Further Investment in OSG

RNS Number : 1461P

Aurora Russia Limited

19 March 2009

 



19 March 2009

Aurora Russia Ltd to invest a further $1m in OSG Records Management Group to finance growth

Aurora Russia Limited (the 'Company' or 'Aurora Russia'), the AIM-quoted investment vehicle established to make equity or equity-related investments in small and mid-sized private companies in Russia, announces that it will invest a further $1m in OSG Records Management Group ('OSG RM Group'), to finance further capital expenditure, primarily for warehouse racking to meet growing storage demand.

The Company and OSG RM Group have agreed a $1m convertible loan facility ('Facility'). The Facility will provide the Company with an option to convert the outstanding principal and accrued interest at a pre-agreed valuation. Aurora Russia has invested £7.7m in OSG RM Group, (£6.0m in equity investment and £1.7m in the form of a convertible loan facility).  Aurora Russia's equity stake in the company currently amounts to 39.4 %; should it chose to convert the outstanding £1.7m convertible loan facility and the further $1m convertible loan announced today, it would increase its equity stake to approximately 50%. 

Following this investment, Aurora Russia will hold approximately £4.65m of cash and cash equivalents, excluding £8.0m of cash in Kreditmart. 

Commenting on the investment, James Cook, Director of Aurora Russia Limited, said:

'OSG RM Management is the market leader in records management in Russia, Ukraine, and Kazakhstan and continues to grow strongly as the records management market in Russia meets increasing demand. We believe that OSG RM Management will continue to remain largely protected from the economic downturn and the additional capital provided will enable OSG RM Group to strengthen its presence in its core markets and secure further market share.'

Enquiries:

Aurora Russia Limited

James Cook                   [phone]

John McRoberts             [phone]

Investec Investment Banking

Patrick Robb                 [phone]

Martin Smith                  [phone]

FD

Ed Gascoigne-Pees     [phone]

Alex Boycott                 [phone]

OSG Records Management Group

OSG is the largest records management company in Russia, Ukraine and Kazakhstan. It is the second largest in Poland and is considered a regional market leader. OSG continues to provide cost-effective total records management, document storage, data security, document scanning and confidential data destruction solutions.

As of 30 September 2008, OSG posted year to date revenues of $12.3 million (up 61% for the same period last year). In 2007, OSG posted revenues of US$10.6 million up from US$8 million in 2006 and just under US$5 million in 2005.

OSG expects the records storage market to be somewhat protected from the economic downturn by archiving laws and a need for companies in the current environment to outsource their records management to achieve greater efficiencies through cost and staff reduction. OSG expects to continue to grow strongly in 2009 with a focus on margins and reducing its operating costs particularly those related to warehousing efficiencies. OSG estimates its current market share in Russia of outsourced document storage is over 60%. In Russia, the company's largest market, OSG estimates that the document outsourcing market still represents less than 5% of the total available market.

Aurora Russia

Aurora Russia floated on the Alternative Investment Market of the London Stock Exchange on 24 March 2006. Aurora Russia Limited is a listed investment company on the London Stock Exchange. It was established to acquire interests in small and mid-sized private companies in Russia which are focused on the financial, business and consumer services sectors where there is a potential for growth together with viable exit opportunities within two to four years.

The Company provides its investors with exposure to high growth companies in Russia and its investee companies with the necessary capital to continue to expand and develop. Its aim is to substantially increase the value of our investments for ultimate trade sale or stock market listing. 

Aurora Russia Investment Advisors

Aurora Russia Limited is managed by Aurora Investment Advisors Limited which was set up by James Cook and John McRoberts. They have 24 years combined investment and operational experience working with over 120 growth and mid-sized companies operating in Russia. The management team brings value to investee companies through its operational expertise and a proven track record for selling Russian companies to strategic buyers and bringing them to public markets. 

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