MHG.L Regulatory News (MHG)

Merchant House Group Plc ("Merchant House" or the "Company")

18 February 2010

Issues of Equity

Merchant House announces that it has today issued in aggregate 56,683,868 new ordinary shares of 0.01p each in the capital of the Company ("New Shares"). Of the New Shares, 15,000,000 have been issued at an effective price of 0.15p per share ("First Tranche Shares"). The First Tranche Shares are being issued to Westward Consultants Limited ("Westward") who have introduced and worked on business for Merchant Capital, the wholly owned FSA registered subsidiary of the Company valued at some EUR 255,000 including some EUR 200,000 of listed shares. The Company agreed in November 2009 that amounts which became payable to Westward under the arrangement described above could be settled, at the option of Merchant House, in cash or through the issue of new Ordinary Shares in Merchant House at a price per share of 0.15p. The Board has decided, in order to conserve cash, to satisfy amounts owed to Westward through the issue of the First Tranche Shares.

Of the remaining New Shares, 41,683,868 have been issued at an effective price of 0.2p per share ("Second Tranche Shares"). The Second Tranche Shares are being issued to Liberty Capital Limited ("Liberty Capital") who have provided £100,000 of additional regulatory capital in cash to Merchant Capital Limited ("Merchant Capital") in order to maintain the EUR 635,000 of net shareholder funds required by the Irish Financial Regulator to enable Merchant Capital to act as a Financial Promoter as outlined in a previous announcement. The Directors believe that securing this investment at this time is crucial to maintaining Merchant Capital's status and therefore allowing clients to sign up and begin paying fees.

Liberty Capital currently holds 16,666,667 shares equivalent to 12.09 per cent. of the current issued share capital of the Company. Liberty Capital, due to the size of its shareholding, is a 'related party' for the purposes of the AIM Rules for Companies ("AIM Rules"). For this reason, the issue of the Second Tranche Shares is a related party transaction under the AIM Rules. The Directors consider, having consulted with Shore Capital and Corporate Limited, the Company's Nominated Adviser, that the terms of this related party transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Application has been made today for the 56,683,868 new Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 25 February 2010.

As a result of the issue of the New Shares, the issued share capital now comprises 194,554,016 Ordinary Shares. There are no shares in treasury and there is no other class of share in issue which has voting rights. Consequently the Company's total number of voting rights is 194,554,016 and this figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the FSA's Disclosure and Transparency Rules.

Following the issue of the New Shares, Liberty Capital Limited has notified the Company that it has a holding of 58,350,535 Ordinary Shares equivalent to 29.9 per cent. of the enlarged issued share capital of the Company and Westward has notified the Company that it has a holding of 15,000,000 Ordinary Shares equivalent to 7.71 per cent. of the enlarged issued share capital of the Company.

Ends.

Enquiries:

Merchant House Group Plc

Martin Eberhardt

Tel: 020 7332 2200

Shore Capital and Corporate Limited

Pascal Keane

Tel: 020 7408 4090