Placing and Open Offer

RNS Number:7365S
Room Service Group PLC
02 December 2003


            Room Service Group PLC ("Room Service" or "the Company")

                  Placing of 19.5 million new ordinary shares,

                Open Offer of 12,422,500 new ordinary shares and

           Debt Conversion into new ordinary shares, at 1p per share

                                      and

                      Change of name to Azure Holdings plc


In the preliminary announcement of the results for the year ended 31st December,
2002, it was announced that Chiddingfold Investments Limited ("Chiddingfold")
had acquired #119,760 of the Company's debts from a third party ("the
Chiddingfold Debt"), leaving a further #96,740 of the Company's debts
outstanding. It was also announced that the directors of the Company ("the
Directors") had agreed with Chiddingfold that Chiddingfold would enter into
arrangements to make a loan of #100,000 to Room Service, convertible into new
ordinary shares at 1p per share, following the implementation of the proposed
capital reconstruction which was approved at the annual general meeting of the
Company held on 20th October, 2003. The Directors have been advised that the
sole director and shareholder of Chiddingfold is Mr Peter Abbey.


The Company now announces that it has issued 19.5 million new ordinary shares
("Placing Shares") to Chiddingfold and its associates, conditional upon
admission to AIM, at 1p per share, to raise #195,000 for the Company (" the
Placing"). The Placing Shares will not rank for the open offer described below.
Nicolas Greenstone and Raymond Harris, respectively the chairman and a director
of the Company have each subscribed for 500,000 new ordinary shares, equivalent
to 1.6 per cent. each of the share capital of the Company as enlarged by the
Placing and the Debt Conversion referred to below.


The Directors believe that the Company's working capital requirement is best met
by an equity issue and, therefore, the Placing, which replaces the previously
announced proposed loan from Chiddingfold, will enable the Company to pay its
remaining creditors, other than Chiddingfold, and to retain a margin of
additional funds for working capital and for evaluating potential acquisitions.
To extinguish the majority of the Chiddingfold Debt, the Company has issued 10.5
million new ordinary shares ("the Debt Conversion Shares") to Chiddingfold, also
at 1p per share ("the Debt Conversion"), conditional upon admission to AIM. This
is the maximum issue of new ordinary shares for cash permitted under the
authority granted at the recent annual general meeting and leaves #14,760
outstanding, to be settled by the issue of 1,476,000 new ordinary shares at 1p
per share.

As a result of the Placing and the Debt Conversion, Chiddingfold and its
associates hold 80.98 per cent. of the Company's issued share capital as
enlarged by the Placing and the Debt Conversion and, accordingly, Chiddingfold
and its associates have incurred an obligation under Rule 9 of the City Code on
Takeovers and Mergers ("City Code") to make a general offer for Room Service at
1p per share. The outstanding 1,476,000 shares due to Chiddingfold in respect of
the Debt Conversion as set out above will not be issued until such time as their
issue would not impose any further obligation on Chiddingfold under Rule 9 of
the City Code.


The Directors wish to offer existing shareholders the opportunity to participate
in the overall refinancing of the Company at the same price as the Placing and
the Debt Conversion. Accordingly, shareholders will be invited to subscribe for
new ordinary shares by way of an open offer of 12,422,500 new ordinary shares on
the basis of ten new ordinary shares for each existing ordinary share held
("Open Offer") at a price of 1p per new ordinary share. The Open Offer will not
be underwritten. Chiddingfold has agreed to underwrite the costs of the Open
Offer to the extent that the proceeds raised are insufficient to do so. The
necessary documentation will be sent to shareholders as soon as practicable; it
is intended that this should be within one month. In any event, the prospectus
will not be sent to shareholders until such date as will ensure that the Rule 9
offer closes at least one week before the final day for subscription under the
Open Offer.


The documentation will contain a detailed timetable. This will state that the
record date for the Open Offer will be today's date and the ex-entitlement date
for the Open Offer will be the date of restoration of trading in the Company's
shares on AIM, which is expected to be 5th December, 2003. Accordingly, when
trading is restored, the Company's ordinary shares will be "ex-entitlement".


For arranging the Placing and the Debt Conversion and underwriting the costs of
the Open Offer, the Company has agreed to pay Libra Investments Limited
("Libra"), an associate of Chiddingfold, a fee of #10,000 and a commission of
3.2 per cent. of the amount equal to the aggregate of the gross proceeds of the
Placing and the value of the Debt Conversion ("the Libra Fee"), to be satisfied
by the issue of 2,000,000 new ordinary shares ("the Libra Shares") at 1p per
share, which will be settled at such time as their issue would not impose any
obligation on Libra under Rule 9 of the City Code. The Directors have also been
advised that the sole director and shareholder of Libra is Mr Peter Abbey.


The Placing Shares and the Debt Conversion Shares have been issued pursuant to
the authority granted at the annual general meeting held on 20th October 2003
and an application will be made for them to be admitted to trading on the
Alternative Investment Market.


Gerald Gold, as the independent director, considers, having consulted with the
Company's nominated adviser, John East & Partners Limited, that the terms of the
Placing, the Open Offer, the Debt Conversion and the Libra Fee, taken together,
are fair and reasonable as far as the shareholders of the Company are concerned.


Restoration of trading in the Company's ordinary shares on AIM and trading in
the Placing Shares and the Debt Conversion Shares are expected to commence on
5th December 2003.


The change of name of the Company to Azure Holdings plc, which was approved at
the recent Annual General Meeting has now become effective.


2nd December 2003


Enquiries:

Azure Holdings plc
Nicolas Greenstone (Chairman)                                    020 7723 8833

John East & Partners Limited
John East/David Worlidge/Simon Clements                          020 7628 2200


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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