Issue of Equity

Blavod Extreme Spirits PLC
16 January 2007


Blavod Extreme Spirits plc ('the Company' or 'Blavod')

16 January 2007


Blavod Extreme Spirits USA, Inc. Converts Debt


Blavod Extreme Spirits plc (LSE:BES), announced that per the terms of its credit
facility with Laurus Master Fund Limited ('Laurus'), the Company and Laurus have
decided to convert $500,000 worth of the outstanding balance on its credit
facility to equity, at the price of £0.1375 per share. This will result in the
issue of 1,866,908 new ordinary shares at an exchange rate of $1.959.
Consequently, Laurus will hold 2.55 per cent of the diluted share capital.


Under the Takeover Code, the issue of new shares during an offer period is
normally considered to be frustrating action. However, in this instance, the
potential offeror has consented to the debt-to-equity transaction and confirmed
that it does not alter its current minimum offer price of 17.97p per share, as
announced on 28 November 2006.


As announced on 9 June 2006 the provisions of the agreement with Laurus have
conditions attached that restrict Laurus from owning anymore than 2.99 per cent
of the ordinary share capital of the Company, prohibit Laurus from lending stock
or holding a short position in the Company's shares and other provisions that
determine how Laurus may hold those shares that it acquires from time to time.


Tony Murphy, Chief Financial Officer of Blavod commented, 'Converting at this
time gives us flexibility as we approach the year end and move forward into
January.'


As a result of the above transaction, the Company's new issued share capital is
73,246,608 shares.


Dealing Disclosure Requirements


Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any
person is, or becomes, 'interested' (directly or indirectly) in 1% or more of
any class of 'relevant securities' of Blavod, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the 'offer period'
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an 'interest' in 'relevant
securities' of Blavod, they will be deemed to be a single person for the purpose
of Rule 8.3.


Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Blavod by the Company, or by any of its 'associates', must be
disclosed by no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.


A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk .


'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.


Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.


Disclosure in accordance with Rule 2.10 of the City Code:


In accordance with Rule 2.10 of The City Code on Takeovers and Mergers, the
Company confirms that, at the close of business on 12 January 2007, the
Company's issued share capital consisted of 73,246,608 ordinary shares of 1
pence each. The ISIN reference number for these securities is GB0030164023.


Brewin Dolphin Securities Limited ('Brewin Dolphin'), which is authorised and
regulated in the United Kingdom by the Financial Services Authority, is acting
for Blavod and no-one else in connection with the matters referred to herein and
will not be responsible to anyone other than Blavod for providing the
protections afforded to clients of Brewin Dolphin or for giving advice in
relation to such matters.


Enquiries:

Jeff Hopmayer              001 615 771 9111
Blavod

Mark Brady                 011 3241 0129
Keith Williams             011 3241 0186
Brewin Dolphin

Notes to Editors:


Blavod Extreme Spirits plc (LSE: BES), is an international spirits company based
in London with U.S. offices in Franklin, Tennessee.  Formed by the 2003 merger
of Blavod Black Vodka plc and Extreme Beverage Company, Blavod Extreme Spirits
produces and sells its black-coloured vodka, aptly called Blavod, throughout the
world.  BES also produces and sells the award-winning, intensely flavoured line
of Players Extreme vodkas and rums. In the United States, BES is the exclusive
distributor of an elite wine portfolio of fine Italian wines, as well as the
award winning El Diamante del Cielo tequilas.  For more information on the
company, please visit:  www.blavodextreme.com.






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