ReNeuron Announces Fundraising and Conversion of Loan Notes

Guildford, UK, 12 March 2009: ReNeuron Group plc (LSE: RENE.L) announces that it proposes to raise up to £3 million via a placing of up to 100,000,000 new ordinary shares of 1 pence each (“Ordinary Shares”) credited as fully paid up at a price of 3 pence per Ordinary Share (the “Placing”). Commitments from placees have already been received in respect of 92,766,667 Placing Shares, representing gross proceeds of £2.78 million.

The Placing is conditional, inter alia, on shareholder approval. A circular convening an Extraordinary General Meeting on 3 April 2009 (the “EGM”) has been posted to shareholders. At the EGM, shareholder approval will be sought, inter alia, for the allotment and issue of securities as part of the Placing.

To enable certain placees to take advantage of UK Enterprise Investment Scheme (“EIS”) tax treatment it is proposed that the Placing comprise four closings. The first closing is expected to occur following the shareholder meeting on 3 April 2009, the second closing is expected to occur on or prior to 28 May 2009, the third is expected to occur on or prior to 29 May 2009 and the fourth closing is expected to occur on or prior to 1 June 2009.

The net proceeds of the fundraising will, in the opinion of the Directors, provide the Company with sufficient working capital to satisfy its requirements for at least the next 12 months. The net proceeds of the Placing will fund initial ReN001 Phase I trial costs and ongoing development work on ReNeuron’s CTX cell line products, in addition to providing finance for the Company’s other therapeutic programmes and for general working capital expenditure.

Details of the Placing

The Placing is to be effected on behalf of the Company by Collins Stewart Europe Limited (“Collins Stewart”), Daniel Stewart & Company plc (“Daniel Stewart”) and Matrix Corporate Capital LLP (“Matrix”) (together the “Placing Agents”) pursuant to a placing agreement (the “Placing Agreement”). Pursuant to the Placing Agreement, Matrix, Daniel Stewart and Collins Stewart have agreed, subject to certain conditions, to use their reasonable endeavours to procure subscribers for up to 100,000,000 Placing Shares in aggregate.

The Placing Agreement contains warranties in favour of the Placing Agents given by the Company with respect to its business and certain matters connected with the Placing. In addition, the Company has given customary indemnities to the Placing Agents in connection with the Placing and their performance of services in relation to the Placing. The Placing Agents have certain rights to terminate the Placing Agreement in specified circumstances, save that the Placing Agreement may not be terminated by the Placing Agents following the first closing. In addition to commissions payable to the Placing Agents, up to 3,333,333 warrants to subscribe Ordinary Shares at a price of 3p per share will be issued to Matrix. Such warrants will be exercisable for a period of 3 years.

Conversion of Loan Notes

On 24 June 2008, the Company announced that it had agreed £2.5 million in secured loan note financing from Awal Bank and Merlin Biosciences Fund (the “Loan Notes”). The Company has fully drawn down the Loan Notes, on which interest accrues at LIBOR plus 2%. The Company and the Loan Note holders have entered into a conversion agreement which varies the price of conversion under the Loan Notes, whereby, to the extent that such a conversion would not give rise to an obligation to make an offer under Rule 9 of the UK Takeover Code, the outstanding Loan Notes plus accrued interest (totalling approximately £2.57 million in aggregate) will be capitalised into Ordinary Shares at a price of 3 pence per share, conditional on completion of the Placing. The Company expects that the Loan Notes will be fully converted, and on this basis expects to issue approximately 86 million further Ordinary Shares no later than 1 June 2009. A further announcement will be made once the Loan Notes have been converted. The Directors of the Company consider, having consulted with the Company’s nominated adviser, Collins Stewart, that the terms of conversion are fair and reasonable in so far as the Company’s shareholders are concerned.

Details of the EGM

The EGM will be held at the offices of Morrison & Foerster, 7th Floor, CityPoint, One Ropemaker Street, London EC2Y 9AW, at 10.00 a.m. on 3 April 2009. A form of proxy for use at the EGM is enclosed with the circular sent to shareholders. The form of proxy should be completed and returned to the Company’s registrars, Computershare Investor Services plc, PO Box 1075, The Pavilions, Bridgwater Road, Bristol BS99 3FA, in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received no later than 10.00 a.m. on 1 April 2009. Completion and return of a form of proxy will not preclude shareholders from attending and voting in person at the EGM should they so wish.

The authorities to be sought at the EGM are additional to the existing authorities conferred on the Directors at the Company’s Annual General Meeting held on 19 September 2008, as included a general authority in respect of the allotment of securities having a nominal value of £308,335.06 (equivalent to 30,833,506 Ordinary Shares).

The Directors consider the proposed Placing to be in the best interests of the Company and its shareholders as a whole and accordingly unanimously recommend that shareholders vote in favour of the resolution to be proposed at the EGM.

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