Novosti SMI, March 10, 2003

The company is capitalized with $10 million in equity, which came from the parent company OAO RBC Information Systems, and a $5 million loan. As Novosti SMI managed to find out, the debt portion of financing has a form of private placement attracted with the assistance of Swiss-based ABD Consulting. RBC TV reached an agreement with investors to increase the total amount of funding for the project to $18-20 million if necessary. Despite quite unpleasant situation on world markets, RBC managed to attract the money on beneficial terms. This financing structure was designed and approved by the RBC Board in order to minimize commercial risks and protect the interests of the minority shareholders of the parent company. According to estimations of RBC management, the project will break even in two years, with a payback period of three years. The company expects profitability of the project to be in line with other business units of RBC. The business model of the project is based on advertising revenues. Potential advertisers of RBC TV include investment and insurance companies, banks, real estate firms, construction companies, airlines, car dealerships, telecommunication and business service providers as well as public companies. RBC will introduce this project in detail to the public and press in early April.

At present, the company has hired the majority of staff for the TV project. RBC TV will broadcast from a television center located on RBC premises with a total office space of more than 3,000 square meters.

ZAO RBC TV is a wholly owned subsidiary of RBC Information Systems. This will allow the parent company to have full control of the project, use synergies with other RBC businesses and protect independent and objective editorial policy.