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Ludgate Environmental Fund completes investment

28 May 2008

of £4 million in environmentally responsible packaging company. Ludgate Environmental Fund Limited ("LEF" or the "Fund") has completed its investment of £4 million into Rapid Action Packaging Limited ("RAP" or the "Company"). RAP specialises in the design, manufacture and supply of innovative, ergonomic, cost effective and environmentally responsible packaging systems particularly for the "food on the move" marketplace. LEF has invested £4 million into RAP; £1.5 million in ordinary shares and £2.5 million in Convertible Unsecured Loan Stock ("CULS"). This investment is part of a wider placing of £6.125 million (the "Placing") comprising £2 million of ordinary shares and £4.125 million of CULS. The 3 year CULS carry an 8% p.a. coupon payable semi-annually in arrears and are convertible into ordinary shares of RAP. LEF led the Placing and was joined by two co-investors who are current shareholders in LEF and also by Joint Funding Partners Limited, an existing shareholder in RAP. The funds raised from the Placing have been used to refinance loan capital in the Company and to accelerate RAP's next stage of growth with a strong focus on further expansion of the Company's international business. Nick Pople, Director of Ludgate Investments Ltd, LEF's Investment Adviser, has joined the Board of RAP. About Rapid Action Packaging Limited: RAP designs and manufactures award winning, innovative, cost effective and environmentally responsible packaging solutions. Product design, sales and administration and production are based in the Republic of Ireland (Donegal) and the UK with the Company's UK head office in London. The Company also licenses the production and sale of certain products to third parties in Korea, Malaysia and the US. RAP's unique packaging solutions combine the benefits of both paper and film technologies to improve packaging as a vital tool in sales growth for food retailers whilst also putting a strong emphasis on environmental performance and responsibility. All RAP's products are available in fully compostable and biodegradable materials. Raw materials are sourced sustainably and the design of RAP's finished products not only leads to raw material 'source reduction' but also, through their flat-pack form ensures that distribution and storage have a lower environmental impact. RAP's current customers include most of the large supermarkets companies and some of the world's leading quick service restaurant companies. Established in 1997 to exploit the packaging design innovations of founder, Julian Money, RAP has experienced rapid growth in recent years. Turnover has increased in 2007 by some 40% to £11million, mainly in the UK, and RAP is now trading on a profitable basis. Similar rates of growth are being experienced in Asia where RAP licenses production and distribution to third parties. In the US RAP has recently agreed the terms for the manufacture and distribution of certain of its products. Nick Pople, Director of Ludgate Investments Ltd, LEF's Investment Adviser said: "Food packaging is an integral and essential part of the supply chain protecting goods from damage, allowing efficient transport distribution, offering convenience, prolonging shelf-life, informing the consumer and helping promote goods in a competitive market place. However, it is also now seen as a leading contributor to waste streams. It is estimated that in the UK alone over 5 million tonnes of food industry packaging enters the waste stream every year. " "Driven by consumer demand, corporate responsibility considerations, current media attention and legislative changes, the food packaging market is now experiencing a significant shift in demand away from plastic to more environmentally responsible materials. Packaging reduction has also become a key initiative for the food and grocery sector. RAP has already established itself as a leading provider of innovative packaging solutions and is well positioned to benefit from these current market drivers." Graham Williams, CEO of RAP, said: "We are delighted to receive this investment from Ludgate Environmental Fund which recognises the significance of our product innovation in the food packaging arena and the vast market opportunities available to us. Combined with our current internal rate of growth, this investment will enable us to accelerate our programme of product development and extend our customer reach beyond the markets of Europe, Asia and sub-saharan Africa." "We are hugely excited to be working with a new partner who recognises the very substantial advantages that our products offer customers who are increasingly determined to contribute to the worldwide debate concerning sustainability and environmental responsibility. Our products deliver a responsible solution. They also offer customers a range of high visibility packaging solutions to help them stand out in an increasingly crowded consumer environment." About Ludgate Environmental Fund: Ludgate Environmental Fund is a Jersey domiciled closed-ended investment company, listed on AIM. The Fund was launched in August 2007, raising £26.7 million at listing. A further £3.0 million was raised by the Fund in February 2008. The Environmental/Cleantech sector is characterised by products and services which optimise the use of natural resources while reducing environmental impact in ways that enhance economic value. Opportunities include: energy efficiency and alternative energy sources including renewable energy; water treatment and management; waste management and resource recovery; industrial process advances; and emission reduction technologies. LEF was launched to enable experienced and sophisticated investors to participate in a diverse portfolio of investment holdings in Environmental/Cleantech companies. LEF believes that there are a number of key drivers of growth, both in terms of business and investment activities, within this sector including: increasing demand for, and decreasing supply of, natural resources; rising concern over the economic costs of waste accumulation and pollution; growing awareness of environmental issues amongst the public; and environmental technology advances in recent years. The Fund's Investment Adviser, Ludgate Investments Limited, has significant experience and a successful track record of investing in and helping to build companies within this sector. Website: www.ludgateenvironmental.com





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