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SALTUS EUROPEAN DEBT STRATEGIES LIMITED

(Registered in Guernsey - Number 46912)

Registered Office:

 2ND FLOOR, REGENCY COURT, GLATEGNY ESPLANADE, 

ST. PETER PORT, GUERNSEY, GY1 3NQ

___________________________

TELEPHONE: + 44 1481 720321

FACSIMILE: + 44 1481 716117

e-mail:  Funds@bfmgl.gg

For immediate release

27 August 2009

Results of Shareholder Consultation and Update on Winding up Plans

In December 2008 the Board announced restructuring proposals for Saltus European Debt Strategies Limited ('SEDS'). These were subsequently put on hold due to the level of the Company's borrowings, the reduction of which was hampered by the suspension of redemptions by several underlying funds in which SEDS was invested. This in turn led to the Company's borrowings exceeding its bank facility.

The purpose of this announcement is to provide further details on the future winding-up of the Company, as well as to provide an update on the Company's gearing position.

Shareholder Consultation Exercise re Winding Up

We have engaged in a consultation exercise with our major shareholders in relation to the manner in which we expect to complete the winding up of the Company. This exercise has involved speaking to our 9 largest shareholders, accounting for in excess of 78% of the Company's issued share capital.  All of these shareholders we spoke to expressed support for the key elements of the proposals contained in this announcement. 

Based on this consultation exercise, we have decided upon the following course of action:

• to propose a winding up vote at the annual general meeting of the Company held in respect of the year ending 31 December 2011;

• in the mean time, to manage the portfolio in such a way as to facilitate a prompt return of capital to shareholders assuming that this vote is be passed;

• to stop hedging the Company's currency exposures; and

• to utilise a portion of any surplus cash for resuming the Company's share buyback programme.

Further details on Winding-up

The Board remains committed to winding-up the Company in light of the persistently wide share price discount to net asset value and its small market capitalisation.  However, the Board also recognises that a significant proportion of the Company's investments have suspended redemptions or do not otherwise provide near term liquidity.  This liquidity profile means that the earliest practical opportunity to wind the Company up will be after 31 December 2011.  The Board anticipates that, unless shareholders vote to the contrary at the time, the Company will be wound up following the 2011 vote and intends to manage the Company's assets in the interim accordingly.

Update regarding the Company's gearing

The Company's borrowings (including unrealised foreign exchange losses), which stood at £15.6 million as at 31 December 2008, had been reduced to £6.6 million (excluding unrealised foreign exchange gains) as at 30 June 2009.  Since that date the borrowings have been paid off in full, and the Company now has a small net cash position.

Reasons for the cessation of hedging policy

In the light of the increased volatility of currency markets, together with significantly diminished portfolio liquidity and the resultant reduction in availability of credit lines, the Board has decided that it is no longer prudent to continue to hedge the Company's foreign exchange exposures.  The Company will publish its estimated foreign currency exposures monthly together with the net asset value.

Enquiries

Saltus Partners LLP            

Jon Macintosh                    020 7290 9400

Kepler Partners             

Hugh van Cutsem             020 7297 5283

        

Cenkos Securities plc

Will Rogers                        020 7397 8900

Dion Di Miceli

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