FRM Formation Grp

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR").

FORMATION GROUP PLC

('Formation' or the 'Company')

GBP10 million Subscription and GBP10 million Loan Facility

Formation is pleased to announce that it has raised GBP10 million, before expenses, by way of a subscription for 129,696,977 new Ordinary Shares ("Subscription Shares") at a price of 7.71 pence per Subscription Share (the “Subscription"). The Company has also secured a loan facility to provide additional funding of up to GBP10 million.

Subscription

The issue of the Subscription Shares is to be effected by way of a cashbox subscription. The Company will allot and issue the Subscription Shares on a non-pre-emptive basis to Zandra Holdings Limited in consideration for the transfer by Zandra Holdings Limited of the entire issued share capital of Market Equities Limited to the Company. Accordingly, instead of receiving cash as consideration for the issue of Subscription Shares, at the conclusion of the Subscription the Company will own the entire issued share capital of Market Equities Limited, whose sole asset is its cash reserve, which comprise GBP10 million, which are to be distributed to the Company. Zandra Holdings Limited and Market Equities Limited are entities ultimately owned and controlled by the Kennedy Private Trust Company Limited, as Trustee of the Kennedy Family Discretionary Settlement.

The proceeds of the Subscription will be used by the Company and its subsidiaries for the acquisition or development of property within the UK, the Irish Republic and Portugal.

The Subscription is not a rights issue or open offer and the Subscription Shares will not be offered generally to shareholders on a pre-emptive basis.  The Directors believe that the extra cost and delay involved in a rights issue or open offer would not be in the best interests of the Company in the circumstances and, accordingly, the Board considers that it is in the best interests of the Company and shareholders as a whole for the funds to be raised through the Subscription.

The Subscription Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of 5 pence each in the capital of the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Subscription Shares.

Application will be made for the Subscription Shares to be admitted to trading on the NEX Exchange and admission is expected to become effective on or around 6 June 2019.

Following the issue of the Subscription Shares, the Company has a total of 173,800,000 Ordinary Shares in issue which carry voting rights.

The figure of 173,800,000 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

As a result of the Subscription, the Kennedy Private Trust Company Limited, as Trustee of the Kennedy Family Discretionary Settlement, is directly and indirectly interested in 156,641,167 Ordinary Shares, representing 89.99 % of the issued share capital of the Company.

GBP10 million Loan Facility

Zandra Holdings Limited has agreed to provide the Company a GBP10 million loan facility at an interest rate of 9% per annum, to be drawn down on formal request of the Directors (the “Loan Facility”). The Loan Facility ensures the Company is able to take advantage of any significant investment opportunities that may arise, without delay.  No funds have yet been drawn down under the Loan facility.

Related-party Transactions

David Kennedy and Patrick Kennedy are directors of Market Equities Limited and directors of the Kennedy Private Trust Company Limited, Trustee of the Kennedy Family Discretionary Settlement, and the ultimate controlling party of Zandra Holdings Limited. David Kennedy is the Chief Executive Officer and Patrick Kennedy a Non-executive Director of Formation, therefore the transaction constitutes a related party transaction pursuant to the NEX Exchange Growth Market Rules for Issuers. David Kennedy and Patrick Kennedy recused themselves from discussions pertaining to the Subscription and the provision of the Loan Facility.

The Directors of the Company accept responsibility for the contents of this announcement.

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