Block Shield Corporation plc

('Block Shield' or 'the Group')

Sale of business assets of EMC products division

Block Shield announces that it has completed the sale of the business assets of its electromagnetic compatibility ('EMC') products division in Sugar Grove, Illinois USA, to Deep Coat LLC ('Deep Coat') which is owned by a former employee of the EMC products division. The EMC products division has a range of shielding solutions and metallization services for customers to deal with Electromagnetic Interference, Radio Frequency Interference and Electrostatic Discharge. 

The Board believes that the sale of the EMC products division is in the best interest of the Company's shareholders as the division was not able to reach breakeven on a fully allocated cost basis. The disposal is in line with the Group's intentions, following completion of a strategic review as announced on 26 November 2008, to either dispose of or close, the EMC products division in order to focus on the more promising near-term RFID product portfolio.

Deep Coat will assume all assets and liabilities of the EMC products division, including a building lease obligation of US $0.4 million, and will undertake the completion of the current purchase orders. No consideration will be received by Block Shield.

The EMC products division achieved a negative total gross margin of about US$ (0.1) million in the 10 months ended 31 December 2008 on revenue of US $1.6 million (unaudited). The division had gross assets of US $2.3 million (unaudited) as at 31 December 2008 and its net assets were about US$ 0.1 million (unaudited) at the same date after impairment of intangibles and write downs. The Group will likely realize a loss on the disposal of US $1.4 million in the financial year to 28 February 2009.

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