Proposed acquisition, Placing and Open Offer

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THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION IN THE PROSPECTUS.

COPIES OF THE PROSPECTUS WILL BE AVAILABLE ON PUBLICATION FROM, INTER ALIA, THE COMPANY'S REGISTERED OFFICE AND WEBSITE: WWW.RAVENRUSSIA.COM

ALL TERMS ARE DEFINED IN THE APPENDIX TO THIS ANNOUNCEMENT UNLESS DEFINED HEREIN.

30 April 2012

Raven Russia Limited ("Raven Russia" or the "Company")

Proposed Acquisition of Pushkino Logistics Park

and

Placing and Open Offer of 48,414,250 New Preference Shares to raise US$104 million

The Company announces that it has today, through its wholly owned subsidiary, Padastro Holdings Limited, entered into a conditional agreement with PLP Holding GmbH to acquire Closed Joint Stock Company "Toros", the owner of Pushkino Logistics Park ("Pushkino"), a Class A logistics complex of approximately 213,000 sq m located to the north east of Moscow, for a cash consideration of US$215 million (the "Proposed Acquisition"). 

The Company further announces that, in connection with the Proposed Acquisition, it is proposing to raise gross proceeds of approximately US$104 million by way of a placing and open offer of 48,414,250 new preference shares at a price of 134p per new preference share (the "Placing and Open Offer").

Pushkino is a modern Class A logistics complex which was completed in 2007. It consists of three warehouses and two infrastructure buildings on a single site, with lettable space of approximately 213,000 sq m. It is located to the north east of Moscow city centre, approximately 15 km from the Moscow Ring Road and has good transportation connections to the main roads from Moscow. Pushkino has been valued at US$228,910,000 by Cushman & Wakefield. The key characteristics of Pushkino are as follows:

·; Approximately 213,000 sq m of total lettable space on a land plot with a total area of 35 hectares;

·; Stabilised net annual rent receivable of US$24,750,000;

·; A stabilised yield of 11.5 per cent.;

·; The Cushman & Wakefield valuation reflects an ERV of US$29.9 million giving a reversionary yield of 13.9%; and

·; The property is 99 per cent. let to high quality international companies, including Auchan, DHL, Leroy Merlin and NLC.

The Proposed Acquisition will be partially funded by a US$129 million debt facility secured against Pushkino. The remaining consideration of approximately US$86 million will be funded out of the net proceeds of the Placing and Open Offer. The balance of such proceeds will increase the cash resources available to the Company for future acquisitions.

Once completed, the Directors anticipate that the Proposed Acquisition will be earnings enhancing for Raven Russia.

Further details of the Proposed Acquisition and the Placing and Open Offer will be set out within a Class 1 Circular and a Prospectus which are expected to be posted to Ordinary Shareholdersand Preference Shareholders respectively, on 1 May 2012.

Glyn Hirsch, the Chief Executive Officer of Raven Russia, said:

"We are delighted to acquire Pushkino which is a large, high-quality and income producing asset to add to our portfolio. We anticipate that it will be earnings enhancing.

We are also pleased to be raising over $100 million in difficult markets through the issue of new preference shares with the support of existing and new preference shareholders."

Enquiries:

This summary should be read in conjunction with the full text of this announcement. The Appendix contains the definitions of certain terms used in this announcement.

Proposed Acquisition of Pushkino Logistics Park

and

Placing and Open Offer of 48,414,250 New Preference Shares to raise US$104 million

1. INTRODUCTION

Raven Russia has today announced that it has, through its wholly owned subsidiary, Padastro, entered into a conditional agreement with PLP to acquire CJSC "Toros", the owner of Pushkino, a Class A logistics complex of approximately 213,000 sq m. located to the north east of Moscow, for a cash consideration of approximately US$215 million.

The Company has also announced today that, in connection with the Proposed Acquisition, it is proposing to raise gross proceeds of approximately US$104 million by way of a Placing and Open Offer of 48,414,250 New Preference Shares at a price of 134p per New Preference Share.

The Proposed Acquisition will be partially funded by a US$129 million debt facility secured against Pushkino. The remaining consideration of approximately US$86 million will be funded out of the net proceeds of the Placing and Open Offer. The balance of such proceeds will increase the cash resources available to the Company for future acquisitions.

In view of its size, completion of the Proposed Acquisition, which constitutes a Class 1 transaction under the Listing Rules, is conditional on, inter alia, Ordinary Shareholder approval at a General Meeting. The General Meeting will be held at the offices of the Company, 1 Le Truchot, St. Peter Port, Guernsey GY1 6EH at 10.00 a.m. on 30 May 2012. The Proposed Acquisition is also conditional upon Admission (completion of the Placing and Open Offer).

