IPSA GROUP PLC - Issue of New Loan Notes and Entry into a Loan Agreement

Issue of New Loan Notes and Entry into a Loan Agreement

IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA   ISIN GB00BOCJ3F01
JSE Share Code IPS    ISIN GB00BOCJ3F01
("IPSA" or "the company")

ISSUE OF NEW LOAN NOTES AND ENTRY INTO A LOAN AGREEMENT

Loan Notes

IPSA Group PLC, the developer, owner and operator of power
generation capacity in Southern Africa, announces that, on 26
July 2012, the Company agreed to enter into a new loan note
agreement with several investors in order to refinance the loan
notes which were due for redemption in 2011.

The original loan notes which were issued on 5 March 2010 had
provided working capital of GBP650,000, and will be replaced by
new unsecured non-convertible loan notes (the “2012 Loan Notes”)
for the same amount.       The 2012 Loan Notes are repayable,
together with accrued interest thereon, on the earlier of:
•   the sale of the Company’s two Siemens Westinghouse 701 DU
    turbines;
•   a full or partial sale of certain other plant or equipment in
    South Africa for at least USD8 million;
•   a change of control of the Company; or
•   31 July 2013;

The 2012 Loan Notes bear interest at 6% per annum and carry a
praecipium payment of 10% of the face value of the notes. Both
the interest and the praecipium are payable together with the
principal on any of the above listed repayment events.

Sterling Trust Limited (“Sterling Trust”), which is the
Company’s largest shareholder, has subscribed for GBP350,000 of
the 2012 Loan Notes.

New Loan Agreement

On 26 July 2012,     the Company and its subsidiary Newcastle
Cogeneration Pty.    Limited (“Newcogen”), IPSA's wholly-owned
operation in Newcastle, KwaZulu Natal, also concluded terms with
Sterling Trust for a loan facility of GBP550,000 to provide
Newcogen with financing to enable it to discharge a proposed
settlement with Sasol Gas Limited in relation to a gas supply
agreement which was terminated in August 2009 (the “Newcogen
Loan”).

The Newcogen Loan carries interest at a rate of 1.25% per month
on the first GBP150,000 drawn down under the facility, and 1%
per month on the balance when drawn down. Amounts drawn down
under the facility are repayable, together with accrued interest
thereon, on the earlier of:

•   the sale of the Company’s two Siemens Westinghouse 701 DU
    turbines; or
•   26 January 2013;
Sterling Trust already has an outstanding loan to Newcogen for a
principal amount of GBP300,000.

Working Capital

Neither the Newcogen Loan nor the 2012 Loan Notes will provide
working capital for the Company other than as set out above –
specifically in relation to discharging the proposed SASOL
settlement. Although Newcogen is cash generative, IPSA continues
to rely on the continued support of all its creditors whilst it
works towards a disposal of its two remaining turbines.

Related Party Transactions

Sterling Trust holds approximately 29% of the issued share
capital of the Company and is therefore deemed to be a Related
Party under the AIM Rules.     Sterling Trust’s subscription for
GBP350,000 of the 2012 Loan Notes and its GBP550,000 loan to
Newcogen are both related party transactions. The Company’s
independent directors, having consulted with Execution Noble &
Company Limited, the Company’s Nominated Advisor, consider that
the terms of the 2012 Loan Notes and the terms of the Loan
facility with Sterling Trust are fair and reasonable insofar as
the Company’s shareholders are concerned.
Richard Linnell, Chairman, commented “We are pleased to be in a
position to settle the long-standing dispute with SASOL, and are
thankful for the continued support of our creditors and
lenders”.


London
27 July 2012

For further information contact:

Phil Metcalf, CEO, IPSA Group PLC   +44 (0)20 7793 5615

John Llewellyn-Lloyd / Harry Stockdale,         Execution   Noble    &
Company Ltd  +44 (0)20 7456 9191

James Joyce / Harry Ansell W H Ireland Ltd      +44(0)20 7220 1666

Riaan van Heerden,PSG Capital (Pty) Ltd      +27 (0)21 887 9602

Date: 27/07/2012 11:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.