1st May 2014 10:20
LONDON (Alliance News) - Aurora Russia Ltd saw its shares rise Thursday after it said it would return GBP8.2 million in cash to shareholders by buying up nearly 40% of its shares at 27.5454 pence each, part of its strategy of realising its assets and returning the proceeds.
In a statement, the Russian private equity fund said it would buy up to 29.7 million shares through a tender offer.
It said it would hold on to the rest of its cash reserves, which stood at about GBP9.1 million at the end of March, to cover its working capital needs, expenses for up to two years, and to cover any further investments it may need to make in its two remaining investments - money transfer business Unistream and DIY retailer Superstroy.
The private equity firm is trying to realize all of its assets, but has been hampered by the financial crisis and ensuing economic downturn, and the poor performance of its two remaining assets. Earlier this week, it said would return at least GBP8.25 million to shareholders after it sold its Kreditmart Finance Ltd unit, for about GBP1.7 million. In early March it had sold its Cyprus subsidiary Flexinvest Ltd, which owns OJSC Flexbank, to an unnamed firm in a deal worth GBP3.2 million.
"The board's priority remains to return capital to shareholders through the realisation of its residual investments rather than to make further commitments but further capital may need to be invested in the investee companies in exceptional circumstances," the company said of its decision to retain some capital.
"The board intends to sell the residual assets as quickly as possible within the two year time frame but ... trading conditions remain difficult for the company's investments, in particular in the case of Superstroy," it said.
Aurora Russia shares were up 9% at 24.65 pence Thursday morning, one of the biggest gains on AIM.
By Steve McGrath; [email protected]; @stevemcgrath1
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