Foresight VCT plc - VCT Merger

Foresight VCT plc

Merger Update

The Boards of Foresight VCT plc and Keydata Income VCT 1 plc and Keydata Income
VCT 2 plc (together "the Companies") today announce that, following the merger
talks announcement on 19 May 2010, terms for the merger of the Companies have
been agreed between their respective Boards.

The merger requires the approval of the Companies' shareholders and HMRC and
would be effected pursuant to a scheme of reconstruction under s.110 of the
Insolvency Act 1986 whereby the assets and liabilities of Keydata Income VCT 1
plc and Keydata Income VCT 2 plc (the Keydata VCTs) would be transferred to
Foresight VCT plc in consideration for the issue of Foresight VCT plc ordinary
shares directly to the shareholders of the Keydata VCTs. A merger effected on
this basis would be outside the City Code on Takeovers and Mergers.

For the purposes of the merger the underlying value of the assets owned by the
Keydata VCTs is considered to be made up of two component parts: the physical
valuation of the assets (mainly engines and gasification equipment in storage
and cash at bank) and the future operational value of the assets once they are
generating electricity and potentially inputting to the National Grid.

In recognition of both the current physical valuation and future operational
value of these assets, it is proposed that the proceeds of the merger for the
Keydata VCTs' shareholders should be satisfied in two tranches:

  * Initially, on the date of the merger, ordinary shares in Foresight VCT plc
    will be issued to Keydata VCT shareholders based on a physical valuation of
    the Keydata VCTs assets at that time; and

  * Further entitlement to additional ordinary shares in Foresight VCT plc
    shares will be granted as deferred consideration to Keydata VCTs'
    shareholders. This deferred consideration will be issued after 30 September
    2013 giving sufficient time for the plant to be built and the assets to
    achieve necessary performance milestones, on which the deferred
    consideration payment is dependant.

The Board of Foresight VCT believe that the above structure recognises the
execution risks that Foresight VCT plc will be assuming as a consequence of the
proposed merger and the current and potential value of the assets of the Keydata
VCTs.

Foresight Group, the Companies' investment manager, has secured commitments from
Foresight VCT plc and other funds managed by Foresight Group to invest a further
£3 million in the project which reflects their confidence that a successful
outcome can be achieved.

The Companies expect to convene general meetings to vote on the proposals during
October 2010 and full details of the terms of the proposed merger will be
published in the coming weeks.



John Gregory
Chairman
Telephone: [phone]
Email:[e-mail]
1 September 2010



For further information please contact:
Gary Fraser, Foresight Group: 01732 471800


[HUG#1441842]








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Source: Foresight VCT PLC via Thomson Reuters ONE