LED : Issue of convertible loan notes and placing of new ordinary shares

LED INTERNATIONAL HOLDINGS LIMITED

("LED" or the "Company")

Issue of convertible loan notes and placing of new ordinary shares

The board of LED (the "Board") is pleased to announce that the Company has entered into agreements with Best Merchant Ventures Limited (the "Noteholder"), Legend Giant Ventures Limited ("LGV"), Talent Plus Ventures Limited ("TPV") and Y&C International Holding Group Limited ("Y&C") (collectively, the "Investors") for the issue of convertible loan notes and the conditional placing of new ordinary shares, raising a total sum of RMB100 million (approximately £9.68 million) (the "Transaction").

Highlights:

• total funding of RMB100 million (approximately £9.68 million) secured via a convertible loan note and a conditional placing
• net proceeds of fundraise to be used to commence LED's lease financing business and for general working capital purposes
• notice of EGM currently being prepared
• funds to be received by the end of April 2014
Stephen Chan, Chief Executive Officer, commented: "We are delighted to be able to announce this significant investment in LED and see it as an important validation of our business plan. Energy saving and conservation are becoming increasingly more important in China and we believe that LED is well placed, and now well funded, to be able to take advantage of this."

Background

Following the uncertainty of the subscription and loan conversion (further details of which can be found in LED's announcements on 26 February 2014 and 20 March 2014) (the "Subscription and Loan Conversion"), LED has explored other investment opportunities with a number of interested parties in order to secure much needed funding. Through this exercise, the Board had concluded that the Investors offer the best opportunity to secure the future of the Company and entered into discussions with the Investors in relation to the Transaction.
The Investors are group of mainly private investors based in Taiwan with experience in the energy saving and conservation sectors, sectors which the Investors consider have considerable growth potential in China. The Investors have a track record of investing in energy conservation projects out of Taiwan and the Board believes that their collective experience in these sectors will be of great benefit to the Company going forward.

Details of the Transaction

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Issue of Convertible Loan Notes

Pursuant to the terms of the Transaction, the Company's new wholly-owned subsidiary, Osmar Limited ("Osmar") will issue convertible loan notes to the Noteholder (the "Loan Notes"), raising RMB95,000,000 (approximately £9.20 million) (the "Loan"). The net proceeds of the Loan will be used by the Company to provide the necessary capital contribution to LED's leasing finance company, Green Pearl Leasing (China) Company Limited ("Green Pearl Leasing") and also for general working capital purposes. The Company will also carry out a restructuring exercise whereby the beneficial interest in Green Pearl Leasing shall be transferred to Osmar. Further details on the background to Green Pearl Leasing are contained in the announcements on 21
June 2013 and 18 November 2013.
The principal of the Loan Notes is due on 31 December 2015 and attracts interest at 9 per cent. per annum. Interest on the Loan Notes is satisfied by the issue of ordinary shares in LED. The Noteholder may at any time after the issue of the Loan Notes: (i) convert the Loan Notes into ordinary shares of Osmar ("Osmar Shares") at a conversion rate of RMB2,000 per Osmar Share ("Conversion"); or (ii) redeem the Loan Notes by requiring Osmar to procure the allotment and issue of ordinary shares in LED ("LED Shares") at a price of RMB2 (approximately 19.37 pence) per LED Share ("Redemption"). The Loan Notes are freely transferable and can be repaid prior to conversion at the discretion of the Company without penalty.
In the event that the Loan Notes are fully converted into Osmar Shares pursuant to Conversion, the Company has entered into an agreement with the Noteholder to acquire the Osmar Shares in consideration for the issue and allotment of 47,500,000 LED Shares to the Noteholder at a price of RMB2 (approximately 19.37 pence) per LED Share (the "Share Swap").
By virtue of the number of shares being issued pursuant to the Redemption and the Share Swap, these are conditional on, inter alia, the passing of resolutions to give the Board the authority to issue LED Shares pursuant to the Redemption and the Share Swap free of any rights of pre-emption. Accordingly, a notice of Extraordinary General Meeting (the "EGM") of the Company is currently being prepared and the Board expects that the EGM will be held in mid- May 2014. Further announcements in this regard will be made at the appropriate time.

Placing of LED Shares

Pursuant to the terms of the Transaction, LED has also conditionally placed 2,500,000 LED Shares (the "Placing Shares") with LGV, TPV and Y&C at a placing price of RMB2 per LED Share (approximately 19.37 pence) (the "Placing"), raising RMB5,000,000 (approximately
£484,000) (the "Subscription Funds"). The Subscription Funds will be used to assist in continued development of LED's energy management contract (EMC) model and to augment LED's working capital position. Once issued, the Placing Shares will represent 33.19 per cent.
of the enlarged issued share capital of LED.

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Statistics of the Transaction

The price of RMB2 (approximately 19.37 pence) per LED Share under the Placing and the Redemption represents a 13.94 per cent. premium to the closing middle market price of 17 pence on 28 March 2014, being the last practical date before the Transaction.
It is anticipated that the Subscription Funds and the Loan will be received by 30 April 2014 and, following receipt, an application will be made for the Placing Shares to be admitted to trading on AIM. Following the issue and allotment of the Placing Shares, the Company's issued share capital will be 7,532,934 ordinary shares of which LGV will hold 1,250,000 (representing 16.59 per cent. of the enlarged share capital), TPV will hold 875,000 (representing 11.62 per cent. of the enlarged share capital) and Y&C will hold 375,000 (representing 4.98 per cent. of the enlarged share capital).
Assuming full exercise by the Noteholder of its right to fully convert the Loan Notes pursuant to the Redemption or upon completion of the Share Swap (as the case may be), the Noteholder will be interested in a further 47,500,000 LED Shares (representing 86.31 per cent.). LGV, TPV and Y&C are each interested in the Noteholder. Should full conversion take place, the Investors will collectively be interested in 50,000,000 LED Shares, representing 90.85 per cent. of the Company's enlarged issued share capital. In effect, LGV, TPV and Y&C would be interested in
25,000,000, 17,500,000 and 7,500,000 LED shares, representing 45.425 per cent., 31.80 per cent. and 13.625 per cent. of the enlarged share capital of LED, respectively.

For further information: LED International Holdings Limited

Stephen Chan - Chief Executive Officer [phone]

Allenby Capital Limited

Nick Naylor / Alex Price [phone]

Notes to Editors:

LED International Holdings Limited and its subsidiaries specialize in the provision of EMC contracts under which the Group installs energy saving products in its customers' premises, including lighting and reactance filtering equipment supplied by the Group, and the subsequent savings made by the customers in their electricity charges are then shared between the Group and the customers thereby enabling the Group to generate recurring revenue rather than one-
off sales revenue. Historically, the Group's business has been the development, manufacture

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and sale of low-powered light-emitting diode ("LED") display screens and modules.
Under EMC contracts, the Group provides energy efficiency solutions, including LED lighting, reactance filtering energy saving and other energy efficiency solutions. Specifically, the Group overhauls its customers' existing lighting and power consumption systems (which are based on traditional lighting technology and power generation equipment) with proprietary LED lighting products, reactance filtering equipment and other solutions provided by the Group. These energy efficiency products are installed in customers' premises. The Group bears all the upfront costs associated with the supply and installation of the energy efficiency solutions and these costs are then recouped by sharing in the monthly energy savings generated by the customers' use of the energy efficiency solutions over the period of the contracts. The Group receives revenue from customers on several different payment terms including on a pre-payment, monthly or quarterly basis.
For more information, please visit: http://www.led-intl.com
**Ends**

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