Merger

The Ethical AIM VCT plc Merger plans 30 October 2007 The Board of The Ethical AIM VCT plc announces that it has agreed head of terms with two other VCTs, also managed by Rathbone Investment Management Limited, with a view to merging the three companies together. The proposals are for the Company to merge with Pennine Downing AIM VCT plc and Pennine Downing AIM VCT 2 plc by way of a "Scheme of Reconstruction" using a relative net asset basis for each company to create one larger VCT. This should produce a significant reduction in running costs as well as other benefits. The proposed transaction will require Shareholder approval. Formal documents are currently being prepared and are expected to be sent out to Shareholders within the next few weeks. ---END OF MESSAGE---