NEWS: £1M of unsecured loane notes 2013

Peel Hotels Plc

Creation of £1,000,000 7% Unsecured Loan Notes 2013

Peel Hotels Plc (the "Company") announces that the Board of Directors of the Company has resolve to create up to £1,000,000 of Loan Notes (the "Loan Notes"), of which £850,000 is now being issued by way of a subscription for £350,000 of Loan Notes by Robert Peel (a Director and substantial Shareholder of the Company, owning 5,496,900 shares - representing 39.2% of the Company) and by way of subscription for £500,000 of Loan Notes by Charles Peel (also a substantial Shareholder, owning 2,608,748 shares - representing 20.3% of the Company).

The funds will be used to meet short-term forecast peak borrowing requirements beyond the Company's agreed Bank overdraft facility.

The Loan Notes, which are unsecured, carry a 7% per annum coupon (payable quarterly) and are repayable as to 50% on 30 June 2013 and as to the balance on 31 December 2013, or earlier in other limited circumstances including certain events of default.  The Loan Notes may also be repaid at any time at the discretion of the Company. 

Robert Peel and Charles Peel, who subscribes to Loan Notes of £850,000, constitutes a related party transaction under the AIM Rules.

Peel Hunt LLP consider the subscription by Robert and Charles Peel for an aggregate £850,000 of the Loan Notes to be fair and reasonable as far as Shareholders are concerned.

PESTE analisys

PEST analysis are important macro-environment factors for directors and managers, which will have an effect on decisions made with in any organisation.

Political - additional VAT 2.5% - unable to recover this from their customers as the economic situation is still extremely challenging.

Economical - all 9 hotels of Peel hotels are based in UK, which along with Europe and rest of the world straggled in past few years by economic downturn.

Socio-cultural - Warm-welcoming feel by the chairman Robert Peel and his brother Charles (own together almost 60% of shares), they are the key to the success this chain, not just for their accounting skills but customers service as well - "everyone must receive the best possible service" - Charles Peel.

Technological - Website is another key to succeed (commerce, promotions, on-line booking, etc.), however they still need to work on better marketing strategies. One thing must be given - throughout the browsing the web pages it felt as rather very honest business.