Merchant House Group PLC Company Update, Annual Report, TVR, Adviser Change (8584I)

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RNS Number : 8584I

Merchant House Group PLC

31 July 2012

Merchant House Group plc

("MHG" or the "Company")

Company Update, Annual Report, Total Voting Rights and

Change of Adviser and Broker

The Company is pleased to update shareholders on recent developments.

The directors are pleased to confirm the appointment of Allenby Capital Limited as the Company's Nominated Adviser and Broker with immediate effect.

Further to the announcement of 26 June, the audit of the annual accounts for the financial year ending 31 December 2011 continues although the late start due to the challenges in the business previously reported means that the annual report is now expected to be published in the second half of August. The directors anticipate that when the annual accounts have been published, the suspension of trading on AIM in the Company's ordinary shares will be lifted. Combined with the fundraising, appointing a new custodian and a strengthened board already announced, this will successfully conclude the short-term goals following a challenging six months. The whole team has worked hard in difficult circumstances to reach this point.

The Company is beginning to see the benefits of all this and the confidence shown by Beia Capital Limited ("Beia Capital") and Beia Investment Partners LLP ("Beia LLP") as we focus again on growing the businesses while controlling costs and seeking to build shareholder value. The directors can further announce that advanced discussions are taking place to secure subscriptions for the GBP1.35 million non-convertible loan notes announced on 26 June and that Beia Capital has agreed to subscribe for the balance not taken up in two tranches: up to GBP675,000 on 15 August 2012 and up to GBP675,000 on 28 September 2012. The secured five year loan notes will be transferrable and carry a coupon of 14% per annum payable semi-annually.

Further to the announcement on 26 June, the application for approval from the Financial Services Authority for Beia LLP's GBP400,000 equity investment is in progress and the directors are unable to anticipate when a decision will be forthcoming. In the meantime therefore, Beia LLP has provided a GBP400,000 unsecured, interest free loan facility in addition to the GBP250,000 convertible loan notes already subscribed for. The GBP400,000 loan facility constitutes a related party transaction under the AIM Rules for Companies due to James Keane and Stephen Drew being directors of MHG and members of Beia LLP. The independent directors, being James Holmes, Christopher Day and Martin Eberhardt, having consulted with the Company's nominated adviser, Allenby Capital Limited, consider that the terms of the loan facility are fair and reasonable insofar as the Company's shareholders are concerned.

As stated above, recent positive developments allow the directors to focus efforts on continuing the strategy to build a successful and diverse financial services business. Initiatives the directors anticipate completing in the near future are the launch of an important private equity fund, the launch of a corporate offering for Merchant House Financial Services taking it into a new and exciting sector and the further development of our structured products offering into new European markets. In connection with these initiatives, a number of additional appointments are expected to be made and shareholders will be updated in due course. The Company will also be able to update shareholders in more detail as part of the annual report expected to be published next month.

Issue of Equity and Total Voting Rights

Application has been made to the London Stock Exchange for the admission to trading on AIM of the 86,666,666 new ordinary shares in MHG due to Beia Capital as a corporate finance fee in relation to the fundraising (as detailed in the announcement on 26 June) and their admission is expected to take place on 3 August 2012.

Following the issue of these shares, the Company will have in issue 4,690,361,459 ordinary shares of 0.01p each with voting rights. The Company holds no shares in treasury. Therefore the total number of voting rights in the Company will be 4,690,361,459.

Director disclosure

The following information falls to be disclosed pursuant to rule 17 of the AIM Rules for Companies: James Holmes was a non-executive director of a non-trading investment holding company, LM Logisitics Group Limited, from 20 November 2009 to 11 March 2010, as an investor representative until it became an operating company and which went into administration in August 2010.

For further information:

 
 Merchant House Group plc 
  James Holmes, Chairman 
  Christopher Day, CEO           +44 (0) 20 3544 4793 
 
 Allenby Capital Limited 
  Jeremy Porter / James Reeve    +44 (0) 20 3328 5656

This information is provided by RNS

The company news service from the London Stock Exchange

END

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