Cellcast News

Proposed Placing of 16,040,384 Placing Shares at 8 pence per share

31st August 2006

The Board announces that the Company has agreed terms for a placing of 16,040,384 new Ordinary Shares in order to raise approximately £1.3 million (before expenses) at a Placing Price of 8 pence per new Ordinary Share. The Company is also today announcing its interim results for the six months ended 30 June 2006.

In order for the Placing to be effected, it is necessary to seek Shareholders’ approval to authorise the Directors to allot the Placing Shares pursuant to the Placing at an Extraordinary General Meeting of the Company which is being convened for 10 a.m. on 25 September 2006. This announcement sets out the details of and the reasons for the Placing.

Reasons for the Placing and Use of Proceeds

Without the proceeds of the Placing, the Company is unlikely to have adequate working capital and thus, were it not to proceed, the Directors would have to consider a liquidation of the Company which would be unlikely to provide any return to Shareholders. The Directors are of the opinion that, having made due and careful enquiry and after taking into account the net proceeds of the Placing to be received by the Company, the working capital available to the Group will, on Admission, be sufficient for its present requirements, that is for at least 12 months from Admission.

The net proceeds of the Placing of approximately £1.2 million will be used to allow the Company to continue with the roll-out of its international development programme following a period when the Company has seen a significant depletion of working capital following operating losses which the Directors believe have in part been caused by a reorganisation of Sky’s Electronic Programming Guide. The Company’s current focus is on overseas opportunities, and it is important that these are not frustrated by lack of resources.

Details of the Placing

On behalf of and as agents for the Company and pursuant to the terms and conditions of the Placing Agreement, Daniel Stewart and HB have conditionally agreed to use their reasonable endeavours to place 16,040,384 new Ordinary Shares with institutional and other investors at a price of 8 pence per Placing Share, to raise approximately £1.3 million before expenses. The Placing is conditional, inter alia, on the passing of the necessary Resolution at the EGM and Admission taking place by 26 September 2006 or such later time, being not later than 24 October 2006, as the Company, Daniel Stewart and HB may agree. The Placing is not being underwritten.

Andrew Wilson (Chief Executive Officer) and Bertrand Folliet (Chief Operating Officer) have agreed to subscribe for an aggregate of 3,125,000 Ordinary Shares pursuant to the Placing through Harkness Trading Limited, a company they beneficially own.

Certain institutional investors in the Company have indicated a desire to realise their shareholdings and HB has agreed to purchase these holdings, being in aggregate 1,643,666 Ordinary Shares at the Placing Price conditional, inter alia, on Admission.

On Admission, the Directors (and persons associated with them in accordance with the AIM Rules), will hold, in aggregate, approximately 9,278,397 Ordinary Shares representing 20.9 per cent. of the Enlarged Issued Share Capital.

The Placing Shares, once issued, will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions thereafter declared, made or paid. The Placing Shares are expected to be admitted to trading on AIM on 26 September 2006.

Fair and Reasonable Opinion

Harkness Trading Limited, which is beneficially owned by Andrew Wilson and Bertrand Folliet, has agreed to make a loan available to the Company of up to £200,000 pending completion of the Placing. No interest will be payable on the loan which will be repaid to Harkness Trading Limited out of the proceeds of the Placing.

The Directors, other than Andrew Wilson and Bertrand Folliet (given their interest in Harkness Trading Limited), having consulted with the Company’s nominated adviser, consider that the terms of the loan by Harkness Trading Limited and the issue, pursuant to the Placing, of new Ordinary Shares to Harkness Trading Limited are fair and reasonable insofar as Shareholders are concerned.

Expected timetable of events

Latest time and date for receipt of Forms of Proxy	10 a.m. on 23 September 2006
Extraordinary General Meeting	10 a.m. on 25 September 2006
Dealings in Placing Shares commence on AIM and CREST accounts credited in respect of the Placing Shares to be held in uncertified form	26 September 2006
Despatch of definitive share certificates in respect of the Placing Shares to be held in certified form	By 3 October 2006

For further information:

Cellcast plc
Andrew Wilson, CEO	Tel: +44 (0) 20 7190 0300
andrew@cellcast.tv
Daniel Stewart & Company Plc
Lindsay Mair, Corporate Finance	Tel: +44 (0) 20 7776 6550
lindsay.mair@danielstewart.co.uk	www.danielstewart.co.uk

Media enquiries:

Abchurch
Henry Harrison-Topham / Gareth Mead	Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com	www.abchurch-group.com

 

Definitions

The following definitions apply throughout this announcement unless the context requires otherwise:

“Admission”	the effective admission of the Placing Shares to trading on AIM
“AIM”	the market of that name operated by the London Stock Exchange
“Circular”	the circular to Shareholders dated 31 August 2006 containing the Notice of EGM
“Company” or “Cellcast”	Cellcast plc
“Daniel Stewart”	Daniel Stewart & Company Plc, the Company’s nominated adviser and broker
“Directors” or “Board”	the directors of the Company or any authorised committee thereof
“Extraordinary General Meeting” or “EGM”	the Extraordinary General Meeting of the Company to be held at 10 a.m. on 25 September 2006, notice of which is set out in the Circular
“Enlarged Issued Share Capital”	the issued share capital of the Company as enlarged by the issue of the Placing Shares
“Existing Ordinary Shares”	the 28,346,911 existing Ordinary Shares comprising the total issued share capital of the Company
“Group”	the Company and its subsidiaries
“HB”	HB Corporate (a trading division of Hoodless Brennan plc)
“ London Stock Exchange”	London Stock Exchange Plc
“Notice of EGM”	the notice of EGM which is set out at the end of the Circular
“Ordinary Shares”	ordinary shares of 3 p each in the capital of the Company
“Placing Agreement”	the conditional placing agreement dated 31 August 2006 between Daniel Stewart (1), HB (2), and the Company (3) relating to the Placing
“Placing Price”	8 pence per Placing Share
“Placing Shares”	16,040,384 new Ordinary Shares to be issued pursuant to the Placing
“Placing”	the conditional placing by Daniel Stewart and HB, as agents for the Company, of the Placing Shares at the Placing Price per share
“Resolution”	the Shareholders’ resolution set out in the Notice of EGM
“Shareholders”	holders of the Existing Ordinary Shares