City Service intends to purchase group of companies in Stavropol


City Service has signed a tentative agreement concerning the acquisition of a
group of private companies in the city of Stavropol, Russia. Together these
companies manage about 2 million square meters of space in residential
buildings in Stavropol. 

‘We choose the companies that we plan to acquire very carefully. After the
tentative agreement is signed, we will take a couple of months to evaluate the
credibility and the potential of the companies and then we will make the final
decision concerning the acquisition,' Žilvinas Lapinskas, general manager of AB
City Service said. 

It is planned to acquire the group of companies for 68.5 million RUB (5.6
million LTL). Their consolidated sales amount to 262 million RUB (not including
VAT), (21.4 million LTL) a year. 

City Service would take over 100% of the shares in most of the companies which
it is planning to purchase. In a few companies, City Service would take over
76% of the shares and the remaining 24% of the shares would be controlled by
the administration of Stavropol. According to the representatives of City
Service, this division of shares is seen as positive because it opens new
opportunities for implementation of various projects together with the
authorities of Stavropol. 

‘The agreement for the acquisition of the companies in Stavropol is the first
project created by the joint workgroup consisting of representatives from City
Service and Sberbank,' Mr Lapinskas said. 

After City Service and Sberbank signed an agreement for cooperation at the
beginning of the year, the workgroup was formed and tasked with preparing
development projects for certain regions in Russia. Mr Lapinskas says that the
first step will be made in Stavropol because it is a rapidly developing city.
The city now has about 370,000 inhabitants. Various industries exist in
Stavropol, for example, machinery and metalwork (there is a division of Kamaz
in the city), electronics, chemical, oil and gas, and food. 

The reform of communal services market in Russia that opened the market for
private companies engaged in the management of apartment buildings began in
2005. The total area of residential buildings in Russia amounts to more than 3
billion sq. m. 

About the companies

City Service owns 33 companies operating in Lithuania, Latvia, Russia and
Ukraine. City Service manages facilities in buildings the total area of which
is nearly 18 million sq. m. The shares of City Service are listed on the Main
List of NASDAQ OMX Vilnius stock exchange. 

Sberbank is the largest bank in Russia with 17 regional offices, 783 branches,
and more than 20,000 sub-branches. Sixty percent of the banks' shares are owned
by the Central Bank of Russia. 

Vilius Mackonis 
Public Relations Officer
+370 5 2394900