Placing to Raise £10 Million

Modern Water plc (UK) have announced recently that they have raised, subject to certain conditions, £10.0 million (approximately £9.5 million net of expenses) by way of a placing of 20,000,000 new Ordinary Shares (the “Placing Shares”) with both new and existing institutional shareholders at a price of 50 pence per Ordinary Share.

The Placing Price is at a discount of 17.7 per cent. to the closing middle market price of 60.75 pence per Ordinary Share on 11 February 2013, the latest date prior to this Announcement.

The Placing Shares will, upon Admission, rank pari passu in all respects with the Ordinary Shares in issue as at the date of this Announcement, including as regards the right to receive all dividends or other distributions declared, made or paid after Admission. The Placing Shares will represent 25.2% of the Company’s enlarged issued ordinary share capital immediately following completion of the Placing.

The net proceeds of the issue of the Placing Shares are expected to be approximately £9.5 million and will enable the Company to pursue opportunities identified by its membrane division to commercialise its Forward Osmosis technology, particularly across China and the Middle East, and to also grow Modern Water’s monitoring business by licensing and acquiring innovative, proven products to leverage its international distribution network.

Neil McDougall, Executive Chairman of Modern Water said: “We are delighted by the strong support, demonstrated by both existing and new shareholders, for the fundraising announced today which was oversubscribed. This is a great vote of confidence in Modern Water. The funds raised will enable us to increase the level and reach of market activities and invest in our growth strategy in key markets, with a particular focus on activities in China. We intend to invest in further improvements in membrane efficiency for the Membrane Processes Division and to expand the Monitoring Division through acquisitions.”