Aurrigo Regulatory News (AURR)

Aurora Russia Limited

22nd February 2013

Disposal of OSG Records Management

Aurora Russia Limited (the "Company" or "Aurora Russia") and Elbrus Capital announce that they have entered into a sale and purchase agreement relating to OSG Records Management ("OSG") for up to US$47.8 million (£30.3 million*).

OSG is the leading document storage and records management company operating in Russia, Poland, Kazakhstan, Ukraine and some other Eastern European countries.

The agreed total cash consideration to be received by Aurora Russia is up to US$47.8 million (£30.3 million) before transaction costs. US$34.1 million (£21.6 million) is payable to the Company on Closing, free and clear of any warranties, except as to title.

A further US$8.5 million (£5.4 million) will be settled to an escrow account with Deutsche Bank in London.

1) 50% of this amount (US$4.25 million or £2.7 million) is payable 30 days following signing of the 31 March 2013 year end accounts should they reflect management's expectations of EBITDA, net debt and working capital which were provided to Elbrus Capital during due diligence;

2) The remaining US$4.25 million is payable 12 months following Closing subject to any warranty claim under the general commercial and tax warranties.

The final US$5.2 million (£3.3 million) of the purchase price will be paid as long as OSG achieves EBITDA of over US$10.0 million (£6.3 million) for the year ending 31 March 2014. The amount payable under this earn-out arrangement will be reduced to zero in the event the EBITDA for the year ending 31 March 2014 is less than US$ 9.0 million Elbrus Capital have binding obligations to run OSG and account for the EBITDA in the same way as Aurora has over the last several years.

The total purchase price for OSG represents a prospective enterprise value** multiple of between 9.0x and 9.8x EBITDA for the year ending 31 March 2013 (expected to be £3.9 million) dependent on the actual EBITDA achieved for the year ending 31 March 2014. OSG reported a Loss before Tax for the year ended 31 March, 2012 of £315,000

The NAV of Aurora Russia's investment in OSG at 30 September 2012 was £29.9m and the total purchase price represents 101.3% of this value, equivalent to 27p per Aurora Russia share

It is intended that the Closing will occur in early March 2013.

As announced previously, the Board had agreed to prepare OSG to be demerged from Aurora Russia and admitted to trading on the Alternative Investment Market of the London Stock Exchange in the first half of this year. However, a disposal for cash provides more certainty than a demerger and the Board considers a private sale to Elbrus Capital the optimum way to realise maximum value for shareholders.

In accordance with its stated policy, the Board intends to distribute the proceeds of realisations to Aurora Russia shareholders. The method by which proceeds will be returned to Aurora Russia shareholders, the timing of the distributions and the quantum will be determined by the Board and a further announcement will be made in due course.

Commenting on the disposal, Geoff Miller, Chairman of Aurora Russia, said:

"The successful sale of our stake in OSG is an indication of the value in our portfolio companies and investor interest in high quality CIS companies. The Board continues to examine multiple options for exits from our remaining portfolio companies, to achieve maximum value for our shareholders."

Alexander Savin, Managing Partner of Elbrus Capital, commented on the deal:

"We are delighted to acquire OSG Records Management, the leader of the document storage and records management market in Russia and the CIS. The company is poised to capitalize on the economic growth in Russia and a broad trend toward outsourcing of non-core business functions. We look forward to supporting the management team in executing its growth strategy".

About Aurora Russia

Aurora Russia Limited is the AIM-quoted investment vehicle established to make equity or equity-related investments in small and mid-sized private companies in Russia.

About Elbrus Capital

Elbrus Capital is a leading private equity business in Russia and the CIS founded by Dmitri Krukov, Alexander Savin and Robert Thielen, who bought out Renaissance Private Equity division from Renaissance Group in 2009.  Elbrus Capital manages two funds with total assets of over US$600 million. The fund's core investor base is major international institutional investors.

* Exchange rate used $1.58/£1.00

**Enterprise Value for the transaction is $60.8 million (£38.5 million) which comprises net debt of $10.9 million (£6.9 million), management options of $2.1 million (£1.3 million) and equity of $47.8 million (£30.3 million)