Notice of Cancellation

RNS Number:0962C
Aquilo PLC
14 August 2007

                    Aquilo plc ("Aquilo" or the "Group") 

       Notice of Cancellation of Admission of Shares to Trading on Aim 

On 3rd August 2007 the Group released an announcement indicating that it was
considering the possibility of cancelling the admission of its shares to trading
on AIM. This announcement provides formal notice of the intention of Aquilo to
seek such cancellation, the rationale for so doing and the process by which the 
cancellation may be effected. 


Rationale for cancellation 

As stated in the announcement of the final results of the Group for the year to
31 December 2006 made on 29 June 2007, the Group suffered severe losses in 2006.

Following the disposal of the motor services division of the Group in December
2006 and the restructuring of the business shortly thereafter, which was approved
by the extraordinary general meeting held on 15 January 2007, the Group consists
primarily of the business of ITS, the IT equipment claims handling and
replacement operation, acquired in June 2006, and AIRS, the household repair and
claims handling operation established in the second half of last year as a start
up. Despite the restructuring of the Group and the continued growth in AIRS
since then, the working capital needs of the Company means it requires ongoing
shareholder support. 

As noted in the announcement made by the Company on 3 August 2007, Aquilo has
received an approach for the business of ITS, which may or may not lead to that
business being sold. This approach, if accepted, would also involve the sale of
the Group's interest in ABS, the Group's general household goods claims handling
business. Whilst final terms have not been agreed, the Directors believe that
disposal would be in the best interests of the Group, since by doing so they
would materially reduce the working capital requirements of the Group and be
able to utilise proceeds to repay Group debt. Moreover, such a step would
substantially reduce the financing costs of the business, inter alia, by
eliminating the costs of the VPV cash collateralisation facilities, details of
which were announced on 20 June 2007. This would no longer be needed by the
Group following the disposal of ITS and ABS. 

In the event that the disposal of ITS and ABS occurred, the Group would
substantially constitute only the business of AIRS. This business has been
successful in winning contracts for the conduct and management of insurance
claims under household insurance policies and has grown significantly since it
was launched. However, it still represents an early stage business which at
present does not provide sufficient profits and cash flows to cover the costs of
the rest of the Group. Whilst this situation continues to improve as the AIRS
business grows, on current management projections it would not be able to
sustain current Group overheads until Quarter 4 2007. 

As announced on 3 August 2007, the Directors are currently engaged in discussions
with the major shareholders of the Group, and specifically certain of the
shareholders who backed the restructuring of the Group in January 2007,
regarding the provision of additional financial support for the Group.
Shareholders should be aware that the terms and amount of such additional
support are still to be agreed.   

The Directors, having consulted with the major shareholders, believe that it is
in the best interest of all the shareholders to reduce overheads as much as
possible and that the benefits no longer outweigh the substantial costs inherent
in the admission of its shares to trading on AIM. These include the regulatory
and advisory costs of the facility, the additional personnel costs involved in
corporate governance requirements for AIM and costs related to the disclosure
requirements. 

Moreover, the Directors consider that maintaining the quote for the shares no
longer serves a useful function in terms of access to capital or the ability to
utilise the shares of the Company to effect acquisitions, given the current
circumstances of the Group. To the extent that any further changes in the
structure and funding of the Group are required, consequent on its new strategy,
the Board believes these would be materially easier to carry out as an unquoted
company. 

The Directors have accordingly concluded that it is in the best interests of
shareholders that the admission of Aquilo's shares to AIM be cancelled. 


Process of cancellation 

Under the rules governing AIM, cancellation of admission to AIM can only be
effected by a company after the securing of a 75% vote in favour by those
shareholders voting in general meeting, and the expiration of a period of twenty
business days from the date on which notice of the possible cancellation of
admission is given. In addition, a period of at least five business days
following the approval of the cancellation of admission of the shares to AIM is
required before that cancellation may be put into effect. 

Accordingly, notice is hereby given today of the intention of Aquilo to cancel
the admission of its shares to trading on AIM. The notice for the AGM of Aquilo
sent to shareholders today, includes a resolution seeking permission to effect
this cancellation as soon as possible. 

Since the AGM of the Company is due to be held on 6th September 2007, the
cancellation of trading would occur on 14th September 2007, assuming that the
resolution referred to above is passed as a Special Resolution at the AGM.

For further information please contact: 

Chris Langridge, Chairman, Aquilo plc   Tel: 020 3008 5511 
John Riddell, Noble & Company Limited   Tel: 020 7763 2226












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