Issue of Convertible Loan Not

RNS Number : 4691A

Artisan (UK) PLC

01 August 2008

ARTISAN (UK) PLC

ISSUE OF CONVERTIBLE LOAN NOTES

Artisan (UK) plc ('Artisan' or 'the Company'), the AIM listed housebuilder, commercial property developer and property investor, announces that it has today raised £1.75m (before expenses) by the issue of convertible loan notes ('Loan Notes') to Aspen Finance Limited ('Aspen').

The issue of the Loan Notes fulfils an existing commitment agreed in 2007 on the part of Artisan to its bankers to support new funding for the Artisan Group's investment property. Although this was originally envisaged as equity funding, the Directors believe that the current market conditions are not conducive to equity fund raising. A convertible loan structure has therefore been agreed. The loan funding facilitates replacement of development capital within the business. This will enhance the Group cash headroom which is already substantial and is available to meet any further market deterioration or more positively allow for the funding of further development opportunities.

Aspen is a substantial shareholder in the Company, holding 29.55% of the voting rights (excluding treasury shares), and Michael Stevens, the Chairman of Artisan, has a beneficial interest in the shares held by Aspen. The issue of the Loan Notes is therefore a related party transaction under AIM Rule 13. The directors of the Company (other than Michael Stevens) having consulted with the Company's nominated adviser, Brewin Dolphin Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

The Loan Notes are subordinated to the banking facilities provided by National Westminster Bank plc ('Natwest') to the Company, but are otherwise repayable on 1st July 2012. In the meantime, the Loan Notes carry interest at a rate 1.25% above the Natwest Base Rate, from time to time, the same rate of interest as payable by the Group in respect of its investment property bank funding.

The Loan Notes are convertible at any time, at the holder's option, into ordinary shares of 20p each in the capital of the Company ('Ordinary Shares'). The conversion price is -

(1) until 30th June 2009. 34.125p per Ordinary Share, being the average mid-market closing price of the
Ordinary Shares over the previous ten dealing days;

(2) from 1st July 2009 to 30th June 2010, 80p per Ordinary Share;

(3) from 1st July 2010 to 30th June 2011, 85p per Ordinary Share; and

(4) after 1st July 2011, 90p per Ordinary Share.

If, as a result of converting the Loan Notes, Aspen acquired 30% or more of the voting rights in relation to the Company, it would be obliged to make an offer to other shareholders to acquire their shares in accordance with Rule 9 of the Takeover Code.

Artisan (UK) plc

Chris Musselle

Chief Executive 01480 436666
email@artisan-plc.co.uk

Brewin Dolphin Limited

Nominated adviser

Andrew Kitchingman 0845 270 8613

Sean Wyndham-Quin 0845 270 9518

Bankside Consultants

Financial PR advisers

Simon Rothschild 020 7367 8888

Louise Mason 07703 167065

Company website: www.artisan-plc.co.uk