Aurrigo Regulatory News (AURR)

12 Sep 2006 07:01

Aurora Russia Limited12 September 2006 12 September 2006: embargoed for 7.00am Aurora Russia Limited to invest £12.5 million to launch Kreditmart Aurora Russia Limited (the "Company" or "Aurora Russia"), the AIM-quotedinvestment vehicle established to make equity or equity-related investments insmall and mid-sized private companies in Russia, announces that it will invest£12.5 million to launch Kreditmart, a mortgage and consumer finance brokerage.Following completion of the deal, Aurora Russia will own 100% of Kreditmart,however 15% of the company's shares will be reserved for an employee stockoption plan. Kreditmart is expected to roll-out 10 loan shops covering sevenregions in Russia by the end of 2007 as well as building a book of mortgageassets. Kreditmart will be a mortgage and consumer finance company that acts as a brokerdistributing financial services products in Russia through a network of loanshops, internet, bank partners and real estate agents. Aurora Russia has puttogether a management team with a track record for building similar operationsin the mortgage and consumer finance sectors, including extensive experiencefrom DeltaCredit and GE DeltaBank. James Cook, Director of Aurora Russia Limited and the former Chairman and CEO ofGE Consumer Finance in Russia, will serve as Chairman. Cook's previous trackrecord includes the successful launch and roll-out of both DeltaCredit (sold toSociete Generale in 2005) and DeltaBank (sold to GE Consumer Finance in 2004).DeltaCredit was the pioneer in residential mortgage lending in Russia and is oneof the leading banks for mortgage origination in Russia and GE DeltaBank is theleading provider of VISA credit cards in Russia. Kreditmart's management includes Nicholay Korchagin, formerly of GE ConsumerFinance (DeltaBank) and DeltaCredit where over the past six years he led thedevelopment and roll-out of their mortgage product lines. Korchagin has assumedthe post of General Director of Kreditmart. Also joining the team will besenior management personnel from GE Consumer Finance (DeltaBank) andDeltaCredit. About Kreditmart Kreditmart will be a state of the art broker that will provide consumers with aone stop shop for financial services products including residential mortgages,home improvement loans, home equity loans, consumer loans, auto loans andinsurance. A customer's score will be matched to the best available productbeing offered by Kreditmart's partner banks, realtors and developers. The coreproduct of Kreditmart will be residential mortgages and home equity loans toRussia's emerging middle class. Kreditmart will be providing affordablefinancing options, responsible lending, and the financial opportunities thathome ownership offers to individuals. Kreditmart will distinguish itself from the existing pool of market players bybeing the first in the market to provide a one stop shop for a variety of creditproducts, the best value for the money, and speed and quality of service. Commenting on the investment, James Cook, Director of Aurora Russia Limited,said: "Like DeltaCredit and DeltaBank, Kreditmart will be a pioneer in changing theway consumers in Russia take credit. Consumers will be matched to the best dealin the market without having to shop among dozens of lenders. Kreditmart'sapproach will simplify the process, provide value to its customers and will makecredit accessible to Russia's emerging middle class." Commenting on the investment, Nikolay Korchagin, General Director of Kreditmart,said: "Through multiple channels of distribution, Kreditmart will be able to growmarket share and become a pace setter in the financial services sector. Webelieve that Aurora Russia's investment along with a management team which has aproven track record for this type of operation, will enable us to achieve aleading market position." Enquiries Aurora Russia Limited James Cook, Moscow +7 495 580 9749 John McRoberts, London +44 20 7484 4028 Financial Dynamics +44 20 7831 3113 Giles Sanderson Svetlana Fedyunin Notes to editors: Aurora Russia Aurora Russia floated on the Alternative Investment Market of the London StockExchange on 24 March 2006. The Company has been established to make equity orequity related investments in small and mid-sized private Russian companiesfocused on the financial, business and consumer services sectors where theDirectors of Aurora Russia believe there is potential for growth together withviable exit opportunities within two to four years of making such investments.The Company intends to provide its investee companies with the necessary capitalto continue to expand and develop. Aurora Russia shall provide hands-onoperational support to deliver significant step changes in performance and valuecreation. Aurora Russia will target companies with enterprise values of up toapproximately £100 million and will seek to secure blocking or controllingstakes and board representation. The Company intends generally to take equitystakes of greater than 20% in each portfolio company. It is anticipated thateach equity investment will typically be between £5 million and £25 million. Kreditmart Kreditmart, incorporated as a limited liability company, is a brokerdistributing financial services products in Russia through a distributionnetwork of loan shops, internet, bank partners, and real estate agents.Kreditmart represents a company with the best international practices, based onsuccessful international business models including the team's prior track recordwith DeltaCredit and GE DeltaBank. Kreditmart is incorporated as a limitedliability company and 100% owned by Aurora Russia Limited. This information is provided by RNS The company news service from the London Stock Exchange