Comments on Ruric's regarding application for company reorganization

What does company reorganization mean?

In brief, company reorganization means that an administrator appointed by the District Court will present a proposed arrangement to creditors. In the case of Ruric this is principally the holders of the company's bonds, who will receive a proposed arrangement that the company will prepare and present in consultation with the administrator.

Together with the administrator, Ruric will prepare a new offer to the holders of the company's bonds, which most probably will be combined with a rights issue.

Why is Ruric entering into company reorganization?

Ruric's company reorganization is being implemented to create long-term sustainable financing of the company. This should avoid unnecessary loss of value, which could be the consequence of rapid divestment of assets in order to meet short-term interest payments combined with repayment of the bond loans that fall due next year.

How will bond holders be affected by the proposed reorganization?

Bond holders will receive a proposed arrangement to consider. The wording of the proposal will be presented in the reorganization plan that the administrator will produce within three weeks from the court decision. During the reorganization, the coupon will not be paid out.

To be implemented, a 50 percent or better arrangement would require acceptance by at least 60 percent of creditors. A vote on forthcoming proposals will be held at a meeting of creditors at the District Court.

How will shareholders be affected by the proposed company reorganisation?

The reorganization is assessed to be positive for the shareholders. This is being done to create long-term sustainable financing of the company. This should avoid unnecessary loss of value, which could be the consequence of rapid divestment of assets in order to meet short-term interest payments combined with repayment of the bond loans that fall due next year. Company reorganization is therefore not an instrument that may be used to unilaterally favour shareholders at the expense of creditors. The administrator must therefore consider and decide on any arrangement offered to creditors.

How long will the reorganization take?

We expect a reorganization to go on for three to six months.

Russian Real Estate Investment Company AB (publ)

For further information, please contact:

Craig Anderson, CEO
Tel: +7 812 703 35 50
E-mail: info@ruric.com

Nils Nilsson, Chairman
Tel: +41 22 534 95 42
E-mail: nils@ruric.com