Schedule 1 - Palace Capital Plc

ANNOUNCEMENT TO BE MADE BY THE AIM APPLICANT PRIOR TO ADMISSION IN ACCORDANCE WITH RULE 2 OF THE AIM RULES FOR COMPANIES ("AIM RULES")

COMPANY NAME:

Palace Capital plc

COMPANY REGISTERED OFFICE ADDRESS AND IF DIFFERENT, COMPANY TRADING ADDRESS (INCLUDING POSTCODES) :

41 Chalton Street

London

NW1 1JD

COUNTRY OF INCORPORATION:

England and Wales

COMPANY WEBSITE ADDRESS CONTAINING ALL INFORMATION REQUIRED BY AIM RULE 26:

www.palacecapitalplc.com

COMPANY BUSINESS (INCLUDING MAIN COUNTRY OF OPERATION) OR, IN THE CASE OF AN INVESTING COMPANY, DETAILS OF ITS INVESTING POLICY). IF THE ADMISSION IS SOUGHT AS A RESULT OF A REVERSE TAKE-OVER UNDER RULE 14, THIS SHOULD BE STATED:

Following the Board's review of potential opportunities, the Company has entered into the

Acquisition Agreement to acquire Hockenhull Estates (subject to Admission and certain other conditions) for a consideration of £1,817,500. Hockenhull Estates owns the freehold interest in nine commercial properties located in Crewe and Nantwich, Cheshire which are let under fourteen individual leases and have an aggregate value as at 6 July 2011 of £2.015 million.

The Company is proposing to raise £523,500 (approximately £273,545 net of expenses) by the issue of up to 23,266,666 new Ordinary Shares through the Placing at 2.25p per Placing Share.

The Company has also arranged a secured debt financing of Hockenhull Estates through the provision of a bank facility by the Lender for £1,200,000 until 30 September 2014. The total facility will be drawn down in full on Admission. It is intended that immediately following drawdown, the total sum of the Facility will be loaned by Hockenhull Estates to Palace Capital and will be used to finance part of the Acquisition.

Stanley Harold Davis, Rachel Rita Davis and NSS Trustees Limited a/c IRG (the trustees of the IRG PLC Directors Retirement and Death Benefit Scheme of which Stanley Davis is the sole beneficiary), have conditionally agreed to subscribe for convertible loan notes issued by the Company to a value of £300,000 on the terms of the 2011 Convertible Loan Agreement. The 2011 Convertible Loan Notes are convertible into Ordinary Shares at 2.25 pence per Ordinary Share. Interest of 4 per cent. will be payable quarterly on the outstanding 2011 Convertible Loan Notes.

In addition, Stanley Davis, has agreed conditionally to loan £277,500 to the Company by way of an unsecured mezzanine loan under the terms of the Mezzanine Facility Agreement. The Mezzanine Facility is available until 4 October 2015 with interest only payments being due quarterly in arrears.

In view of the size of Hockenhull Estates relative to the Company, the Acquisition will constitute a reverse takeover of Palace Capital under the AIM Rules for Companies and therefore requires the prior approval of Shareholders which is being sought at a General Meeting.

DETAILS OF SECURITIES TO BE ADMITTED INCLUDING ANY RESTRICTIONS AS TO TRANSFER OF THE SECURITIES (i.e. where known, number and type of shares, nominal value and issue price to which it seeks admission and the number and type to be held as treasury shares):

7,215,956 Existing Ordinary Shares of 1 pence each

24,377,777 new Ordinary Shares Placing Shares of 1 pence each at 2.25 pence per share

Enlarged Share Capital on Admission will be 31,593,733 Ordinary Shares of 1p each.

No shares will be held in treasury and there are no restrictions on the transfer of ordinary shares.

CAPITAL TO BE RAISED ON ADMISSION (IF APPLICABLE) AND ANTICIPATED MARKET CAPITALISATION ON ADMISSION:

Gross Placing proceeds of £523,500

Market capitalisation of the Company at the Placing Price on Admission £0.71 million

PERCENTAGE OF AIM SECURITIES NOT IN PUBLIC HANDS AT ADMISSION:

54.98%

DETAILS OF ANY OTHER EXCHANGE OR TRADING PLATFORM TO WHICH THE AIM COMPANY HAS APPLIED OR AGREED TO HAVE ANY OF ITS SECURITIES (INCLUDING ITS AIM SECURITIES) ADMITTED OR TRADED:

None

FULL NAMES AND FUNCTIONS OF DIRECTORS AND PROPOSED DIRECTORS (underlining the first name by which each is known or including any other name by which each is known):

Stanley Harold Davis, Non-executive Chairman

Ronald Neil Sinclair, Managing Director

Anthony Charles Dove, Non-executive Director

FULL NAMES AND HOLDINGS OF SIGNIFICANT SHAREHOLDERS EXPRESSED AS A PERCENTAGE OF THE ISSUED SHARE CAPITAL, BEFORE AND AFTER ADMISSION (underlining the first name by which each is known or including any other name by which each is known):

Before Admission

After Admission

NAMES OF ALL PERSONS TO BE DISCLOSED IN ACCORDANCE WITH SCHEDULE 2, PARAGRAPH (H) OF THE AIM RULES:

None

(i) ANTICIPATED ACCOUNTING REFERENCE DATE

(ii) DATE TO WHICH THE MAIN FINANCIAL INFORMATION IN THE ADMISSION DOCUMENT HAS BEEN PREPARED (this may be represented by unaudited interim financial information)

(iii) DATES BY WHICH IT MUST PUBLISH ITS FIRST THREE REPORTS PURSUANT TO AIM RULES 18 AND 19:

(i) 31 January

(ii) 31 January 2011

(iii) 31 October 2011 (interims for six months to 31 July 2011), 31 July 2012 (final results for year ending 31 January 2012) and 31 October 2012 (interims for six months to 31 July 2012)

EXPECTED ADMISSION DATE:

4 October 2011

NAME AND ADDRESS OF NOMINATED ADVISER:

Fairfax I.S. PLC

46 Berkeley Square

Mayfair

London

W1J 5AT

NAME AND ADDRESS OF BROKER:

Fairfax I.S. PLC

46 Berkeley Square

Mayfair

London

W1J 5AT

OTHER THAN IN THE CASE OF A QUOTED APPLICANT, DETAILS OF WHERE (POSTAL OR INTERNET ADDRESS) THE ADMISSION DOCUMENT WILL BE AVAILABLE FROM, WITH A STATEMENT THAT THIS WILL CONTAIN FULL DETAILS ABOUT THE APPLICANT AND THE ADMISSION OF ITS SECURITIES:

The Admission Document containing full details about the applicant and the admission of its securities will be available during normal business hours from the offices of Fairfax I.S. PLC, 46 Berkeley Square, Mayfair, London W1J 5AT and from the Company's website www.palacecapitalplc.com.

DATE OF NOTIFICATION:

8 September 2011

NEW/ UPDATE:

New