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Aurora Russia to invest a further GBP10m into Kreditmart

The UK Aim-quoted investment vehicle Aurora Russia, established to make equity or equity-related investments in small and mid-sized private companies in Russia, has invested a further GBP1

The UK Aim-quoted investment vehicle Aurora Russia, established to make equity or equity-related investments in small and mid-sized private companies in Russia, has invested a further GBP10m into Kreditmart, which distributes mortgages, equity release loans and other consumer finance products. Kreditmart is wholly owned by Aurora Russia, which has now invested a total of GBP22.5m in the company.

Kreditmart is a leading multi-brand and multi-product financial supermarket that specialises in mortgages and consumer loans. It was launched by Aurora Russia with a GBP12.5m investment in November 2006 and has made significant progress in building its distribution network.

Kreditmart opened its first loan shop in Moscow in March 2007, followed by its second in St. Petersburg in August, with more branches scheduled to open in Omsk and Novosibirsk in October. Leases have been signed on locations for branches to open in Ekaterinburg and Rostov-on-Don by year-end.

The company has also opened another five sales points in high street locations in Moscow and the surrounding region within the real estate sales offices of Doki and Realmart. Kreditmart, which employs 80 mortgage professionals, offers more than 400 loan and insurance products from 18 partner banks and insurers, and to date has originated more than USD10m in mortgage loans.

‘Kreditmart has been steadily exceeding our expectations in terms of growth dynamics – we are committed to further supporting Kreditmart’s buoyant development,’ says Aurora Russia chairman Sir Trevor Chinn.

‘We are delighted with the developments to date and the continued growth of all three businesses in which we have invested. The Russian economy continues to be buoyant and is promoting increased demand for consumer goods and services. Given the strong pipeline of potential investments we are currently evaluating, we believe that we are well positioned to take advantage of this trend.’

James Cook, chairman of Kreditmart and a director of Aurora, says: ‘The Russian mortgage market is very vibrant and set for further growth. We are determined to leverage this trend to our advantage so as to deliver greater value to our shareholders.’

Aurora Russia, which floated on the Alternative Investment Market of the London Stock Exchange in March last year, focuses on the financial, business and consumer services sectors where the directors believe there is potential for growth plus exit opportunities within two to four years of making such investments.

Aurora Russia targets companies with enterprise values of up to about GBP100m and seeks to secure blocking or controlling stakes of more than 20 per cent, typically of between GBP5m and GBP25m, in each portfolio company, along with board representation.

GBP40m of Aurora Russia’s capital is now committed, including the additional GBP10m investment in Kreditmart to fund further growth. The firm also has invested GBP10.3m for a 26 per cent stake in Unistream, a leading Russian international money transfer firm that plans to establish up to 550 money transfer cash desks over the next few years, and GBP5.2m (plus a GBP1.5m loan) for a 37.1 per cent holding in OSG Records Management, a regional market leader in records management.

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