2. THE PROPOSED ACQUISITION

The Company has today announced that it has, through its wholly owned subsidiary Padastro, entered into a conditional agreement with PLP to acquire CJSC "Toros", the owner of Pushkino, a Class A logistics complex of approximately 213,000 sq m located to the north east of Moscow, for a cash consideration of approximately US$215 million.

Once completed, the Directors anticipate that the Proposed Acquisition will be earnings enhancing for Raven Russia.

Description of Pushkino

Pushkino is a modern Class A logistics complex which was completed in 2007. It consists of three warehouses and two infrastructure buildings on a single site, with lettable space of approximately 213,000 sq m. It is located to the north east of Moscow city centre, approximately 15 km from the Moscow Ring Road and has good transportation connections to the main roads from Moscow.

Pushkino has been valued at US$228,910,000 by Cushman & Wakefield. The key characteristics of Pushkino are as follows:

·; Approximately 213,000 sq m of total lettable space on a land plot with a total area of 35 hectares;

·; Stabilised net annual rent receivable of US$24,750,000;

·; A stabilised yield of 11.5 per cent.;

·; The Cushman & Wakefield valuation reflects an ERV of US$29.9 million giving a reversionary yield of 13.9%; and

·; The property is 99 per cent. let to high quality international companies, including Auchan, DHL, Leroy Merlin and NLC.

Pushkino is owned directly by CJSC "Toros", a Russian special purpose vehicle specifically and solely established to hold the lease interest in Pushkino and develop the warehouse asset on the land plot. As a result, the Proposed Acquisition will be structured as an acquisition by the Company's wholly owned subsidiary, Padastro, of the entire issued share capital of CJSC "Toros" from PLP.

Background to and benefits of the Proposed Acquisition

In September 2010, PLP, a subsidiary of Aareal, took full ownership of Pushkino via the transfer of the shares in CJSC "Toros" following its repossession from the previous owner, to which Aareal was the sole lender. This repossession followed a debt restructuring during late 2009 and early 2010, where Aareal bought out the interests of its co-lenders to become the sole lender. Raven Russia had looked at acquiring Pushkino prior to this reorganisation and consequently the Directors are familiar with its operating history.

The Directors believe that Pushkino is complementary to Raven Russia's existing portfolio. It is a high quality completed asset with a stabilised yield of 11.5 per cent. which, when funded conservatively with debt, gives a high income return on equity.

Terms of the Proposed Acquisition

Padastro has entered into a conditional agreement with PLP to acquire the entire issued share capital of CJSC "Toros".

The Acquisition Agreement, and therefore the Proposed Acquisition, is subject to the satisfaction of certain conditions including:

• the Resolution to approve the Proposed Acquisition being passed at the General Meeting by 5 June 2012;

• the new facility being available for draw-down in full on Completion; and

• Admission (completion of the Placing and Open Offer).

Completion of the funds flow relating to the repayment of the existing facility secured on Pushkino and the implementation of the new facility is expected to occur shortly following Admission.

Raven Russia will finance the costs of the Proposed Acquisition by using US$86 million of the net proceeds of the Placing and Open Offer. Approximately US$49 million will be paid to PLP as consideration for the shares in CJSC "Toros" and approximately U$37 million will be part of a combined new debt facility of US$166 million to be used to repay the Existing Toros Bank Debt, resulting in an acquisition cost of approximately US$215 million.

Financial effects of the Proposed Acquisition

The stabilised net annual rent attributable to Pushkino is US$24,750,000. Based on the estimated difference between anticipated finance costs and the relatively high yield of Pushkino, the Directors anticipate that the Proposed Acquisition will be earnings enhancing for Raven Russia.

Upon Completion, the value of the Raven Russia Group's investment properties will increase by approximately US$215 million, cash balances will increase by approximately US$14 million and the Group's long-term liabilities will increase by approximately US$129 million. The carrying value of the Preference Shares will increase by US$100 million.

3. DETAILS OF THE PLACING AND OPEN OFFER

Qualifying Shareholders are being given the opportunity to apply to subscribe for New Preference Shares in proportion to their existing holdings at the Issue Price (payable in full upon application) on the following basis:

1 New Preference Share at 134p per New Preference Share

for every 3 Existing Preference Shares

registered in the name of Qualifying Shareholders on the Open Offer Record Date and so in proportion for any other number of Existing Preference Shares then registered. Fractions representing New Preference Shares which would otherwise have arisen will not be allotted to Qualifying Shareholders, but will be aggregated with the New Preference Shares attributable to Overseas Shareholders not eligible to participate in the Open Offer and subscribed for under the Placing for the benefit of the Company.

