Sealegs announce a number of significant developments

For Immediate Release Tuesday 20th December 2016 A change in the name of the Company to Future Mobility Solutions Limited The Company intends to change its name to Future Mobility Solutions Limited as soon as practicable. Following the proposed acquisitions further detailed below, the Board believes the new name will better reflect the multi-brand portfolio of the Company and the intended expansion and development of its business, including the recent focus on the supply of amphibious systems to a range of boat builders globally. A further announcement confirming the timing of the name change will be released when that is determined. Proposed Acquisition of controlling interest in Sillinger The Company has entered into a conditional agreement for the acquisition of a controlling interest of 70% in S.A.S Sillinger ("Sillinger") from Groupe Marck for a price of Euro 2.1 million. The consideration payable would be satisfied as to Euro 1.5 million in cash and as to Euro 600,000 through the issuance of new Sealegs shares to Groupe Marck at a price of NZ$0.25 cents per share. Sillinger is headquartered in France and manufactures and sells a wide range of crafts under the Sillinger and Rafale brand names worldwide with a particular focus on France and its overseas territories. Sillinger is a world leading RIB manufacturer specializing in the military and defence sectors. In its most recent audited financial year to 31st December, 2015 it achieved a turnover of Euro 4.3 million and generated a normative EBITDA of Euro 200,000. Proposed Acquisition of controlling interest in Gemini The Company has also entered into a conditional agreement for the acquisition of a 50.1% stake in Gemini Marine ("Gemini") for a price of USD1.5 million. The consideration payable is intended to be satisfied by the issue of new Sealegs shares to the owners of Gemini at a price of NZ$0.25 cents per share. Established in 1979 and based in Cape Town, South Africa, Gemini designs and manufactures a wide range of RIBs and inflatable boats for the world's rescue, military and patrol entities including the National Sea Rescue Institute (NSRI) of South Africa, the NSW Water Police, Royal New Zealand Navy, United Nations, Australian Defense Force, Olympic Security, African Union, Australian Federal Police, Australian Special Emergency Services and the Singapore Special Forces. In its most recent audited financial year to February 2016, Gemini achieved a turnover of Rand 46.8 million, and an EBITDA of Rand 3.5 million. By making the acquisitions, the Company believes it will significantly increase the breadth and type of its potential customers. In particular, both Sillinger and Gemini are strong in the military and defence sectors and have a wide customer base with government and other commercial organizations in their respective territories. In many instances, sales to government and other similar commercial enterprises are dependent on home content rules and these acquisitions will enhance the ability of the Company to compete for those mandates and opportunities. This also represents an enhanced opportunity to increase the range of products and systems the Company sells into those markets which it believes is complementary to the current product lines of Sealegs craft. The board also believes that Gemini, with its strength in the Southern African continent Indian Ocean and the UK, Sillinger, which has a primary focus on the French, European and North and West African markets and Sealegs, which has a particular strength in the Asia Pacific markets, provide a compelling complementary geographic footprint. Agreements remain conditional Shareholders should note that the acquisition of the controlling stakes in both Sillinger and Gemini are subject to a number of conditions. In respect of Sillinger, the conditions include, inter alia: completion of satisfactory due diligence; receipt of French regulatory and legal approvals; and, agreement of the final sales and purchase contract and shareholders agreement. In respect of Gemini, the acquisition is conditional on, inter alia: completion of satisfactory due diligence; receipt of South African regulatory approvals; and, agreement of the final sales and purchase contract and shareholders agreement. Accordingly, each of the proposed transactions may or may not complete either as intended or at all. Accordingly, shareholders are advised to exercise caution when considering trading the Company's shares. Subject to the satisfaction of the conditions in each agreement, Sealegs currently anticipates that these acquisitions will complete around the end of the Company's financial year. The Company will provide further update announcements as appropriate but, in any event, upon each of the agreements becoming unconditional. Proposed cash funding of Sillinger Acquisition The cash consideration due pursuant to the acquisition of the controlling stake in Sillinger will be met through a combination of the internal cash resources of the Company together with the proceeds of a proposed placing of new Sealegs shares ("Placing Shares"). The issue of the Placing Shares will be contingent on the successful completion and closing of the acquisition of Sillinger. The Placing Shares and the shares to be issued by the Company pursuant to the Sillinger and Gemini transactions will be issued pursuant to the Company's annual share mandate. The intention of the Company to seek a listing for the Company's shares on an additional Stock Exchange The Company has decided to seek a further listing for the Company's shares on an additional Stock Exchange in Europe due to two principal factors. Firstly, both the vendors of Sillinger and Gemini require a listing for the Company's securities in a time zone more convenient to them. Additionally, it is the belief of the Board that such a listing will provide an increased potential investor base to support the Company's development and will better reflect the enhanced international profile of the business, both now and in the future. It is further noted that a majority of the Company's issued capital is held by investors located outside New Zealand. Further details of this additional listing will be given in due course, but it is presently intended that such further listing will be undertaken within the next two years. Board Composition Following the acquisition of controlling stakes in Sillinger and Gemini, the Board considers it is necessary to reflect the changed scope of the business of the Company in both its Board and senior management. The Board of the Company will accordingly be composed of Eric Series, Mark Broadley, Christopher Weir and Wayne Mapp. David McKee Wright and Roy Noura have resigned from the Board of the Company. Management Alignment In order to fully align the interests of senior management with those of the vendors following the acquisitions, the Board intends to seek shareholder approval for the issue of further new shares, at a price of NZ$0.25 cents per share, to provide for appropriate management incentives. Further details will be provided to shareholders in due course. Eric Series, Chairman said: "Today's announcement is an exciting new chapter for the company. These first acquisitions will immediately accelerate our vision to become a mobility solutions orientated group which is dynamically expanding into new markets, new territories and new products including drones and sea structures. Total boat production will rise to over 400 units per year and the group will have operations based in Auckland, Cape Town and Paris. Furthermore, we are proud this expansion has come in the form of deals with Sillinger and Gemini, both of which are highly respected brands and world leaders in their field." For further information, please contact: David McKee Wright +64 282777444 -end End CA:00294643 For:SLG Type:GENERAL Time:2016-12-20 13:23:02