Successful placings and new contract win (8729T)

TIDMRIIG

RNS Number : 8729T

Resources In Insurance Group PLC

14 December 2011

14 December 2011

RESOURCES IN INSURANCE GROUP PLC

(the "Company")

Successful placings and new contract win

Resources in Insurance Group plc (AIM: RIIG), a leading provider of claims management and consultancy solutions to the United Kingdom (the "UK") insurance profession, reports to the market today on two successful private placings (the "Placings"), a significant new contract win with another top 10 insurer and a positive outlook for the year to 31 December 2012 ("FYE2012").

The Placings

The Company announces Placings totaling GBP130,000 from:

-- Hawk Investment Holdings Limited ("Hawk"), a Guernsey based investment holding company

owned by serial investor Bob Morton;

-- John French, Executive Chairman of the Company; and

-- Spread Trustee Company Limited, on behalf of The French Settlement.

Under the terms of the Placings, Hawk has subscribed GBP100,000 for 25,000,000 new ordinary shares of 0.1p each in the capital in the Company ("Shares") at a price of 0.4p per share, increasing its holding to 73,000,000 Shares, representing approximately 20.9 per cent. of the issued share capital of the Company ("Issued Share Capital"). Spread Trustee Company Limited, on behalf of The French Settlement, has subscribed GBP30,000 for 7,500,000 Shares at 0.4p per share, increasing its holding to 11,648,308 Shares representing approximately 3.33 per cent of the Issued Shares. Following the Placings, John French will be interested in 15,253,078 Shares, representing approximately 4.36 per cent. of the Issued Share Capital. This is split between 11,648,308 Shares held by Spread Trustee Company Limited, on behalf of The French Settlement and 3,604,770 Shares held by John French.

Furthermore, the board of directors of the Company (the "Board") announces the purchase of an unsecured convertible loan note of GBP30,000 due 21 November 2015 (the "Loan Note") by John French and Spread Trustee Company Limited, on behalf of The French Settlement, taking their total investment under the Placings and the Loan Note to GBP60,000. The Loan Note has a conversion price of 0.55 pence per Share.

Proceeds from today's Placings and the Loan Note will be used as working capital to support the Company's recent new contract wins.

New business

Further to a major contract with a leading property and travel insurer for its Verify product announced in September 2011, the Company is pleased to announce it has signed a further two-year agreement with an existing client, a top 10 UK insurer (the "Agreement").

Under the terms of the Agreement, the Company has been engaged to provide technical claims support to this leading industry client across its motor and household insurance divisions. The Company will implement an innovative framework agreement that will see implant teams being insourced into the client's operations at times of significant weather events or high claims volumes. The Agreement will provide a flexible resourcing model going forward for business as usual claims.

Strong outlook

The Company has seen steady recovery over the three-year period since the Board realignment and during arguably challenging macro-economic times, witnessing a turnaround from losses of approximately GBP1.3 million for the year ended 31 December 2008 to an unaudited half-year profit for the six months to 30 June 2011 of GBP25,000.

The Company has achieved this through new business gains and product development and from a debt-free position. Prospects for the year to 31 December 2011 indicate the Company will maintain a positive cash position, with the impact of new business gains providing a basis for a beneficial start to FYE2012.

The Company enters FYE2012 with a strong prospective business pipeline and the ability to offer a complete end-to-end package to insurers. The Board remains firm in its view that the sector will look at innovative and proven providers such as the Company to deliver cost containment and improved services in volatile market conditions.

Given the fact that Hawk is a substantial shareholder and John French is a director of the Company, the Placings and issue of the Loan Note are considered to be related party transactions pursuant to Rule 13 of the AIM Rules for Companies. The Company's directors, having consulted with the Company's nominated adviser, Allenby Capital Limited, consider that the terms of the Placings and of the Loan Note are fair and reasonable insofar as the Company's shareholders are concerned.

Commenting, John French said:

"I am encouraged by the steady improvement in the performance of Resources in Insurance Group and in particular the prospects for the future, based on the interest we are receiving for services from the insurance sector. The support we have received from shareholders has been greatly appreciated and is reflective of the fast turnaround of the Company in the last 24 months. I am pleased that at a time of uncertainty with the euro and the European Union in general, the Company has the benefit of dealing in sterling with a client-base comprising leading UK based insurers.

"Furthermore, we are delighted to have secured additional work that cements an already excellent relationship one of our top 10 UK insurance clients. It is an innovative approach that ensures the already excellent levels of customer service our client delivers to their customers is further protected at time of "surge". There are answers to both the surge issue and the need for flexible operating models in the claims arena. A number of clients are actively engaged with Resources in Insurance Group around this provision within both insurers and service providers and we anticipate some further announcements shortly. For the Company it is a significant step forward in the strategic positioning of our insource claims handling products."

Following the Placings, the Issued Share Capital consists of 349,995,709 Shares. The Company does not hold any Shares in treasury. Therefore the total number of Shares in the Company with voting rights is 349,995,709. This figure may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Issued Share Capital under the Financial Services Authority's Disclosure Rules and Transparency Rules.

ENQUIRIES:

 
 Resources in Insurance Group       Tel: +44 7836 
  plc                                722482 
 John French 
 
 Allenby Capital Limited            Tel: [phone] 
                                     5656 
 Nominated Adviser and Joint 
  Broker 
 Brian Stockbridge/Alex Price/Dan 
  Robinson 
 
 Rivington Street Corporate         Tel: [phone] 
  Finance                            3384 
 Joint Broker 
 Dru Edmonstone 
 

For further information on the Company, please visit www.riig.co.uk

This information is provided by RNS

The company news service from the London Stock Exchange

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