Asian Expansion

RNS Number:0685X
London Asia Capital PLC
23 May 2007


23 May 2007

                            London Asia Capital plc

                   Expansion of Financial Services Operations


London Asia Capital plc ("London Asia" or "the Company") the UK listed (AIM:
LDC.L) Asia focused merchant banking group, is expanding its investments in the
Asian financial services sector through an investment in London Asia Limited
("LAL").

LAL, newly incorporated in Hong Kong, will focus primarily on investing in
financial services businesses in Asia. The financial services sector in China is
opening up as a result of commitments made as part of China's entry into the
WTO, and various reforms implemented by China. Increasing amounts of China's
personal savings, estimated at over US$1.3 trillion, are being diverted into
financial products and the stock market, with financial services providers from
around the world seeking ways to enter what has until recently been a largely
restricted market for foreign firms.

LAL is issuing HK$100 million (#6.5 million) of new shares, of which London Asia
is taking 40%. London Asia is paying for its 40% stake by the issue to LAL of
21,505,376 ordinary 5p shares in London Asia at an effective price of 12p per
London Asia share. The other 60% of LAL is owned by the LAL management team,
headed by Mr Kok Leong Koo, and its associates. Application will be made to
admit the new shares to trading on AIM, with admission expected on 30 May 2007.

Jack Wigglesworth, London Asia Chairman, said: "London Asia is currently trading
profitably and has adequate cash to meet its on-going operational needs.
However, given its existing investment commitments, it does not have the
necessary cash resources to finance its expansion strategy, which includes
investing in regulated businesses in its core markets of Hong Kong and China,
which will give it the ability to participate more actively in China's financial
services sector and stock markets, which is where the board believes the future
of the business lies.

"The Board believes that if the Company does not continue to expand, it risks
being left behind in its market place, which is rapidly expanding with the
smaller players being squeezed out. Unless London Asia expands rapidly, it will
be too small, in terms of senior management staff, balance sheet and financial
resources, to compete with the increasing number of players likely to enter its
market.

"The Board of London Asia has taken the decision to expand the business more
aggressively, through partnering with local firms who can provide access to
markets, financial and personnel resources, licences and expertise. By entering
into business relationships with local partners, where London Asia acquires its
stake in shares rather than cash, it is able to take a stake in a business, gain
access to markets and generate revenue it would not otherwise have the resources
to do by itself."

Simon Littlewood, London Asia Chief Executive, said: "The investment in LAL
provides London Asia with the opportunity to expand much more rapidly than it
could using its own cash resources alone, as LAL has the ability to make
acquisitions off its own balance sheet. LAL is currently negotiating its first
two acquisitions, in the insurance and distressed asset sectors. Both
acquisitions bring with them management teams with expertise in their sector."


For further information please visit www.londonasia.com or contact:

Simon Littlewood             John West/Andrew Dunn            Jonathan Wright
London Asia Capital plc      Tavistock Communications         Seymour Pierce
Tel: [phone]           Tel: [phone]               Tel: [phone]



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

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