RNS Number : 3719Z
  GMO Limited
  18 July 2008
   

    
 Press Release   18 July 2008

    GMO Limited
    Conversion of Murabahah Loan Notes
    Highlights
    The Board of GMO Limited ("GMO" or "the Company") is pleased to announce the following:

    *     that it has entered into agreements with each of the holders of the Murabahah Loan Notes issued by the Company in January 2007
("Loan Notes") to vary the terms of the Loan Notes to allow their redemption by way of an issue of ordinary shares in the Company at 7 pence
per share;

    *     upon the conversions, the Company will issue an aggregate of up to 143,289,763 new ordinary shares of no par value, representing
358.22 per cent of the current issued share capital of the Company;

    *     the conversions and issue of new ordinary shares, which are subject to certain conditions, are expected to take place in mid
August; and

    *     a capital reorganisation, pursuant to which the companies existing ordinary shares of 10p will be converted to new ordinary shares
of no par value.

    The entering into of the agreements by the Company with each of Green Packet, mTouche and OSK Ventures (each of whom are a substantial
shareholder in the Company within the meaning of the AIM Rules) is deemed to be a related party transaction pursuant to the AIM Rules. 
Having consulted with Blue Oar Securities, its nominated adviser, the Directors consider that, in their view, the terms of the agreements
with the Holders and the proposed Conversions are fair and reasonable insofar as Shareholders are concerned.

    In order to effect the conversions an extraordinary general meeting of the company has been convened for 12 August 2008 and a circular
will be sent to shareholders shortly.

    For further information:
 GMO Limited 
 Eugene Goh, Chief Executive Officer   Tel: + 65 9690 0099
 eugene@gmoglobal.com                   www.gmoglobal.com 

 Blue Oar Securities
 Justin Lewis                           Tel: +61 (0) 3 8637 1540
 jlewis@blueoarsecurities.co.uk
 John Wakefield                        Tel: +44 (0) 117 933 0020
 jwakefield@blueoarsecurities.co.uk  www.blueoarsecurities.co.uk

      
    GMO Limited
    Conversion of Murabahah Loan Notes

    GMO announces that it has entered into agreements with each of the holders of the Loan Notes ("Holders") to vary the terms of the Loan
Notes to allow the redemption of the Loan Notes by the Company in exchange for new ordinary shares of no par value ("New Ordinary Shares"),
to be issued to the Holders at a subscription price of 7 pence per share. The conversions of the Loan Notes ("the Conversions") are subject
to certain conditions which are further described below.  

    In order to allow the Conversions to occur, the Company is also proposing a capital reorganisation, pursuant to which the existing
ordinary shares of the Company, which have a par value of 10 pence each, will be converted into ordinary shares of no par value and the
Company's authorised share capital will be increased so as to comprise an unlimited number of no par value shares.

    Because certain of the Holders are deemed to be related parties pursuant to the AIM Rules, the entering into certain of the agreements
by the Company to allow the Conversions are classed as related party transactions pursuant to the AIM Rules.  Before any Conversions can
take place, the approval of Shareholders is required to the Capital Reorganisation and to the issue and allotment of New Ordinary Shares
pursuant to the Conversions.

    Accordingly, an extraordinary general meeting is being convened for the purposes of passing the necessary resolutions. A circular to
convene the meeting is being sent to shareholders to day and will be available on the Companies website.

    The Conversions
    Background

    The Company issued the Loan Notes in respect of a total amount of US$20,235,100 on 22 January 2007 in order to assist in the financing
of the acquisition of a 20 per cent equity interest in Wisdom Choice Investment Limited. The Loan Notes are redeemable on 22 January 2009
and, as of 26 June 2008, the aggregate amount outstanding under the Loan Notes is US$19,713,519.

    The Company has been in discussions with the Holders with a view that it is in the best interest of the Company to put the Company back
on a strong footing by way of conversion of the Loan Notes.  

    The Conversions

    The Company has today entered into agreements with each of the Holders, whereby the Loan Notes will be amended to allow them to be
redeemed by the Company in exchange for a number of New Ordinary Shares which represents the relevant amount due to a Holder at a
subscription price of 7 pence per share.  mTouche has entered into its agreement conditional on the approval of its own shareholders in
general meeting.  

    The entering into of the agreements by the Company with each of Green Packet, mTouche and OSK Ventures (each of whom are a substantial
shareholder in the Company within the meaning of the AIM Rules) is deemed to be a related party transaction pursuant to the AIM Rules. 
Having consulted with Blue Oar Securities Plc, its nominated adviser, the Directors consider that, in their view, the terms of the
agreements with the Holders and the proposed Conversions are fair and reasonable insofar as Shareholders are concerned.

    Subject to the passing of the resolutions and to the approval of the shareholders of mTouche, it is the Company's intention to redeem
the Loan Notes and effect the Conversions as soon as reasonably practicable which is anticipated to be in mid August. Upon the Conversions,
the Company will issue an aggregate of 143,289,763 New Ordinary Shares, representing 358.22 per cent of the current issued share capital of
the Company. 


 Holder                   Loan Notes       Shares on Conversion       Resultant        Percentage
                      Outstanding (USD)                              shareholding
 Green Packet             5,275,356             38,344,474            50,344,474         27.47
 mTouch                   7,884,263             57,307,586            69,307,586         37.81
 OSK Ventures             3,943,739             28,665,477            34,665,477         18.91
 Wago Group Limited       2,610,161             18,972,227            18,972,227         10.35

    Following the conversions, the Holders applications will be made for the New Ordinary Shares to be admitted to AIM. 

    Current Trading

    GMO, in its quest to become a leading WVAS and Media Company in China, is constantly evaluating its business and other potential
opportunities. The Group continues to explore various acquisition opportunities in order to strengthen their businesses. The Group's
investment strategy will be to acquire profitable trading businesses which are cash generative and capable of organic growth or growth by
acquisition.

    Capital Reorganisation
    The current share price of the Company is 5.5 pence per share and the existing ordinary shares have a nominal value of 10 pence per
share. Pursuant to the Act, the Company cannot issue shares for less than their nominal value.  However, under the Act, the Company may
issue shares of no nominal value (or "no par value") if it converts all of its shares to no par value shares.  

    In order to allow the Company to issue shares at their current market value, which is less than their current nominal value, and to give
flexibility for, amongst other things, future share issues, the Directors believe it is in the best interests of Shareholders to convert the
Existing Ordinary Shares into ordinary shares of no par value.  Resolutions are therefore being proposed at the extraordinary general
meeting in order to effect the Capital Reorganisation, which will also require consequential amendments to the memorandum and articles of
association of the Company.

    - Ends -

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