Agreement for the Subscription for New Shares

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

31 January 2020

ST. JAMES HOUSE PLC

 ("SJH", the "Group" or the "Company")

Agreement for the Subscription for New Shares

The Board of Directors of the Company (the "Board") is pleased to announce it has entered into a binding agreement for the subscription for 1.666,667 ordinary shares of 1p each in the capital of the Company ("Ordinary Shares") at a price of 30 pence per Ordinary Share (the "Transaction Price") to raise a total of £500,000 (the "Subscription").  The Subscription will be made by Auxilum Investere SJ Ltd, a UK company controlled by Michael and Linda Peters ("AIS") that has been established for this purpose. 

The Subscription Shares may be issued under authorities granted at the Company's annual general meeting held on 31 July 2019, however it is also the intention of the Board to settle £237,500 of outstanding liabilities through an issue of a further 791,667 Ordinary Shares at the Transaction Price (the "Capitalisation Shares"), for which the current share issue authorities are insufficient, so the Board will shortly publish a notice of general meeting (the "Notice") to be held during February in order to grant the Board additional authorities to issue Ordinary Shares (the "GM").  A further announcement will be made shortly to provide details of the GM.

AIS will on completion of the Subscription hold 29.9 per cent of the issued Ordinary Shares (the "Subscription Shares"), as enlarged by the Subscription and the proposed issue of the Capitalisation Shares.  In the event that the resolutions proposed at the GM are not approved by shareholders, the Subscription will be scaled back so as to be less than 30 per cent of the issued Ordinary Shares as can be achieved within the existing share authorities, further details of which will be set out in the Notice.  AIS has contracted to pay the full amount of the Subscription (subject to any adjustment relating to the GM result) within 30 days, with additional surety of payment received from Mr Peters personally, at which time the Subscription will complete.

The Subscription Shares will not be issued until after the GM and full payment has been received, at which point an application will be made to admit the Subscription Shares to trading on AIM. 

Subject to completion of the Subscription, AIS will also receive options over 504,164 Ordinary Shares, exercisable at the Transaction Price at any date up to 31 January 2025 (the "Options").  AIS have agreed that they will maintain their holding below 30 per cent of the voting rights of the Company at all times (other than in situations involving insolvency or an offer for the Company).  Authorities to issue Ordinary Shares under the Options will also be sought to the GM.

Subject to completion of the Subscription, the Company has agreed with AIS that it will have the right to appoint two members to the Board for as long as AIS holds at least 25 per cent of the issued Ordinary Shares of the Company, subject to the normal requirements for an AIM-quoted company.  It is anticipated that AIS will initially seek to appoint one director, and this is expected to take place during 1Q2020.

Chief Executive Graeme Paton commented, "'This incoming investment, along with the general improvements across the business that we outlined in yesterday's trading update means that our working capital position is significantly improving.  Having overcome the challenges of the last few years, collectively, we believe the year ahead will see much progress."

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