Novye Izvestiya (Moscow) - June 7, 2004

The Board of Directors of the RBC Information Systems Joint-Stock Company (the parent company of the RBC Group) has announced an additional issue of securities. Funds that the company plans to receive from selling these shares will be allocated for the development of new projects.

RBC will issue 15m common shares, making up 15 percent of its authorized capital. Their offering started last Thursday, and it will continue until June 16. The securities will be offered to a limited group of investors in Russia, Europe and the USA. The managers for the offering are Aton Capital, Troika Dialog and Deutsche UFG, and the financial consultant is ABD Capital/City Capital. German Kaplun, the chairman of the Board of Directors of the RBC holding company, declared that the price of the shares would be set on June 16, and they would be offered at an auction on the following day. The company's management links the new ambitious plans to positive trends in the Russian economy (such as the GDP growth and an increase in individual incomes), as well as to the growing volume of the advertising market. While the amount of expenditures on advertising reached $2bn in Russia in 2002, the corresponding figure for last year was $2.6bn, and the estimate for 2004 is $3.4bn.

According to Kaplun, the funds to be received from the additional issue of shares will be used for buying IT and media companies (70 percent), as well as for the development of new projects (30 percent). "We can see great prospects in the IT industry, and we will be buying companies at which we can increase the efficiency of business and can use their client base for promoting our products," he stated.

At present, IT services make up 33 percent of all revenues to RBC, and media services make up 67 percent (including 12 percent received from the TV channel). The Ukrainian company Garant Media International started to broadcast programs of RBC TV on June 1. This has increased the TV channel's audience by 5.25m people. RBC TV is also beginning to broadcast its programs in Belarus. St. Petersburg Cable Networks, which is a large cable TV operator in St. Petersburg, will be broadcasting programs of the Russian business TV channel, beginning in July. RBC, founded in 1993, positions itself as a media source oriented to the economically active part of the population, who wish to know about economic events in Russia and in the world. According to information from COMCON-Media, RBC's weekly audience is 1.563m people. Surveys conducted in March and April 2004 showed that RBC's viewers are people with rather high incomes. Of those, 22.9 percent are senior and medium-level managers, and 27.6 percent are qualified specialists. One third of the audience works in the industrial, construction and financial sectors. Fifty-two percent have a university degree or completed a university course. 62.1 percent spend most of their time on their career. RBC TV's programs are broadcast in a territory with a population of about 21m people. The company's revenue is expected to grow from $48.5m last year to $71m in 2004, and the net consolidated profit is expected to increase from $3.7m to $10.8m. According to the head of the holding company, it is also planned to increase the value of the assets from $60.3m in 2003 to $72.1m this year.

Troika Dialog forecasts that RBC's sales volume will grow to $206.5m by 2009, and the net profit will increase to $59.4m. "RBC is the only company that has a TV channel, a news agency and a business in the sector of computer technologies. Companies producing only raw materials have long been prevalent in the Russian economy, and hi-tech companies have a great potential for growth," Yevgeny Golosnoy, an analyst for telecommunications of Troika Dialog, pointed out.