Issue of New Loan Stock

    HILL STATION PLC (THE "COMPANY")                        

        ISSUE OF NEW LOAN STOCK COMPRISING A RELATED PARTY TRANSACTION         


The Board of Hill Station plc ("Board"), the manufacturer of premium branded
and own-label ice creams, today releases the following update.

ISSUE OF NEW LOAN STOCK

On 17 June 2008, the Board announced that it has agreed terms with Cattles
Invoice Finance Limiited for a new invoice discounting facility and that
additional support from shareholders in the form of £500,000 of new Loan Stock
repayable in 6 months has been agreed subject to contract.

The new Loan Stock is necessary following the Company's bankers decision to cap
their invoice discounting facility at £1.1m as previously announced on 2 April
2008.

Accordingly, the Board today announces that it has raised £500,000 by way of an
issue for cash of new six month term convertible loan stock (the "June 2008
Loan Stock") to VCTs administered by Acuity Capital Limited (formerly Electra
Quoted Management Limited) ("Acuity") and VCTs advised by Rathbone Investment
Management Limited ("Rathbones") (together the "VCTs") .

The terms of the June 2008 Loan Stock provide, inter alia, that the Company
shall repay the principal amount together with a 200 per cent. redemption
premium and accruals of interest at a rate of 18 per cent. per annum up to and
including the date six months following the issue of such loan stock.

On repayment of the principal amount, the Company shall issue to the VCTs fully
paid new ordinary shares in the Company equivalent in value to 200 per cent. of
the principal amount (£1 million) at a subscription price to be set by mutual
agreement subject to a maximum price per share being the average of the daily
quoted price in the month prior to repayment of the principal amount and not
less than par value. The issue of such shares would significantly increase the
shareholdings of the VCTs in the so enlarged issued share capital of the
Company.

The VCTs advised by Rathbones and Acuity are currently interested in
315,366,667 ordinary shares and 290,539,031 ordinary shares respectively
representing approximately 13.6 per cent. and 12.5 per cent. of the issued
share capital of the Company. In addition, other clients of Rathbones are
interested in 25,737,490 ordinary shares representing approximately 1.1 per
cent. of the issued share capital of the Company.

The June 2008 Loan Stock agreement also provides the VCTs with the right to
appoint an additional non-executive director to the Board by notice in writing
to the Company.

The loan stock will provide the Company with additional working capital to
support the business over the peak Summer season.

RELATED PARTY TRANSACTIONS

The VCTs, together with their respective underlying funds are substantial
shareholders (as defined in the AIM Rules for Companies) for the purposes of
this transaction.

The subscription of £250,000 by each of the VCTs is a Related Party Transaction
as defined in the AIM Rules.

Where a company whose shares are listed on AIM enters into a Related Party
Transaction, AIM Rule 13 requires the directors of the Company to consider,
having consulted with the Company's nominated adviser, that the terms of the
transaction are fair and reasonable insofar as its shareholders are concerned.

Taking into account the Company's need for additional working capital, the
Directors consider, having consulted with Dowgate Capital Advisers Limited, the
Company's Nominated Adviser, that the terms of the related party transactions
with each of the VCTs are fair and reasonable insofar as the Company's
shareholders are concerned.


Enquiries:

Bill Mapstone, Chairman              Hill Station plc              Tel: [phone] 
Robert Alstead, Finance Director     Hill Station plc              Tel: [phone] 
Tony Rawlinson, Nominated Adviser    Dowgate Capital Advisers Ltd  Tel: [phone]
Charles Cunningham, Broker           FinnCap                       Tel: [phone] 



END