Investment in Indian Township 31 October 2006 07:03 as posted on http://www.pennysharesonline.com/Announcements/Articles/888918.asp

Eredene Capital PLC31 October 2006Eredene Capital PLCAnnounces third investment in Indian real estate•To invest approximately £2.75m for 35% stake in an integrated residentialtownship in Indore, Madhya Pradesh StateEredene Capital PLC (Symbol: ERE), the AIM quoted Indian real estate investor,is pleased to announce it has made its third investment in Indian real estate.The Company has invested approximately £2.75m (Indian Rupees 233m) for a 35%stake in a Special Purpose Vehicle (SPV) to develop an integrated residentialtownship located in a prime site on the outskirts of the city of Indore inMadhya Pradesh State.

The township will be situated on a 100 acre site located off the main Agra-Bombay National Highway and next to the proposed MR-3 arterial road in thearea of Bijalpur, some 6 km from the centre of the city of Indore. The sitebenefits from direct access to the city centre and airport.

The site is also onthe route between Indore and the 2,600 acre Special Economic Zone (SEZ) atPithampur, which is one of the hubs for industrial activity in Madhya PradeshState.The development will be a self-contained fully integrated township and isintended to include residential houses and apartment buildings as well aseducational, medical, retail and entertainment facilities for the use ofresidents.

It is anticipated that the project will involve the development andsale of up to 3600 residential units and the development and sale of up to 700residential land plots. Construction of the project is expected to commence inQ2 2007 with a phased completion and with sales expected to commence in 2008.The project is scheduled for completion in 2011.Eredene's primary joint venture partner in the SPV is Entertainment WorldDevelopers Private Limited (EWDPL), an Indian real estate development companyheaded by Manish Kalani. EWDPL was incorporated in 1999 to develop and constructshopping malls, multiplex cinemas, hotels and large scale residential townships.Manish Kalani has a considerable track record in retail and residential propertydevelopment in Indore and elsewhere in India.

In early October 2006, Eredeneannounced a large mixed-use development in Indore to be developed in partnershipwith EWDPL.Saffron Capital Advisors Limited sourced, evaluated and advised on thistransaction. Saffron has a highly experienced and talented team specialising inIndian real estate investments in the retail, commercial and residentialsectors.

Eredene and Saffron entered into an Investment Advisory Agreement inApril 2006.Following this investment, Eredene will have invested approximately £13.63m ofthe £57.1m (then equivalent to approximately US$100m) that it raised in April2006. Accordingly, Eredene has invested approximately 24% of the fund that itraised in April 2006.

Commenting on the Company's latest investment Alastair King, Founder and ChiefExecutive of Eredene, said:"We are very pleased to announce our third investment. This again demonstratesour ability to deploy Eredene's capital in potentially valuable investments inIndia's tier 2 and 3 cities where we believe long-term growth and value lies.

We have now committed approximately 24% of the funds raised in our April 2006fund-raising and we intend to continue to invest in projects which representgood opportunities for Eredene."IndoreIndore is the largest city in Madhya Pradesh State in central India. It has apopulation of over 1.2 million (as per 2001 census) and is well known as thecommercial capital of the state.

The city is located approximately 524km from Mumbai and approximately 674km from New Delhi, and is well connected by rail,road and air to other cities in India.The project lies close to Pithampur, referred to as the "Detroit of India",which is one of the largest automobile manufacturing centres in Asia and is hometo leading automotive companies such as Bajaj, Eicher, Hindustan Motors, KineticHonda and Bridgestone. Indore has the first green field Special Economic Zone inIndia and is one of the largest manufacturing locations in Asia for basic andbulk drug formulations. The city has a number of educational institutesincluding an Indian Institute of Management.

Enquiries to:
EREDENE CAPITAL plc
www.eredene.com
Alastair King
Tel: 020 7929 4501

REDLEAF COMMUNICATIONS
Tel: 020 7822 0200

Emma Kane/Duncan McCormick/Samantha Robbins
SEYMOUR PIERCE
Mark Percy/Jeremy Porter
Tel: 020 7107 8000

Notes to Editors:

- In April 2006, Eredene raised US$100 million to capitalise onthe foreign direct investment opportunity in the Indian real estate sector.- When the capital raising was announced, it was the first of itskind on the AIM market of the London Stock Exchange.- This investment is the third investment to be announced byEredene. Eredene announced its first investment in September 2006 and secondinvestment in early October 2006. Following this investment, Eredene will haveinvested approximately £13.63m into real estate projects in India, beingapproximately 24% of the total funds raised in April 2006.

- Investments are made with the benefit and assistance of SaffronCapital Advisors Limited (Saffron), one of the leading India-based real estateadvisory specialists. Headed by Ajoy Kapoor and Rohin Shah, Saffron has a highly experienced and talented team specialising in Indian real estate investments in the retail, commercial and residential sectors. Eredene and Saffron entered into an Investment Advisory Agreement in April 2006.

- Eredene focuses on real estate opportunities in Tier 2 (above 1million population) and Tier 3 (500,000 to 1 million population) cities inIndia. It specialises in investing in commercial, retail and residentialproperty outside major cities to avoid overheated markets.

- Eredene trades on AIM, ticker ERE, and is currently capitalised at approximately £73.4 million.- Eredene recently announced the appointment of Charles Cayzer asa Non-Executive Director. Charles Cayzer is also a director of CaledoniaInvestments plc, where he has responsibility for its real estate investments.

- Publication quality photographs are available from Redleaf Communications.- Further information on Eredene is available from the website: www.eredene.com