Extension re Sale of Turbines

2 December 2011

IPSA Group PLC (AIM:IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces an update in respect of the conditional sale of its four Siemens Westinghouse 701 DU gas turbines.

Further to the announcement on 20 July 2011 (the "July Announcement") that the Company has entered into two turbine sale contracts with Bright Day Pte Limited ("Bright Day") and with Bridgehouse Capital Limited ("Bridgehouse"), the Company announces a delay in completion of the sales of the turbines. The new sales contracts with Bright Day and a member of the Bridgehouse investment group are substantially on the same terms described in the July Announcement.

IPSA also confirms that it has executed a deed of trust whereby all proceeds from these two agreements, including the deposits, will be paid into a trust account to be operated by the Company's two key creditors, Standard Bank PLC and Turbocare SpA.  The contracts have been approved by both of these entities.

As a result of the delays to these negotiations and in respect of the buyers' projects, both transactions are now expected to complete on or before 31 January 2012, a few months later than expected.

In addition, Bright Day has agreed to pay a further deposit of US$2m, and Bridgehouse will effect their agreement through an associated company, Lezayre Holdings Limited.  The buyers' initial cash deposits of US$2m each have been transferred into the trust account, leaving an aggregate balance of US$60 million to be received at completion from the two separate buyers.

The Company confirms that its working capital position will remain extremely tight until both sales have completed, and additional working capital for the intervening period will be required to pay operating expenses and repay the Loan Notes due on 31 July 2011 unless their repayment period is extended.

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