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Orchard Furniture (OFU)

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Thursday 10 August, 2000

Orchard Furniture

Issue of Equity

RNS Number:
Orchard Furniture PLC
10 August 2000

Orchard Furniture plc
('Orchard')

Placing of new ordinary shares

Orchard has today placed 200,000,000 new ordinary shares of 0.25p each at a
price of 1p per share with Meldon Limited ('Meldon'), a Guernsey company
controlled by the trustees of the M.A. Rowland Settlement ('the Rowland
Trustees'), to raise £2million of new capital for Orchard.  Meldon has
undertaken not to dispose of any shares in Orchard for six months from the date
of this announcement without the prior approval of the Board of Orchard.

Penlux Limited ('Penlux'), a Guernsey company also controlled by the Rowland
Trustees, has also agreed in principle with Orchard to extend further financing
of up to £10 million in order to finance Orchard's expansion in the future. 
This financing may, at Orchard's option, take the form of either loan capital
(on terms to be agreed at the time) or an underwriting of new ordinary shares in
Orchard at such price as is agreed at the time that such financing is required. 
Any drawing on this facility will be subject to the prior approval of Penlux. 
This commitment will remain available to Orchard for a period of 16 months from
the date of this announcement.

In consideration of providing this commitment, Penlux has been granted a warrant
to subscribe 25 million new ordinary shares in Orchard at a price of 4p per
share, exercisable within 18 months from the date of this announcement.  On
drawdown of the facility, Orchard will issue to Penlux a further warrant to
subscribe up to 75 million new ordinary shares in Orchard at 4p per share,
exercisable by 30 June 2002.  The number of shares under this warrant will be
determined by the amount of the facility utilised.



     

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