Singer has received a commitment from Invesco to subscribe for 25,000,000 Preference Shares pursuant to the Placing, which they will offset by taking up in full their Open Offer Entitlement. Singer has agreed to place conditionally the balance of the New Preference Shares (after taking into account such commitment) with institutional investors (subject to clawback in respect of the Open Offer).

The New Preference Shares will rank pari passu in all respects with Existing Preference Shares and will represent 25 per cent. of the Preference Shares in issue following Admission. The Preference Dividend shall accrue on the New Preference Shares from the date of their issue.

If a Qualifying Shareholder does not take up his Open Offer Entitlements his interest will be diluted by 25 per cent..

Applications will be made to the FSA and to the London Stock Exchange for the New Preference Shares to be admitted to the Official List and to trading on the London Stock Exchange. Admission is expected to occur and dealings to commence in the New Preference Shares on 20 June 2012.

The New Preference Shares will initially trade under the ticker "RUP2" with ISIN number GG00B5Q2YY60 until 1 July 2012 when they will trade, together with the Existing Preference Shares, under the ticker "RUSP" with ISIN number GG00B55K7B92.

The Placing and Open Offer is conditional upon, inter alia, the following:

(i) the passing of the Resolution to be proposed at the General Meeting to approve the Proposed Acquisition;

(ii) the conditions to completion of the Acquisition Agreement (save for Admission) having been satisfied or waived;

(iii) the Placing and Open Offer Agreement becoming unconditional (except as to Admission occurring) and not having been terminated in accordance with its terms; and

(iv) Admission becoming effective on or before 8.00 a.m. on the scheduled date for completion of the Acquisition Agreement (currently estimated to be 20 June 2012).

If such conditions are not fulfilled or (where capable of waiver) waived on or before the date provided in (iv) above, application monies will be returned to applicants, without interest, as soon as practicable thereafter and any Open Offer Entitlements admitted to CREST will be disabled.

Completion of the Acquisition Agreement is expected to occur shortly following Admission once the funds flow relating to the repayment of the existing facility secured on Pushkino and implementation of the new facility has completed.

4. BACKGROUND TO AND REASONS FOR THE PLACING AND OPEN OFFER

As stated in the Company's Annual Report and Accounts for the financial year ended 31 December 2011 as published on 17 April 2012, Raven Russia has been looking at a number of acquisitions, specifically high quality completed assets, such as Pushkino, which yield over 11 per cent. and, when funded with conservative debt, give the Group a high income return on equity.

In order to part-fund the acquisition of Pushkino and to fund future acquisitions, the Directors believe that a further issue of Preference Shares to raise net proceeds of approximately £63 million at a 9 per cent. yield is an attractive funding option for the Group.

5. RUSSIAN PROPERTY MARKET OVERVIEW AND TRADING UPDATE

The markets in which the Group operates continue to be undersupplied putting upward pressure on rental levels. In Moscow the vacancy rate for warehousing is 1.3 per cent. and the volume of new product coming onto the market last year was the lowest since 2005. The lack of available project finance in the market is likely to prolong this situation as it will limit the volume of new construction activity.

The impact of increasing market rent levels, now US$135 per sqm. in Moscow, have been reflected in the property valuations completed on the Group's portfolio at 31 December 2011. The financial statements at that date show an increase in the gross value of the investment portfolio from US$943 million at 31 December 2010 to US$1,154 million at 31 December 2011, including capital expenditure of US$62 million and a valuation uplift of US$142 million. Investment property under construction (including additional phases of existing properties and land bank) is carried at US$101 million (31 December 2010: US$107 million).

Prime yields in Moscow are now around 11-11.5 per cent. with future capital growth being driven by upward pressure on rents. In regional cities in which the Group operates, yields are between 12.5 and 13.5 per cent. The Directors expect that any movement in yields in the short term would be tempered by the availability and cost of debt in the market.

On 17 April 2012, Raven Russia published its Annual Report and Accounts for the year ended 31 December 2011. The investment property portfolio of the Group is now 89 per cent. let with a further 3 per cent. under pre-let agreement ("PLA") or letter of intent ("LOI"). Annualised net operating income is now US$126 million, rising to US$130 million on conversion of PLAs and LOIs. Fully let, the portfolio has an estimated rental value of US$139 million per annum.

6. EXPECTED TIMETABLE OF PRINCIPAL EVENTS

If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by an announcement through the Regulatory Information Service of the London Stock Exchange. All references in this announcement are to London time unless otherwise stated.

Appendix

The following definitions apply throughout this document, unless the context otherwise requires: