12th Sep 2006 07:04
Aurora Russia Limited12 September 2006 12 September 2006: embargoed for 7.01am Aurora Russia Limited Maiden Interim Results 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 its maiden interimresults for the period from its incorporation on 22 February 2006 to 30 June2006 "(the Period"). Operational highlights • Successful AIM listing and raising of £75 million (before expenses) on 24 March 2006 • First two investments since listing have been made: • $9.4 million acquisition of stake in OSG Records Management group of companies in July • £12.5 million investment to launch Kreditmart, a mortgage and consumer finance broker, announced separately today• Key hires made in May 2006 of Andrey Gurin and Oleg Bystranov as investment officers by Aurora Investment Advisors Limited ("AIA"), the Company's manager Financial highlights • Profit before tax for the Period £0.17 million • Basic earnings per share 0.23p for the Period • Cash and cash equivalents as at 30 June 2006 of £71.2 million • Net asset value at 30 June 2006 £71.7 million, representing 95.6p per share Commenting, Sir Trevor Chinn, Chairman of Aurora Russia, said: "Aurora Russia's entry into Russia has been met with a great deal of interest bythe Russian market. The Company was the first private equity investment vehiclefocusing on Russia to be listed on AIM. During the first quarter of operations, much progress was made by the Company'smanager in developing a strong pipeline of potential transactions and carryingout due diligence on a number of investment opportunities. We have continued towitness strong growth in the Russian economy and expect the strong growthfundamentals to remain for the rest of 2006 and beyond. The Board expects thatby the time we publish our full year results, we will be further invested inexciting growth companies in Russia." Enquiries: Aurora Russia LimitedJames Cook, Moscow +7 495 580 9749John McRoberts, London +44 20 7484 4028 Financial Dynamics +44 20 7831 3113Giles SandersonSvetlana Fedyunin Chairman's Statement Aurora Russia Limited ("Aurora Russia" or the "Company") was incorporated inGuernsey in February 2006 and listed on AIM in March 2006 having raised £75million (before expenses) through a placing of ordinary shares at £1 per share.These results reflect the period from incorporation to 30 June 2006. In the period ending 30 June 2006, Aurora Russia recorded a net profit of£173,096 or 0.23p per share. The net asset value at the end of the period was£71.7 million or 95.6p per share and cash stood at £71.2 million or 94.9p pershare. Much progress has been made by the Company's manager, Aurora InvestmentsAdvisors Limited ("AIA"), in developing a strong pipeline of potentialtransactions and carrying out due diligence on a number of investmentopportunities, including those outlined in our Admission Document. John McRoberts and James Cook have been joined at AIA by two InvestmentOfficers; Andrei Gurin and Oleg Bystranov. Andrei has extensive experience infinance and is the former Finance Manager for Eastern Europe for GE. Mostrecently, he held the position of Financial Controller & Treasurer of DeltaBank, GE's banking subsidiary in Russia where he had worked closely with JamesCook. Oleg joined from Northstar Corporate Finance after a successful career incorporate finance in Russia, with positions at Altium Capital in Moscow, wherehe worked closely with John McRoberts, and ABN AMRO. Aurora Russia's entry into Russia has been met with a great deal of interest bythe Russian market. Aurora Russia was the first private equity investmentvehicle focusing on Russia to be listed on AIM. It therefore provides itsinvestee companies with exposure to institutional investors in London. Due tothe increased popularity among Russian companies to seek a listing in London, aninvestment by Aurora Russia is being seen as a first step in this process. Investment in OSG Records Management On 24 July 2006, Aurora Russia successfully completed its first investmentpaying US$9.4 million (£5.1m) for 40.31% of the common shares of Whitebrooks,the parent company of the OSG Records Management Group. A management optionscheme has been agreed and is currently being implemented, resulting in AuroraRussia's shareholding being 37.1% on a fully diluted basis. OSG RecordsManagement is considered the regional market leader in records management,providing cost-effective total records management, document storage, datasecurity and confidential data destruction solutions. OSG Records Management isthe largest operator in Russia (the majority of its business is in Russia),Ukraine and Kazakhstan, with a presence in Poland, Bulgaria, China and Turkey.OSG Records Management, which entered the Russian market in 1998, estimates thatit currently controls more than 70% of the formal outsourced records managementmarket. We hope that it will continue to grow turnover at a rate of over the50% per year that it experienced from 2000 to 2005. Aurora Russia has hedged the sterling cost of this investment using a forwardforeign exchange contract and will continue to review the need for hedging itsinvestment positions. Investment to launch Kreditmart In accordance with our original plans, we have today separately announced ourcommitment to invest £12.5 million to launch Kreditmart. Kreditmart will be afinance company distributing mortgages, home equity loans and other consumerfinance services products in Russia through a network of loan shops, internet,bank partners and real estate agents. It plans to establish 10 loan shopscovering seven regions in Russia by the end of 2007 and to build a book ofmortgage assets. A strong management team has been put together which has asuccessful track record for building similar operations in the mortgage andconsumer finance sectors in Russia. James Cook, who was previously Chairman and CEO of GE Consumer Finance inRussia, will serve as Chairman. James' previous track record includes thesuccessful launch and roll-out of both DeltaCredit (sold to Societe Generale in2005) and DeltaBank (sold to GE Consumer Finance in 2004). Fund administration The Board has agreed to release the second tranche of the management fee in theamount of £500,000 to AIA that was mentioned in the Admission Document and whichwas subject to the Board's discretion. AIA holds an option (the "Option") entitling it to a 20 per cent carry in thefuture returns generated for shareholders provided that the total return on theordinary shares when compared to the placing price (£1 per share) has increasedby at least 12 per cent. per annum from the date of the Company's admission totrading on AIM until the date of exercise of the Option. During the process of reviewing the value of the Option during the preparationof these financial statements, it was determined by the Board that an amendmentto the Option deed was required in order to correctly reflect the terms of theOption as set out above and as presented to investors at the time of theplacing. Outlook Since March, the Company has continued to witness strong growth in the Russianeconomy. Annual GDP growth of 6%, higher oil prices and growing reserves, earlyrepayment of the Paris Club debt, and lower domestic interest rates are allfactors which should continue to support growth in the Russian economy. Weexpect the strong growth fundamentals in the Russian economy to remain for therest of 2006 and beyond. The Board is confident that AIA will continue its excellent work as our managerand expects that by the time we publish our results for the period ended 31December 2006, we will be further invested in exciting growth companies inRussia. Sir Trevor Chinn Chairman of the BoardAurora Russia Limited AURORA RUSSIA LIMITED Income StatementFor the period from incorporation on 22 February 2006 to 30 June 2006 £ Administration and operating expenses 677,256 Operating loss for the period (677,256) Bank interest receivable 850,352 Finance income 850,352 Profit before tax 173,096 Tax - Net profit for the period 173,096 Earnings per share - Basic 0.23p AURORA RUSSIA LIMITED Balance SheetAs at 30 June 2006 £Current assetsTrade and other receivables 601,219Cash and cash equivalents 71,226,350 71,827,569 Total assets 71,827,569 Current liabilitiesTrade and other payables 114,460Total liabilities 114,460 Net assets 71,713,109 EquityShare capital 750,000Share premium account -Special reserve 70,790,013Revenue reserve 173,096Total equity 71,713,109 Net asset value per share 95.6p AURORA RUSSIA LIMITED Cash flow statementFor the period from incorporation on 22 February 2006 to 30 June 2006 £Cash flows from operating activitiesOperating loss (677,256)Adjustments for:Increase in operating trade and other receivables (601,219)Increase in operating trade and other payables 114,460 (1,164,015) Interest received 850,352 Net cash outflow from operating activities (313,663) Cash flows from financing activitiesProceeds from issue of ordinary share capital 75,000,000Issue costs (3,459,987) Net cash inflow from financing activities 71,540,013 Net increase in cash and cash equivalents 71,226,350 Opening cash and cash equivalents -Closing cash and cash equivalents 71,226,350 AURORA RUSSIA LIMITED Notes to the Interim Financial StatementsFor the period from incorporation on 22 February 2006 to 30 June 2006 1. Share capital 30/06/06 £ Authorised share capital: 200,000,000 Ordinary Shares of 1p each: 2,000,000 Issued share capital: 75,000,000 Ordinary Shares of 1p each: 750,000 2. Statement of changes in equity Share Share Premium Special Retained Capital Account Reserve Earnings Total £ £ £ £ £Issue of ordinary sharecapital, net of issue costs 750,000 70,790,013 71,540,013 Conversion of share premium account (70,790,013) 70,790,013 - Net profit for the period 173,096 173,096 At 30 June 2006 750,000 - 70,790,013 173,096 71,713,109 3. Share premium 30/06/06 £ Premium arising on issue of ordinary shares 74,250,000 Transaction costs on issue of ordinary shares (3,459,987) Conversion to special distributable reserve (70,790,013) Balance as at 30 June 2006 - On 5 April 2006 the Royal Court of Guernsey confirmed the reduction of thecapital by way of cancellation of the Company's share premium account. Theamount cancelled has been credited as a distributable reserve. 4. Special reserve 30/06/06 £ On conversion from share premium 70,790,013 Balance as at 30 June 2006 70,790,013 The special reserve is a distributable reserve to be used for all purposespermitted under Guernsey company law, including the buy back of shares and thepayment of dividends. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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