MHG.L Regulatory News (MHG)

28 February 2012

Merchant House Group plc("MHG" or "the Group")(LSE: MHG.L)

Issue of Equity

Placing, Director Shareholding & Conversion of Loans

MHG, the financial services group, announces that it has issued 1,213,412,693 new ordinary shares of 0.01 pence each pursuant to a placing for cash and conversion of loans (the "New Ordinary Shares"). Further details are provided below.

Placing

MHG has issued 1,087,857,139 new ordinary shares of 0.01 pence each at a price of 0.07 pence each raising £761,500 (before expenses) with new and existing investors (the "Placing").

The proceeds of the Placing will be used by MHG to support the growth and development of the business.

Director Shareholding

Included in the Placing, James Holmes and Christopher Day, who are directors of MHG, have each subscribed for 7,142,857 new ordinary shares. Subsequent to the Placing, their resultant shareholdings are as follows:

Conversion of Loans

MHG has agreed with providers of loans totalling £95,422.22 to issue 125,555,554 new ordinary shares of 0.01p at a price of 0.076 pence per share.

Application has been made for the New Ordinary Shares to be admitted to trading on AIM which is expected to occur on or around 2 March 2012. 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.

Following the admission of the New Ordinary Shares, the so enlarged issued share capital of the Group will comprise 3,951,361,460 ordinary shares of 0.01 pence each.

Christopher Day, CEO of Merchant House Group plc, said:

"The Group has been in discussion with a number of teams and the bulk of these funds may assist in attracting these new teams who we believe will add significant revenue to the Group."

For further information: