Kommersant (Moscow) - January 25, 2007

RBC Information Systems announced yesterday the consolidation of all of its IT assets in the fully-owned subsidiary Armada. This is the first step towards divesting the company's IT business in a separate structure, whose shares are most likely to be traded on one of the Russian stock exchanges as early as the spring of this year. Analysts estimate Armada's capitalization at $180m-$200m.

The decision on the consolidation of IT assets in Armada was made by RBC's general meeting of shareholders. RBC management - Chairman of the Board of Directors German Kaplun, Vice Chairman for Development Alexander Morgulchik, and Vice Chairman of Finance Dmitry Belik - did not vote on the issue, as their collective stake in Armada exceeds the controlling stake, and any transfer of assets between companies within the same group is considered a related-party transaction.

* In the first half of 2006, RBC holding's revenue reached $73.7m, which is 62% greater than in the same period of 2005. IT services accounted for $28.3m, a 102% increase. Consolidated EBITDA (Earnings before interest, taxes, depreciation, and amortization) stood at $24m compared to $13m in the corresponding period of 2005. The company's market capitalization amounted to $1.3bn. Meanwhile, RBC's IT business, whose revenue, according to preliminary estimates, amounted to $75m last year, includes software development (RBC Soft), system integration and computer assembly (Helios Computer) and consulting services (ASKO-TBS Consulting). In February of this year, RBC's Board of Directors is expected to make a decision on the divestment of Armada from the holding's structure. According to German Kaplun, the management does not rule out the possibility of selling its IT business, but the option of transferring securities to RBC's shareholders in the form of dividend is certainly more preferable. In this case, RBC's management will gain control over Armada and be able to register the company's additional share issue and float shares. "We are looking into the initial public offering (IPO)," German Kaplun confirmed. "If everything goes according to plan, we will be able to float from 15% to 20% of Armada's shares on one of the Russian stock exchanges as early as the spring of 2007."

Analysts believe that the market will estimate the IT company's worth at $180m-$200m. "The flotation of a 25% stake will bring Armada nearly $50m in proceeds," Finam Russian Brokerage Company analyst Vladislav Kochetkov said. "Liquidity will be high, as Armada will be one of the few Russian IT companies trading on the market, and the national IT sector currently looks very attractive to foreign investors due to its rapid development." According to Finam's data, Russia's IT market grew 25% last year and reached $25bn, whereas the average growth figure in Europe is a mere 8%.

Analysts, interviewed by Kommerstant, observed that Armada was likely to spend the proceeds from the IPO on acquisitions - there are still quite a few cheap IT companies in Russia. "By selling 25% of its shares and raising $50m, Armada will be able to purchase two companies with a market position similar to Formoza. It is also possible that the management of the new structure will want to buy a more marginal business, for instance, a small system integrator," said Corporate Finance Director of Deutsche UFG Anton Inshutin.