RNS Number : 1642P
Vyke Communications PLC
12 July 2010

12 July 2010

Vyke Communications plc
  ("Vyke")

The Board of Vyke Communications plc (AIM: VYKE) is pleased to announce that Vyke has entered into a joint venture agreement with Bonjour Europe Limited, a wholly owned UK subsidiary of BLS TEL Holdings LLC, and its affiliates ("Bonjour") relating to the future operations of Vyke (the "Joint Venture Agreement") together with a Warrant Instrument (as defined below) (together the "Agreements"). The Agreements are conditional upon, amongst other things, Vyke's shareholder approval and a circular to Vyke's shareholders will be sent out over the next few days.

Bonjour is part of a group of companies which provide telecommunication products and services across the globe, focusing on the emerging US and international markets for mobile and international calling, managing over one billion minutes annually. The Bonjour group currently has carrier, mobile and distribution operations in the US and Africa and is expanding its reach to Europe through the Joint Venture Agreement. Bonjour intends to use its relationships and market position to expand the reach of the Vyke technology and products and services. More information on BLS TEL Holdings LLC can be found at www.blstel.com/index.html .

The Board of Vyke considers the transaction with Bonjour to be a unique opportunity for Vyke to accelerate its growth and development in existing and new markets. The management team of Bonjour and its affiliates have considerable experience in running telecoms companies both in the US and worldwide and the Board of Vyke believes that, in time, a number of synergies and cost saving measures will be identified and implemented as a result of the relationship.

As described below, the Board of Vyke is optimistic about the transaction with Bonjour and have been able to structure it in such a way that Bonjour is rewarded only upon performance and delivery set out below.

The Joint Venture Agreement provides, inter alia, that Bonjour will utilise its relationships and its experience to assist Vyke with management of its operations and the generation of new synergistic and complimentary revenue streams for Vyke. The Joint Venture Agreement provides Bonjour with a target of generating US$100 million of revenue for Vyke for the 12 months to 30 June 2011 and contributing to the EBITDA of Vyke solely through Bonjour operations during this period in excess of US$1.5 million. In working towards achieving these targets, Bonjour is entitled to utilise such of the assets of Vyke as it considers to be appropriate and Bonjour has also granted Vyke the right to market to and sell services to a list of approximately 800,000 customers who have previously purchased telecommunications products and services from Bonjour's affiliates.

As consideration for Bonjour's services under the Joint Venture Agreement Vyke has entered into a warrant instrument pursuant to which Bonjour has been granted warrants (the "Warrants") to subscribe for such a number of new ordinary shares of 1 penny each in the capital of Vyke as will result in Bonjour being issued with the percentage of issued share capital of Vyke as is shown in column (3) of the table below (calculated on a fully diluted basis taking into account all agreements entered into at or before completion of the Joint Venture Agreement under which Vyke may be required to issue shares to any third party but not any agreements or commitments entered into by Vyke after that date) (the "Warrant Shares") conditional upon the relevant sales revenue and EBITDA targets (subject to various deductions and prepared in accordance with IFRS) for the 12 months following the date of the Joint Venture Agreement shown in columns (1) and (2) respectively of the table below: