PALACE CAPITAL PLC

Related Party Transaction • Sep 2, 2013

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RNS Number : 9371M

Palace Capital PLC

02 September 2013

Palace Capital plc ( "Palace Capital" or "Company")

Potential reverse takeover transaction

and

related party transactions

In line with its stated strategy, and as referred to in the preliminary announcement dated 5 July 2013, the Board of Palace Capital can now confirm that it is at an advanced stage of negotiations to acquire a property company owned by Quintain Estates & Development PLC at an agreed purchase price of approximately £40 million. To finance the acquisition, Palace Capital intends to raise approximately £23.5 million of new equity and it has also received credit committee approval from a UK lender for a facility of £20 million.

Due to the size of the proposed transaction relative to the Company, it will be treated as a reverse takeover and, in order for the proposed transaction to proceed, it will require shareholder consent and for the enlarged issued ordinary share capital of the Company to be admitted to AIM. The Company's ordinary shares have been suspended from trading on AIM pending the publication of an admission document.

In order to help fund the costs of the proposed transaction, on 27 June 2013 and 2 August 2013, Stanley Davis, Non-Executive Chairman of Palace Capital, loaned the Company £25,000 and £100,000 respectively (the "Loans"). The Loans were made on the same basis as previous loans made by him to the Company in that they are non-interest bearing and they have no defined term for repayment. The Loans do however constitute related party transactions under the AIM Rules for Companies and the directors of the Company consider, having consulted Allenby Capital, the Company's Nominated Adviser, that the Loans are fair and reasonable insofar as the Company's shareholders are concerned.

Shareholders will be kept informed of developments in due course.

-ends-

For further information contact:

Palace Capital Plc	Tel. +44 (0)20 7722 7603
Neil Sinclair, Managing Director
Allenby Capital Limited - NOMAD/Joint Broker	Tel. +44 (0) 20 3328 5656
Nick Naylor, Chief Executive
Mark Connelly, Corporate Finance
Arden Partners plc - Lead Broker and Bookrunner Chris Hardie, Corporate Finance Rob Rees, Corporate Broking	Tel. +44 207 614 5917
Broker Profile	Tel. +44(0) 20 7448 3244
Simon Courtenay

This information is provided by RNS

The company news service from the London Stock Exchange

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