Group Re-Financing Completed Today - 21.7.2009

I am delighted to announce that we have today completed the refinancing of the Vasanta Group, thereby securing the long-term future of the group and its trading subsidiaries, including VOW Europe, Supplies Team and ISA Retail.

This is excellent news for our customers, employees and suppliers, none of whom will be compromised by the terms of the deal.

This refinancing has been led by Endless LLP, an independent private equity house based in Leeds, who, together with management, will now own 71% of the group, with the remaining 29% being owned by key members of our bank lending syndicate.

The refinancing agreement reduces our outstanding bank borrowings from 200m to 50m as well as providing the group with an additional 30m of working capital facilities, which will provide us with all that we may require during these uncertain times for our industry. We continue to have the support of all our lending banks, all of whom have participated in the debt restructuring. Our new strong balance sheet now contains a sustainable and manageable level of debt appropriate to todays circumstances, and puts us in a far more secure financial position than many of our competitors.

The Group Board will consist of myself, continuing as Group CEO, Mark Johnston, Group FD, and Alan Barclay, Chairman.

We have a lot of work to do over the next few days and weeks, as we utilise our improved cash position to increase our stock fill rates and service levels to customers. I am confident that our service levels will soon be back to an industry-leading standard.

We anticipate that our much-strengthened balance sheet and enhanced financial position will enable our suppliers to obtain trade credit insurance on their supplies to the Group in future.

We are pressing ahead with an ambitious investment plan, including commissioning an enlarged Group distribution centre and centralised sales and customer services for VOW, in Yorkshire. This will enable us to complete the final phase of the rationalisation of our infrastructure, which began in September 2008.

I would once again like to thank our customers, employees, suppliers and others in our industry, who have continued to provide overwhelming support and loyalty to us, particularly over the last few days. It is now our job to do our utmost to live up to this and I am confident that we are now well-placed to do so.

Richard Martin Group CEO

Garry Wilson, Managing Partner of Endless LLP, said:

The Vasanta Group is well known to myself and the Endless team from our previous experience within Arthur Andersen and latterly Ernst & Young LLP as advisers to Kingfield Heath. We are delighted to be able to bring new investment to the Group to strengthen its balance sheet and will be working closely with the Board going forward to restore confidence to the Groups customers, suppliers, employees and other stakeholders.