MHG.L Regulatory News (MHG)

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

24 March 2010

Issue of Equity

Merchant House announces that it has today agreed to issue 50,000,000 new ordinary shares of 0.01p each in the capital of the Company at a price of 0.5p per share ("Placing Shares" or the "Placing") in cash to Liberty Capital Limited ("Liberty Capital") raising in total £250,000 for the Company. The net proceeds from the issue of the Placing Shares will be used for general working capital purposes.

Liberty Capital currently holds 23,350,535 shares equivalent to 12.0 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 Placing Shares is a related party transaction under the AIM Rules. The Company announced on 15 March 2010 that Liberty Capital had notified it that following a sale of shares, its holding in Merchant House was reduced to 12.0 per cent. from 29.9 per cent. of the current issued share capital of the Company (the "Share Sale"). The Share Sale took place at a price of 0.5p per share. 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 Placing Shares to be admitted to trading on AIM and dealings are expected to commence on 30 March 2010.

As a result of the issue of the Placing Shares, the issued share capital now comprises 244,554,016 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 244,554,016 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 Placing Shares, Liberty Capital's holding in the Company will be 73,350,535 Ordinary Shares equivalent to 29.99 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