Celoxica

©Celoxica 2008. T: +44 (0)1235 863656

News and announcements

8 January 2007

CELOXICA HOLDINGS PLC

(“CELOXICA” OR “THE COMPANY”)

Trading Update, Placing of New Ordinary Shares, Share Re-organisation
and Notice of Meeting

Celoxica Holdings plc (AIM: CXA) - a provider of electronic system level (ESL) design technology for the embedded systems and accelerated computing markets, today provides an update on current trading.

Following its trading update on 31 October 2006, the Company announces today that due to the ESL market continuing to lag behind industry growth forecasts, revenues for the twelve month period to 31 December 2006 are expected to be approximately £3.6 million. This is below expectations and the shortfall in revenue will significantly increase the loss for the period.

As outlined in the announcement on 31 October 2006, the Company is now executing on its strategy of taking full advantage of emerging opportunities in the accelerated computing market. This strategy has three major components:

Business Development: The Company has recently added three new accelerated computing customers to its growing portfolio that targets blue chip companies in the Oil & Gas and Finance industries, bringing the total customers for the year to nine.
Technology Development: The Company will be finalising the latest release of its design software and will also be releasing new accelerated computing products in the first quarter of 2007.
Corporate Restructuring: The Company continues to assess all of its strategic options. A restructuring of the company is presently underway and further announcements on this restructuring will be made in due course.

The Company further announces that it proposes to raise approximately £3 million (before expenses) (the “Placing”) through the issue of 18,756,250 New Ordinary Shares (the “Placing Shares”) at a price of 16 pence per share (“Placing Price”). The Placing Price represents a discount of ● per cent. to the closing mid-market price of ● pence per Existing Ordinary Share on ● January 2007, being the last dealing day prior to the release of this announcement. The Placing Shares will represent approximately 26.7 per cent. of the Company’s Enlarged Ordinary Share Capital.

The Placing Shares have been conditionally placed by Arbuthnot Securities with institutional, trade and other investors. Subject, inter alia, to the passing of the Resolutions at the Meeting on 30 January 2007, Admission and dealings in the Placing Shares are expected to commence on AIM on 31 January 2007. As part of the Placing, certain Directors are subscribing for an aggregate of 187,500 Placing Shares. Certain Directors (and their related parties) and other Shareholders have irrevocably undertaken to vote in favour of the Resolutions in respect of 31,551,366 Existing Ordinary Shares, representing, in aggregate, approximately 61.2 per cent. of the Company’s Existing Issued Ordinary Shares.

As the Placing Price is below that of the nominal value of the Company’s Existing Ordinary Shares, the Company needs to effect the Share Re-organisation.

The Company intends to invest the net proceeds of the Placing on the three components of the accelerated computing strategy with a particular emphasis on the following:

developing applications for existing and new accelerated computing customers:
application specific IP and products for the accelerated computing market, focusing specifically on the finance, oil and gas and bioinformatics application sectors;
strategic partnerships and business development within the accelerated computing market.

Jack Fryer, Chairman commented,

“We believe there is good, medium term growth potential in the Accelerated Computing market where our solutions are now gaining market acceptance. The fund raising has been completed in order for the Company to capitalise on this opportunity. We would like to thank our existing shareholders for their continued support.”