Fundraising

RNS Number:5652M
Eleksen Group PLC
23 November 2006


                               Eleksen Group plc

                          ("Eleksen" or the "Company")


Eleksen raises #1.68 million through the issue of 7.5% Convertible Secured 
                                Loan Notes 2009
                                        
                                        

23 November 2006



Eleksen Group plc, which makes smart fabrics that can be used to control
electronic devices such as smartphones and MP3 players, has raised #1.68 million
through the issue of 7.5% Convertible Secured Loan Notes 2009 (the "Notes") to
certain existing shareholders.


The Notes, which mature on 31 March 2009, carry a coupon of 7.5% per annum and
are convertible into ordinary shares of Eleksen at a conversion price of 40p. In
addition, each Noteholder will be issued with a warrant which allows it to
acquire one Eleksen share, at a price of 43p, for every #2 principal amount of
Notes held. Noteholders will be able to convert into shares after 18 May 2007,
while the Company may require conversion at any time after 22 November 2007 if
the Company's share price has traded at or above 75p for a period of not less
than 21 consecutive days.


The funds raised will be used to support the Company's working capital needs.
The Company may raise further funds, which including the amount already raised,
would not exceed a total of #3.0 million, over the next 45 days via a further
issue of Loan Notes and Warrants. The Company is also at an advanced stage of
negotiating a working capital facility of up to an additional #1.0 million.
Further announcements in connection with both matters will be issued in due
course.


As announced in the interim results for the period from 1 January to 30 June,
the Company has made a good start to the year with sales in the first six months
up over 622 per cent. to #1.8 million compared with the same period in 2005. In
the year to date, products worth #3.5 million have been delivered or are
currently under purchase order, compared with #1.3 million for the whole of
2005.


Robin Shephard, Chief Executive Officer, said:


"There is no shortage of opportunities for our technology. We are delighted that
our existing shareholders have shown their support for Eleksen through this
funding which will strengthen our ability to exploit the opportunities we see
for the company."


City Capital Corporation Ltd is acting as Lead Arranger for the Loan Note
transaction.


Ends









For further information, please contact


Eleksen                                 08700 72 72 72

Robin Shephard, Chief Executive

Ted Bechman, Chief Financial Officer


City Capital Corporation Ltd

Marcus Scott                            020 7583 5800


Panmure Gordon                          0207 459 3600

Andrew Godber


Cubitt Consulting                       020 7367 5100

Michael Henman


About Eleksen


Eleksen's core technology, ElekTex(R), enables fabric to be programmed, creating
touch sensitive controls for a wide range of electronic devices.


Eleksen's initial focus is on wearables, such as soft MP3 controllers integrated
into outdoor jackets, rucksacks and suits; and on soft, fabric keyboards for
smartphones and PDAs. A wide range of other applications may exist including
solutions for the toy, industrial, military, automotive and healthcare markets.


Further information on the Group is available at www.eleksen.com



Appendix


1. 7.5% Convertible Secured Loan Notes 2009: Additional details


The Notes, which mature on 31 March 2009, will bear interest at 7.5% per annum
gross, payable semi annually in arrears, and are convertible at the option of
the Noteholder into ordinary shares of Eleksen at a conversion price of 40p.
Until maturity, the Noteholders may convert all or part of the outstanding fully
paid Notes into ordinary shares at any time after 18 May 2007, while the Company
may require conversion at any time after 22 November 2007 if the Company's share
price has traded in excess of 75p for a period of 21 consecutive trading days.
If shares representing over more than 50% of the voting rights in the capital of
Eleksen are sold for less than or equal to 50p per share (being the price per
share under the reverse takeover of Bora Communications plc, an AIM listed cash
shell, in May 2006 when the Group joined AIM), the conversion price will be
adjusted to 20p per share. The Notes benefit from standard events of default, as
well as negative pledge and cross-default protections. The Notes may be
transferred in certain circumstances.


The obligations of the Company will be secured by the Company's wholly owned
subsidiary, Eleksen Limited, creating a first ranking floating charge over all
of the intellectual property owned by Eleksen Limited.


In addition, each Noteholder has been simultaneously issued with one warrant,
which allows it to subscribe for one ordinary share of Eleksen at an exercise
price of 43p, for every #2 principal amount of Notes issued to it (the
"Warrants").


The Company is also entitled to issue further convertible securities carrying
different terms to the Notes (which cannot rank in priority to the Notes)
provided that the aggregate principal amount of all outstanding borrowings
ranking pari passu with the Notes (excluding its existing working capital
facility) shall be limited to #3m.


The Company will not apply for the Notes and Warrants to be admitted to trading
on AIM.





2. Notifiable interests immediately prior to the issue of the Notes and Warrants


Immediately prior to the issue of the Notes and Warrants, the Directors are
aware that, as at the date of this announcement, the following persons are
interested, directly or indirectly, in 3 per cent. or more of the issued share
capital of the Company:

Name of          Shareholder's interest in       Percentage of the total issued
Shareholder       number of Ordinary Shares       share capital of the Company

MTI4 Limited
Partnership
and MTI4 "B"
Limited
Partnership                      9,347,971                               22.83%

Tempopark
Fund II LP                       3,883,139                                9.48%

MVI Finance
Limited                          2,236,433                                5.46%


3. Notifiable interests following the issue of the Notes and Warrants


Upon the issue of the Notes and Warrants the Directors are aware that, as at the
date of this announcement, the following persons would then be interested, upon
conversion, directly or indirectly, in 3 per cent. or more of the issued share
capital of the Company following the issue of the Notes and Warrants:

Name of        Shareholder's interest in     Maximum percentage of the total issued
Shareholder    number of Ordinary Shares     share capital of the Company

MTI4 Limited
Partnership
and MTI4 "B" 
Limited
Partnership                   10,847,971                                  26.49%

Tempopark
Fund II LP                     6,883,139                                  16.81%

MVI Finance
Limited                        2,632,433                                   6.43%


4. Related Party


David Ward, a non-executive director of the Company, is a beneficial owner of
9,347,971 ordinary shares in the Company, the registered holder of which is MTI4
Limited Partnership and MTI4 "B" Limited Partnership (together "MTI"). Mr Ward
is also a director of MTI Partners Limited. MTI have subscribed for #0.5 million
of the #1.68m raised to date. The issue of the Notes and Warrants are therefore
a related party transaction according to the AIM Rules. Having consulted with
the Company's nominated adviser, Panmure Gordon, the directors of the Company
(with the exception of David Ward who is a related party) consider that the
terms of the transaction are fair and reasonable insofar as its shareholders are
concerned.




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

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