AURORA RUSSIA LIMITED 23 November 2015
Dear Shareholder
Please find enclosed a notice (the 'Notice') of the next annual general meeting (the 'AGM') convening the AGM of the Company to be held at the registered office of the Company on Wednesday, 23 December 2015 at 11.30 a.m. to consider and if thought fit, pass the resolutions specified in the Notice. The Company's annual report and audited financial statements for the year ended 31 March 2015 (the 'Annual Report'), will at the commencement of the proceedings of the AGM be laid before the meeting.
If you are unable to attend the AGM, we enclose a form of proxy (the 'Form of Proxy') to enable you to appoint a proxy to attend and vote on the resolutions as set out in the Notice and we should be grateful if you would complete and return the Form of Proxy to the Registrar, Capita Asset Services, at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, to be received by no later than Monday, 21 December 2015 at 11.30 a.m.
The Company is obliged under its articles of incorporation to propose at the AGM that the life of the Company be continued (the 'Continuation Resolution'). If the Continuation Resolution is not passed, then the directors are obliged to formulate proposals to be put before the Company's shareholders in a further general meeting to wind up, reorganise or reconstruct the Company. The Continuation Resolution is to be proposed at the AGM and is included in the Notice.
As you are aware from the Annual Report and from announcements previously released by the Company, the Company now holds only one residual investment, a minority interest in OJSC Unistream Bank (the 'Bank'), and the Company's Board of directors is continuing its efforts to sell its interest in the Bank for cash (the 'Disposal') at a price which reflects its true underlying value.
The Board and the Investment Adviser have undertaken extensive negotiations over the last six months with prospective acquirers of the Company's investment in the Bank. These negotiations have not been made easier by the weakness of Aurora's position as a minority holder in the Bank and the limited appetite for Russian assets over the period. Notwithstanding these obstacles the Board believes that it will be able to realise the asset in the near term. The Bank remains an attractive company due to its consistent growth, strong market positioning and cash generation. The Board is reviewing a direct disposal of the Company's shareholding in the Bank and other options for realising value from the Company's shareholding in the Bank.
The Board recommends that the Company's shareholders (the 'Shareholders') vote in favour of the Continuation Resolution to give further time to negotiate and complete the Disposal.
If the Disposal is achieved, proposals will as soon as reasonably practicable be put to Shareholders at an extraordinary general meeting (an 'EGM'). These will include, inter alia, measures to facilitate the distribution to Shareholders, in a timely, cost effective and tax efficient manner, of substantially all of the Company's net realised cash
If the Disposal has not been achieved by 31 March 2016, then the Board will consult the major Shareholders regarding the Company's future.
If the Continuation Resolution is not passed, then the Board of directors currently believes that it will have no viable alternative other than to propose that the admission of the Company's Ordinary Shares to trading on AIM be cancelled (a 'Delisting') and that the Company be voted into members' voluntary liquidation. However, the Board of directors does not believe that a Delisting and subsequent liquidation of the Company would be in the best interests of the Shareholders, not only because many Shareholders may not be able to hold unlisted securities, but also because a liquidator would not be best placed to negotiate and execute the Disposal. In addition, the final sale of the Company's interest in the Bank might be delayed considerably, which would in turn delay returns of invested capital to Shareholders.
The directors believe that it would be in the best interests of Shareholders for the Board's existing authority to arrange repurchases by the Company of its own shares to be renewed, in order that the Board might return to shareholders any excess cash held by the Company from time to time, rather than retaining such cash on deposit for little or no return.
Yours faithfully
For and on behalf of
JTC Fund Solutions (Guernsey) Limited
Secretary of
AURORA RUSSIA LIMITEDEnc.
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