Notice of General Meeting

As previously announced on 22 December 2017, following discussions with representatives of the Company's largest shareholder, GLIO Holdings Limited ('GLIO Holdings'), the Company has decided to seek shareholder approval to cancel trading in its ordinary shares on AIM (the 'Cancellation').

The Company will shorty post to its shareholders a circular (the 'Circular') in connection with the Cancellation containing a notice convening a general meeting of the Company (the 'General Meeting') to be held at 10.30 a.m. on 6 February 2018 at the Company's offices, 77 Grosvenor Street, Mayfair, London, W1K 3JR. Cancellation will be conditional on the consent of not less than 75 per cent. of votes cast by shareholders in person or by proxy. Shareholders should note that GLIO Holdings owns 78.14 per cent. of the Company's issued share capital. GLIO has indicated to the Board of the Company that it intends to vote in favour of the cancellation of trading in the Company's shares on AIM.

The Directors (other than the directors who are independent of GLIO Holdings, being Frank Chapman and Nicholas Lee) believe that the proposed Cancellation is in the best interests of the Company and its Shareholders as a whole.

The above summary should be read in conjunction with the full text of this announcement and the Circular. Extracts from the Circular, which sets out the background to and reasons for the Company seeking Cancellation, are set out below and a copy of the Circular will shortly be available on the Company's website,www.ir.lcg.com.

Defined terms used in this announcement have the meaning set out at the end of this announcement and as in the Circular.

For further information:

Enquiries:

EXTRACTS FROM THE CIRCULAR

The following has been extracted without amendment from, and should be read in conjunction with, the Circular to Shareholders dated 8 January 2018, which will be available shortly from the Company's website:www.ir.lcg.com.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
(All times shall be London local time unless otherwise indicated below)

Each of the times and dates set out in the above timetable and mentioned in this announcement are subject to change by the Company in which event details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement.

References to times in this document are to London times unless otherwise stated.

The Cancellation requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the General meeting.

LETTER FROM THE CHAIRMAN

Proposed cancellation of admission of the Ordinary Shares to trading on AIM

And

Notice of General Meeting

Following discussions with representatives of GLIO Holdings, its major shareholder, the Company has decided to seek shareholder approval to cancel the admission of the Ordinary Shares to trading on AIM and for the Ordinary Shares to be admitted solely to trading on the NEX Exchange.

Accordingly, a General Meeting is being convened in order to put a special resolution to Shareholders to approve the cancellation of the admission of the Ordinary Shares to trading on AIM. Cancellation is conditional upon the consent of not less than 75 per cent. of votes cast by Shareholders (in person or by proxy) at the General Meeting.

Shareholders should note that GLIO Holdings, the Company's largest shareholder, has an interest in 78.14 per cent. of the Ordinary Shares. GLIO Holdings has indicated that it intends to vote in favour of the Resolution as it has decided that the NEX Exchange would be a more appropriate market for the Ordinary Shares to be traded on.

The purpose of this document is to provide you with information about the background to and the reasons for Cancellation, and to recommend that you vote in favour of the Resolution to be proposed at the General Meeting, notice of which is set out at the end of this document.

The Non-Executive Directors independent of GLIO Holdings, being Frank Chapman and Nicholas Lee, are not recommending that Shareholders vote in favour of the Resolution and their reasons for this are set out in the 'Recommendation' paragraph below.

Rationale for Cancellation

The rationale given by GLIO Holdings for seeking the Cancellation is as follows:

· the costs associated with maintaining admission of the Ordinary Shares to trading on AIM (including professional, legal, accounting, broker and nominated adviser costs and fees of the London Stock Exchange) are now disproportionate to the value provided by Admission; and

· like certain other small companies whose shares are admitted to trading on AIM, AIM only provides the Company with very limited liquidity which is exacerbated by the Company's small free float.

In light of the above, it has been concluded by GLIO Holdings that the NEX Exchange would be a more appropriate market for the Ordinary Shares to trade on and would enable shareholders to continue to trade their Ordinary Shares.

Process for and principal effects of Cancellation

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the proposed Cancellation.

