Moneyextra Sharedealing



Hurlingham Plc (the 'Company')

Update on position with regard to trading in the Ordinary Shares of the Company on the

Alternative Investment Market and recommended proposals in relation to a reduction of

capital by way of cancellation of the Company's entire class of 'A' Shares

Update on position with regard to trading in the Ordinary Shares of the Company on AIM

The circular to Shareholders of the Company dated 14 March 2008 stated that a continuation of trading in the Company's Ordinary Shares on the Alternative Investment Market was subject to the Company acquiring a new business within twelve months from disposal of its subsidiary Bettagrade Limited, which took place on 31 March 2008. It is now clear that an AIM qualifying acquisition of a new business by the Company will not be effected by 31 March 2009. Under the AIM Rules for companies, if an Investing Company (often referred to as a cash shell) such as Hurlingham does not complete an AIM qualifying acquisition within twelve months of becoming an Investing Company, trading in the Ordinary Shares will be suspended by the London Stock Exchange. The suspension can be effective for up to six months. If during that six month period the Company completes an AIM qualifying acquisition, the Ordinary Shares may be restored to trading. If six months passes and an AIM qualifying acquisition has not been achieved, trading in the Ordinary Shares of the Company would then be cancelled from AIM.

Since 31 March 2008, the Directors have considered proposals from a number of companies with a view to their acquisition by Hurlingham. Some were of material interest and appeared, at the time, likely to enhance Shareholder value. However, the onset of virtually unprecedented market conditions confirmed to the Directors that the risks associated with these proposed acquisitions could not be justified in this current economic climate. The Directors are continuing to seek acquisitions on more favourable terms than those that prevailed during 2008 and hope to submit a proposal to Shareholders ahead of the 30 September 2009 deadline. However, the Directors consider that the probability of a suspension of trading in the Company's Ordinary Shares after 31 March 2009 and the requirement to seek Shareholders' approval and the sanction of the High Court to the proposed reduction of capital referred to in the circular to be sent to shareholders today, renders it appropriate to advise Shareholders of this fact now. The Directors regret any inconvenience to Shareholders as a consequence of any suspension and propose to request resumption of trading in the Ordinary Shares on the Alternative Investment Market if and when an appropriate acquisition has been completed.

The Directors remain committed to identifying a suitable business or company for Hurlingham to acquire but they will only proceed with such a transaction if they are convinced it will add value and improve Shareholder prospects. The Directors will continue to be cautious in this severely adverse financial climate. In the meantime, the Directors are continuing to retain the Company's assets in cash balances earning market rates of interest, which they consider is currently an appropriate way to preserve Shareholders' value against the current economic backdrop.

Shareholders should be aware that if Hurlingham does not complete an AIM qualifying acquisition by 30 September 2009, the Company's AIM admission would be cancelled. If the Ordinary Shares are suspended after 31 March 2009 and/or cancelled from AIM for this reason, this would result in Shareholders being unable to sell their Ordinary Shares on a market exchange and transactions in Ordinary Shares would typically be performed by Shareholders on a matched bargain basis.

The acquisition of a trading business by Hurlingham at the current time or during a suspended period would normally require the Company to produce a new AIM Admission Document (in the same way as a new introduction to AIM) so from a practical perspective this process should be similar whether or not the Company has an AIM quotation, or trading in its Ordinary Shares is suspended or cancelled at that time.

The investment strategy of the Company continues to involve the AIM qualifying acquisition by Hurlingham of another business, whose activities are likely to be different from those previously undertaken by the Company up to the date of its disposal of Bettagrade in March 2008. Any such acquisition will involve an AIM Admission Document being sent to Shareholders setting out the proposed terms of the acquisition, providing financial details relating thereto and inviting Shareholders to consider and if thought fit, approve the proposals prior to the acquisition of any such company or business by the Company.

Shareholders should be aware that for the reasons referred to above, trading in the Company's Ordinary Shares on the Alternative Investment Market is liable to be suspended by the Stock Exchange on or after 31 March 2009 without further notification to Shareholders, until an AIM qualifying acquisition has been completed. However, if suspension does take place, an announcement to this effect will be made by the Company to the market.  

