Aurrigo Regulatory News (AURR)

21 Apr 2008 07:01

Aurora Russia Limited21 April 2008 21 April 2008 Aurora Russia Limited's wholly owned subsidiary Flexinvest Limited to purchase Volzhski Universalny Bank Aurora Russia Limited ("Aurora Russia"), the AIM-quoted investment vehicleestablished to make equity or equity-related investments in small and mid-sizedprivate companies in Russia, announces the purchase of 100% of VolzhskiUniversalny Bank ("VUB") through its wholly owned Cypriot holding company,Flexinvest Limited ("Flexinvest"). VUB is currently focused on the retailbanking market and is based in Samara, Russia. As at 31 December, 2007, VUB hadRUR 263 million in assets (approximately £5.66 million) and posted a profit ofRUR 19 million (approximately £0.41 million) for 2007. The total investment of £6.36 million in Flexinvest will be used to purchase VUBfor £4.52 million (RUR 210 million) with the balance of £1.87 million (RUR87million) being invested into the bank to cover post-acquisition infrastructurecosts and fund ongoing operations. The deal has been approved by the CentralBank of Russia. VUB will provide Aurora Russia with a retail banking platformthat will focus primarily on retail mortgages, providing synergies withKreditmart, the loan supermarket owned by Aurora Russia. The acquisition of the banking platform will enable Aurora Russia to increaseits presence in Russia's growing retail financial services market bydistributing VUB's retail products through Kreditmart, Aurora Russia's mortgageand consumer products financial services platform. Kreditmart will offer VUBmortgages, deposits, and other retail products through its distribution networkof 10 loan shops in Russia. James Cook, Director of Aurora Russia Limited, commented: "Given the Russian retail finance market dynamics and growth projections,acquiring a banking platform is a natural investment decision to make. We aregoing to seek to build synergies with Kreditmart as we believe that theacquisition will benefit Kreditmart's strategy to expand its cross-sellopportunities in insurance and wealth management. We will also expand theproduct range of VUB Bank to focus on mortgages and equity release products.This acquisition comes at a time when the mortgage market is set to double insize this year." Sir Trevor Chinn, Chairman of Aurora Russia Limited, commented: "This is the 5th investment that Aurora Russia has made bringing the totalamount invested to over £63 million. VUB will provide Kreditmart with acompetitive advantage in Russia's growing mortgage market and further enhanceAurora Russia's strong foothold in the Russian banking and consumer financesector." Strong growth in the Russian Banking sector The Russian banking sector has demonstrated strong growth for seven straightyears. From 1999 to 2006, the market has seen CAGR of 123% for the retail sector(according to the Central Bank of Russia statistics). However, there stillremains considerable potential. The continuing strong growth of the Russianeconomy and a stable political situation should provide a favorable foundationfor further growth. The low penetration of financial services is already seeingexceptionally high growth rates and attractive profitability. As banking reformsgradually take place and take effect, the significance of the sector within theeconomy is growing and there is a rising and strong demand for banking productsand credits. The Russian retail banking market has been one of thefastest-growing sectors in emerging markets. Enquiries: Aurora Russia LimitedJames Cook, Moscow +7 (495) 644 1662John McRoberts +44 (0) 207 839 7112 InvestecPaul Gray +44 (0) 207 5975176Patrick Robb +44(0) 207 597 5169 Financial DynamicsEd Gasgoine-Pees +44 (0) 207 2697132Felicity Murdoch +44 (0) 207 2697243 Note to editors: Aurora Russia Limited, a London Stock Exchange listed company (LSE AIM: AURR)was established to make equity or equity-related investments in small andmid-sized private companies in Russia. Including its investment in VUB, AuroraRussia has invested a total of £63 million of the £75 million raised in March2006. This includes an equity investment of £5.68 million (39.1% stake) in OSGRecords Management Group, one of the largest records management companies inRussia, Kazakhstan and Ukraine, a £22.5 million investment to launch Kreditmart,a finance company distributing mortgages, equity release loans and otherconsumer finance products, a £10.3 million (26.0% stake) investment in UNIStreamBank, a leading Russian international money transfer company, and a £16.6 (24.3%stake) investment in SuperStroy, one of the leading DIY retailers in Russia. For more information please visit www.aurorarussia.com Kreditmart is the first Russian loan supermarket, founded by Aurora RussiaLimited in September 2006 with an investment of £22.5 million. The "one stopshopping" approach and diversified distribution allows the company to clearlystand out against competition; the experienced team with a track record ofsuccess in similar projects makes it well-positioned for growth. Kreditmart has10 sales branches across Russia in Moscow, St. Petersburg, Omsk, Novosibirsk,Tyumen, Kazan, Rostov, and Yekaterinburg. For more information please visit www.kreditmart.ru VUB Bank was founded in 1994. It is currently focused on the retail bankingsegment, offering small business lending, settlements and cash services, currentand deposit accounts, and consumer loans. The bank holds a complete set ofbanking licenses and has been a member of Russia's Deposit Insurance System(DIS) since 23 December 2004. The bank has one branch in Samara, Russia and 35employees. This information is provided by RNS The company news service from the London Stock Exchange