Under the AIM Rules, Cancellation is conditional on the requisite majority of Shareholders voting in favour of the Resolution at the General Meeting (being not less than 75 per cent. of the votes cast). Accordingly, the Resolution set out in the 'Notice' seeks Shareholders' approval for the Cancellation. Subject to the Resolution approving the Cancellation being passed at the General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will cease at the close of business on 13 February 2018 with Cancellation taking effect at 7:30 a.m. on 14 February 2018.

Upon Cancellation becoming effective, Allenby Capital Limited will cease to act as nominated adviser to the Company and the Company will no longer be required to comply with the rules and corporate governance requirements to which companies whose issued share capital is admitted to trading on AIM are subject to, including the AIM Rules. Shareholders should note that, the Company will in certain circumstances remain subject to the provisions of the City Code, for as long as GLIO Holdings owns more than 50 per cent. of the Ordinary Shares, it is able to acquire further Ordinary Shares without the requirement to make an offer for all the Ordinary Shares.

Admission to the NEX Market

The Ordinary Shares were admitted to trading on the NEX Exchange on 14 December 2017.

NEX Exchange is a Recognised Investment Exchange aimed at small to medium enterprises. The market provides a cost-effective destination for smaller growing companies who require capital to support their growth.

The Ordinary Shares will continue to be settled through CREST and existing share certificates will remain valid.

Risks associated with retaining an interest in the Company following the Cancellation

Shareholders' attention is drawn to the following factors which should be taken into consideration in assessing how to vote on the Resolution and whether or not to retain their interests in Ordinary Shares in the event that Cancellation is approved by the Shareholders and becomes effective:

· the Company will no longer be subject to the AIM Rules and Shareholders will only be able to rely on the protections afforded to shareholders under applicable English law, the City Code and the NEX Rules;

· the levels of disclosure and corporate governance which the Company may adopt going forward under the NEX Rules may be less stringent than those for a company whose shares are admitted to trading on AIM; the Company will no longer benefit from the current relationship agreement between it and GLIO Holdings, although the Company and GLIO Holdings may, under the NEX Rules, adopt an alternative relationship agreement. No such agreement is currently being contemplated. The current relationship agreement governs the relationship between the Company and its major shareholder and, in particular, has a requirement for the Company to maintain a certain number of independent directors; and

• there may be personal tax consequences for Shareholders. If you are in any doubt about your tax position, and/or are subject to tax in a jurisdiction other than the UK, you should consult an appropriate independent professional adviser.

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact on them of Cancellation.

The General Meeting

Set out at the end of this document is a notice convening the General Meeting, to be held on at the offices of the Company at 77 Grosvenor Street, Mayfair, London, W1K 3JR, on 6 February 2018 at 10:30 a.m., at which the Resolution will be proposed.

The Resolution, which will be proposed as a special resolution, is to approve the Cancellation.

Action to be taken

A Form of Proxy for use by Shareholders at the General Meeting is appended at the end of this document. Whether or not you intend to attend the General Meeting, you are requested to complete and sign the Form of Proxy in accordance with the instructions printed thereon and to return it to the Company's registrar, Link Asset Services Limited, PXS1, 34 Beckenham Road, Beckenham BR3 4ZF as soon as possible, but in any event so as to be received by no later than 10:30 a.m. on 4 February 2018. The completion and return of a Form of Proxy will not preclude Shareholders from attending the General Meeting and voting in person should they so wish.

Recommendation

For the reasons set out above, the Directors (other than the directors who are independent of GLIO Holdings, being Frank Chapman and Nicholas Lee) believe that the proposed Cancellation is in the best interests of the Company and its Shareholders as a whole.

Frank Chapman and Nicholas Lee believe that Cancellation may reduce liquidity in the trading of the Ordinary Shares as there will be fewer market makers making a market in the Ordinary Shares. They also believe that it is likely that Cancellation will reduce the level of protection afforded to Shareholders which currently exists under the AIM Rules and the current relationship agreement between the Company and GLIO Holdings.

The Directors (other than Frank Chapman and Nicholas Lee) unanimously recommend that Shareholders vote in favour of the Resolution at the General Meeting as they intend to do in respect of their own beneficial holdings amounting to, in aggregate, 7,800,000 Ordinary Shares representing approximately 2.06 per cent. of the total voting rights of the Company.

Yours faithfully

Charles Poncet

Non-executive Chairman

DEFINITIONS