Background to the proposed resolutions

The Board further regrets the necessity to convene this General Meeting to rectify an error made by the Company in 2008 with regard to the Companies Act. The Meeting has been called to consider and if thought fit, to pass the two Special Resolutions referred to below.

As part of the approval by Shareholders of the first resolution at the general meeting of the Company held on 31 March 2008, the Company was authorised by Shareholders to acquire 100 'A' Shares in its capital in exchange for 330,000 5% Preference Shares of £1 in the capital of Bettagrade Limited. The Company subsequently purported to acquire the 'A' Shares in accordance with the resolutions passed. However, the acquisition of 'A' Shares in this manner was invalid because the Company did not have adequate distributable reserves and in fact had a deficit on its profit and loss account at 31 March 2008. The Company continues to have a deficit on its distributable profit and loss account reserves of approximately £672,000 at the date of this announcement.

The passing of Resolution 1 at the General Meeting on 2 April 2009 will permit the Company to seek the sanction of the High Court to a reduction of capital by way of cancellation of 100 'A' Shares in its capital on terms that the holder of the 'A' Shares has received in substitution and consideration for the 'A' Shares so cancelled, 330,000 5% preference shares of £1 each in the capital of Bettagrade Limited. In the event that the Court sanctions the reduction of capital specified in Resolution 1, the Company's capital will be reduced and the Company will be permitted lawfully to cancel all of its 'A' Shares. This will have equivalent effect to the transaction originally approved by Shareholders on 31 March 2008.

Resolution 2 is a consequential alteration of the Articles of Association of the Company to state that all of the 'A' Shares have been cancelled and that the share capital of the Company will consist solely of Ordinary shares of 75p each. 

The existing Board accepts responsibility for the error made by the Company in March 2008.

If the sanction of the High Court is withheld, the existing Directors will as soon as practicable thereafter convene a further general meeting to determine the future of the Company.

Net assets of the Company

At 31 March 2008, the Company had a negative balance on its profit and loss account reserve of £682,000 as set out in the Half-Yearly Financial Report issued by the Company to Shareholders on 30 June 2008. At the same date it had pro-forma equity shareholders' funds attributable to Ordinary Shareholders of £1,830,000, being 63p per Ordinary Share.

The net cost expected to be incurred by the Company in dealing with the matters referred to in this announcement is estimated by the existing Board to amount to approximately £30,000. Other than the net surplus of £10,000 forecast by the existing Board to have been earned by the Company in addition to the pro-forma results referred to above in the six months ended 30 September 2008, equity shareholders' funds attributable to Ordinary Shareholders are not expected by the existing Board to be materially different from the position revealed by the Half-Yearly Financial Report.

General Meeting 

The General Meeting of the Company is to be held at 33 Cavendish Square, London W1AG 0PW, on 2 April 2009 commencing at 1.30 p.m. At the General Meeting, the following resolutions dealing with matters referred to in this announcement will be proposed:

Resolution 1

A special resolution to reduce the capital of the Company by authorising acquisition and cancellation of 100 'A' Shares on terms that the holder of the 'A' Shares has received in substitution and consideration for the 'A' Shares so cancelled, 330,000 5% Preference Shares of £1 each in the capital of Bettagrade Limited.

Resolution 2

A special resolution to alter the Articles of Association of the Company to state its capital is as reduced by Resolution 1.

Circular to Shareholders

The Company will today post a circular to shareholders to convene the General Meeting which is to be held at 33 Cavendish Square, London, W1AG 0PW at 1.30 p.m. on 2 April 2009. 

A copy of the circular is available from the Company's website at www.hurlinghamplc.co.uk.

Enquiries:

Hurlingham Plc                                                       Tel: 020 7706 2121

Andrew Blurton

Teathers                                                                 Tel: 020 7426 9000

Nominated Adviser

Jeff Keating / Simon Brown

DEFINITIONS