MHG.L Regulatory News (MHG)

2 September 2011

MERCHANT HOUSE GROUP PLC

("MHG" or "the Company")

(LSE: MHG.L)

ISSUE OF EQUITY

MHG, the financial services group, is pleased to announce that it has issued 400,843,744 new ordinary shares of 0.01 pence per share in the Company ("New Ordinary Shares") pursuant to the following:

- 208,500,000 New Ordinary Shares to Willow International Limited ("Willow") (held by Pershing Nominees Limited)`at a price of 0.05 pence per share pursuant to conversion of £104,250 of the New Convertible Loan Notes* ("NCLNs") issued by the Company to Liberty Capital Limited, which subsequently transferred £104,250 of loan principal to Willow, a company domiciled in the Seychelles ("Conversion Issue").

Following the Conversion Issue, there are now £171,750 of NCLNs in issue, all of which are held by Liberty Capital Limited;

- 3,403,652 New Ordinary Shares to holders of 2005 Loan Notes* at an effective price of 0.1588 pence per share in accordance with the loan conversion adjustment terms contained in the proposals approved by shareholders at the Company's general meeting held on 31 August 2010 ("Adjustment Issue").

Following the Adjustment Issue, there is no change to the loan principal in respect of 2005 Loan Notes, which remains at £160,200 and

- 188,940,092 New Ordinary Shares to Barnard Nominees Limited at a price of 0.1085 pence per share in settlement of £205,000 of loans made by MD Barnard & Co on behalf of underlying investors ("Loan Settlement Issue").

Following the Loan Settlement Issue, there are now £90,000 of loans made by MD Barnard & Co outstanding.

* as defined in the circular sent to shareholders on 3 August 2010 and, in the case of NCLNs, as approved by shareholders at the general meeting of the Company held on 31 August 2010

The Conversion Issue, Adjustment Issue and Loan Settlement Issue are conditional on the admission to trading of the New Ordinary Shares, for which application has been made for the admission to trading on AIM which is expected to occur on or around 7 September 2011. The New Ordinary Shares, which will be issued fully paid, will rank pari passu in all respects with the existing ordinary shares of the Company.

As a result of the issue of New Ordinary Shares, the total number of voting rights as at 7 September 2011 will increase to 2,737,948,767. This figure should 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, allotment and admission of the New Ordinary Shares, the following shareholders will, where known, be interested in three per cent. or more of the enlarged issued share capital of the Company as follows:

Enquiries

About Merchant House Group Plc

Merchant House Group is a new form of corporate banking and financial services group that uses its intellectual capital, agility and mercantile ability to challenge competitors' conventional approach and deliver a high level of service to its clients. This new approach is allied to strong risk management and corporate governance controls on a sound capital footing to enable the group to realise its full potential.

Merchant House Group plc is a London Stock Exchange AIM-listed holding company.

For further information about Merchant House Group and its corporate finance, investment and private client services divisions, please visit the company website at www.merchanthousegroup.com.