Refinancing arrangements

RNS Number:1301M
Centurion Electronics PLC
18 January 2008

18 January 2008



Centurion Electronics plc ("Centurion" or the "Company")



Refinancing arrangements



Introduction



The Company is pleased to confirm that, as previously announced, it is in the
final stages of documenting an agreement to inject further funding into the
Company.  This  funding will be provided by a new facility in the amount of up
to �1,500,000 from Lloyds TSB.  In addition a further �750,000 will be provided
by Ravensworth International Limited ("Ravensworth").



Ravensworth currently owns some 9.6 per cent of the existing issued share
capital of the Company and �2,000,000 loan notes which upon conversion would
represent some 51.9 per cent of the then enlarged share capital. Ravensworth is
also owed �250,000 under a working capital facility. Given Ravensworth's
shareholding. the proposed investment by Ravensworth falls to be treated as a
related party transaction under the AIM Rules and therefore requires a fairness
opinion from the independent directors.



The Company expects to conclude the new financing and security arrangements with
 Ravensworth (the "Ravensworth Proposals") by 25 January 2008. The Ravensworth
Proposals require, among other matters, the approval of shareholders to an
increase of authorised share capital and disapplication of pre-emption rights.
In view of the Company's urgent need for funds it is intended to convene an
appropriate Extraordinary General Meeting of the Company for this purpose in the
near future.



Terms of the refinancing



Lloyds TSB has agreed to provide a facility of �1,500,000 subject to Centurion
raising a further �750,000. A further requirement to accept the funding offer
from Lloyds TSB is that they take a first charge over the Company's assets.  At
present Ravensworth have a first charge over the Company's assets.



Ravensworth have agreed to invest a further �750,000 by way of a new convertible
loan note which would carry an interest rate of 10 per cent per annum and have a
two year life during which at any time Ravensworth could elect to convert the
loan note into Centurion shares at a price of 0.5 pence per share.



Ravensworth have made this additional investment conditional upon the
replacement of their existing �2,000,000 convertible loan notes and �250,000
working capital facility with new convertible loan notes carrying the same terms
as will apply to the loan notes to be issued.



The impact of this is that, assuming Ravensworth's new loan note is exercised in
full, Ravensworth would own shares representing some 97 per cent of the then
enlarged share capital.



Ravensworth have informed the Independent Directors that they are only willingly
to provide the additional financing and release their first charge on the
Company's assets, which will enable the Lloyds TSB trade finance agreement to be
enacted on the basis of the company agreeing to the terms of the Ravensworth
proposal as set out above.



Commercial assessment



The independent directors have undertaken a thorough review of the Company's
options to maximise shareholder value and have come to the conclusion that none
of these would deliver more value than the Ravensworth Proposals.



The Company currently has sufficient funding to continue to trade for the next
seven days.  Accordingly, despite the fact that the terms of the Ravensworth
Proposals may result in Ravensworth being in a position to very substantially
dilute the existing equity in the Company the alternative is a cessation of
trading which the Independent Directors believe is likely to result in a
complete loss of value for existing shareholders.



In recognition of the above the Independent Directors believe that accepting the
Ravensworth Proposals is the best option available to shareholders, as no other
alternatives are available. Accordingly the Independent Directors, who have
consulted with Centurion's Nominated Adviser, believe the Ravensworth Proposals
to be fair and reasonable.



Next steps



Centurion, Ravensworth and Lloyds TSB are continuing to work on finalising the
documentation required to implement the refinancing proposal referred to above.
The Independent Directors of Centurion expect these to be completed and ready
for signing by 25th January 2008. In the event this slips a further announcement
will be made.



In the event this does not result a completed transaction it is likely that the
Company would have insufficient funds to continue to trade.



AIM Quotation



As previously announced Centurion's shares will be suspended from trading on AIM
from Monday 21 January 2008 following the departure of the Company's nominated
adviser JMFinn Capital Markets Limited. If the Company does not appoint a new
nominated adviser by 20 February 2008 Centurions quotation on AIM will be
cancelled at 7am on 21 February 2008.



Centurion has approached a number of potential new nominated advisers and has
discussions ongoing. However, if none of these discussions lead to an
appointment  shareholders should be aware that it would not be possible for
Centurion to remain on AIM beyond 20 February 2008.



Contacts

Centurion Electronics plc
Chris Rhodes Chief Executive             01707 386600

JMFinn Capital markets Limited
Clive Carver                             0207 600 1658


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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