China Food Company Plc : 6 September 2013 - Subscription of Convertible Loan Notes

Press Release 6 September 2013 China Food Company Plc

("China Food", "Group" or the "Company")

Subscription of Convertible Loan Notes and Conversion of Unsecured Debt into Loan Notes

China Food Company Plc (AIM:CFC), a leading Chinese manufacturer of cooking and dipping sauces, announces it has raised £850,000 before expenses through a subscription of 850 Convertible Loan Notes of £1,000 each ("Loan Notes") by existing and new investors (the "Subscription"). This follows the Company's recent appointment of PwC to manage the potential sale of the Group's animal feed production business, Fuss Feed (Weifang) Co., Ltd, which it is anticipated will be completed in summer 2014. The Loan Notes subscribed for today will provide interim support until the sale of the animal feed business is completed and the funds from this disposal are received.
The Loan Notes subscribed for are A Loan Notes and all Loan Notes may be converted at any time up to maturity at a price of 15.5 pence at the option of the Loan Note Holder. Interest will be charged at a rate of 17.5 per cent per annum until 30 September 2013; 20 per cent per annum from 1 October to 31 December 2013 and 25 per cent per annum thereafter until redemption. A redemption premium of 1 per cent of the Loan Note holder's original holding will be payable on redemption.
The Loan Note holders retain the right not to redeem their holding until maturity of the Loan Notes on 3 November 2014, in which case the interest rate will be fixed at the rate prevailing on the date of the Company's proposed redemption. In the event the Company is unable to transfer funds from the PRC to pay interest when due, the Loan Note holders have agreed that interest charged will be rolled up and compounded semi-annually to maturity.

Conversion of unsecured debt into Loan Notes

At the same time as the Subscription, a number of parties will be converting existing unsecured debt owed to them by the Company into a total of 390 A Loan Notes and 75 B Loan Notes (the "Conversion"). These parties include three directors:

Director Number of A Loan Notes received Total Loan Notes held post Conversion

John McLean 175 225
Raphael Tham 175 175
Clifford Halvorsen 40 40
In accordance with the AIM Rules for Companies the Conversion by the directors is a related party transaction. The Independent Directors, having consulted with the Company's Nominated Adviser, finnCap Limited, consider that the Conversion by directors is fair and reasonable insofar as the Company's shareholders are concerned.
The Company has applied to ISDX for the newly issued 1,240 A Loan Notes to be admitted to trading ("Admission"). Admission is expected to occur on 11 September 2013. Following the Subscription and the Conversion, there is a total of 5,694 Loan Notes in issue, totaling
£5.69 million.
Commenting on the Subscription, John McLean, Chairman of China Food Company plc, said: "The Board is pleased that investors have continued to support the Company through this exciting period and we look forward to repaying this support over the coming year following the sale of our Fuss Feed subsidiary. Our advisers have expressed their confidence at being able to find a suitable buyer at the right price and we look forward to updating the market in due course."

- Ends - For further information: China Food Company Plc

John McLean, Chairman Tel: [phone]
www.chinafoodcompany.com

finnCap

Geoff Nash / Ben Thompson (Corporate Finance) Tel: [phone]
Simon Starr (Broking)

Numis Securities

David Poutney (Joint Broker) Tel: [phone]

Media enquiries: Abchurch Communications

Henry Harrison-Topham / Joanne Shears Tel: [phone] [e-mail] www.abchurch-group.com