Disposal of Flex Bank

RNS Number : 2905B

Aurora Russia Limited

03 March 2014

 

3 March 2014

Aurora Russia Limited

Disposal of Flex Bank

Aurora Russia Limited (the "Company" or "ARL") announces that it has completed the sale of Flexinvest Limited ("Flexinvest"), the ARL subsidiary in Cyprus which owns OJSC Flexbank ("Flex Bank"). 

The consideration for the disposal was RUR189.1 million (approximately £3.2 million) in cash plus, as part of the sale, mortgages with a nominal value of RUR144.2 million (approximately £2.4 million) held by Flex Bank which have been transferred to ARL's wholly owned subsidiary Kreditmart Finance Limited ("KFL").

Net of transaction costs, cash proceeds will be RUR172.2 million (approximately £2.9 million).

The mortgages transferred to KFL will be on-sold in due course in the open market, subject to any discounted value that may result on their sale.

These combined assets were held in the books of Flexinvest at £6.3 million as at 30^th September 2013. The Rouble has depreciated by 12% from RUR52/£ to RUR59/£ since 30^th September 2013 which has impacted the value of the transaction to the Company.

Given current market conditions in Russia for banking assets, the recent withdrawal of several banking licences by the Central Bank of Russia and the likely need for ARL to provide further capital to Flex Bank over the course of the next year, the Company  has not been in a strong position to achieve a sale at Net Asset Value.

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. The immediate quantum available for distribution will in part depend on the amount of assets and cash that will need to be retained in KFL in the immediate term. The Board and the Manager are in discussions currently on the possible disposal of KFL and its assets and will assess whether it is better to retain these assets or dispose of them immediately. This will in large part depend on the discount required to on sell the assets.

 Commenting on the disposal, Gilbert Chalk, Chairman of Aurora Russia, said:

"The sale of our stake in Flex Bank is in line with the Company's strategy to dispose of its investments at the best values it can achieve for shareholders. The Board continues to examine multiple options for exits from our remaining portfolio companies, to achieve maximum value for our shareholders."

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.

Enquiries:
Aurora Russia Limited
Gilbert Chalk	[phone]
Numis Securities Limited
Nominated Adviser: Hugh Jonathan	[phone]
Corporate Broking: Rupert Krefting / Nathan Brown
FTI Consulting Jack Hickey
	[phone]

 

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