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26.03.07

«Detsky Mir» concluded a financing agreement for the amount of EUR 65million with Raiffeisen Group in Russia.

OAO Detsky Mir-Center (the parent company of Detsky Mir) and ZAORaiffeisenbank Austria have signed an agreement on a multi-currencycredit line totaling up to EUR 50 million. Also, Detsky Mir-Centerreached an agreement with Raiffeisen-Leasing on the provision of aleasing limit of up to EUR 15 million to finance the acquisition ofretail and warehouse equipment.

The interest rate on the credit line is floating and is fixed at LIBORin case of USD and EUR, at MosPrime in case of RUR. According to thecompany''s estimation, the average interest rate on the current loans ofDetsky Mir-Center after receiving the credit line from Raiffeisenbankwill drop from 11.5% to 8.5%. The raised funds will be used to replenishthe current assets and to refinance the current credit portfolio. Theduration of the credit line is 2 years after singing the loan agreement.

"Retail sector has been rapidly growing over the last few years, and itholds true not only in regards to the food retail sector. The amount andterms of the credit line provided to OAO Detsky Mir-Center is indicativeof the company''s firm position in the market. We hope thatRaiffeisenbank''s financing services will foster its furtherdevelopment," said Pavel Gurin, Deputy Chairman of the Board, Directorof Corporate Customer Service and Finance Management at ZAORaiffeisenbank Austria.

"This transaction is in line with the development strategy and financialpolicy of the Group," explained Maksim Yentyakov, Managing Director ofOAO Detsky Mir-Center."We are moving to a completely new level of thenetwork development which implies combining intensive growth with strictfinancial discipline which will allow us to maximize the business costand to accelerate the rate of expansion to new regions. We believe thatthis agreement is indicative of constant interest of major foreignfinancial institutions in partnership relations with Russia''s leadingretail companies."

The national network Detsky Mir is the leader in the retail sales ofchild products in Russia and at present operates 66 outlets in 32 citiesacross the country. The proceeds of Detsky Mir Group according to USGAAP as of Q3/2007 totaled $200.2 million, as of 2005– $207.5 million. The parent company of Detsky Mir is OAO Detsky Mir-Center, a 100% subsidiary of Finance Corporation Sistema.

Joint-Stock Finance Corporation Sistema is the largestconsumer-services company in Russia and the CIS with over 70 millioncustomers. Founded in 1993, Sistema is among the top companies in theareas of telecommunications, technology, real-estate, banking business,retail and Mass Media. The company''s proceeds as of Q3/2006 totaled $7.5billion. The total assets as of September 20, 2006, amounted to $18.5billion. Sistema''s shares have been listed on London Stock Exchange as"SSA", on"Russian Trading System" Stock Exchange– as"AFKS" and onMoscow Stock Exchange– as"SIST".

ZAO Raiffeisenbank Austria is ranked 10th in terms of assets amongRussian largest banks based on 2006 results (Interfax-CEA). At present,the Bank has 24 branches in Moscow, 5 branches in Saint Petersburg andregional branches in Yekaterinburg, Samara, Novosibirsk, Chelyabinsk,Nizhny Novgorod, Krasnodar, Krasnoyarsk and Perm. In terms of thecorporate credit portfolio Raiffeisenbank ranks 9th based on 2006results (Interfax-CEA). Among the leading retail banks of Russia,Raiffeisenbank ranks 8th both in terms of private lending and privatedeposits based on 2006 results (Interfax-CEA).

ZAO Raiffeisenbank Austria is an affiliate of RaiffeisenInternazional Bank Holding AG (Raiffeisen Internazional), withsubsidiary banks and leasing companies in 16 CEE markets. The Bankserves 11.7 million customers at more than 2,775 business outlets, andalso has representative offices in Lithuania and Moldova. RaiffeisenInternational is a fully consolidated subsidiary of RaiffeisenZentralbank Osterreich AG (RZB), which owns 70 per cent of the commonstock. The remaining 30 per cent is free float; the shares are traded onthe Vienna Stock Exchange. RZB is a leading corporate and investmentbank in Austria and the central institution of the Austrian RaiffeisenBanking Group, the country''s largest banking organization.

OOO Raiffeisen-Leasing Russia, was established in 2000; itsshareholders are ZAO Raiffeisenbank Austria (50%) and Raiffeisen-LeasingInternational GmbH (50%). Raiffeisen-Leasing offers financial leasing ofa wide range of equipment and vehicles to companies representing variouseconomic sectors.

As of 2006 the company''s leasing portfolio exceeded 162 millioneuros. Construction machinery makes 10% of the current portfolio, 20% isthe share of light and heavy vehicles, 30%– railway cars and mobile machinery, 40% – industrial equipment. In 2006 OOO Raiffeisen-Leasing financed assets in the value of 116 million euros. OOO Raiffeisen-Leasing is ranked 9th in the rating of top leasing companies in Russia based on Q3 2006 results (RA Expert) ranks 7th in terms of new leasing transactions. At present the company operates branches in St. Petersburg, Novosibirsk, Yekaterinburg, Samara, Nizhny Novgorod and Krasnodar and it is planning its further regional development.

 

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