Aurrigo Share Discussion Threads

[engelo] 23/3/2010 17:03

enviro: I meant not much selling to-day to cause a fall of 11%. I agree there's been a dribble of selling for weeks now.

Maybe the next NAV in June will cheer things up, but it looks like we're firmly out of fashion atm.

Over recent months the contrast with a 'straight' investment eg JRS is eye watering.

[darcon] 23/3/2010 14:41

It might be the former owners of OSG who have been cashing in as part of the monies they received was in AURR shares, unless there was a lock-in

[envirovision] 23/3/2010 14:02

not so have seen many a sale over 10K volume lots in the weeks, some ones been cashing in fall as worked into market

[engelo] 23/3/2010 13:59

enviro: not a lot being sold, in fact buys and sells more or less balanced until that desperate sale of 50k at 27.

To my eye the combined views of AURR and of the Russian economy and stock market have never looked so favourable.

[envirovision] 23/3/2010 13:30

looks like someones being forced to dump some, cant see any reason why assume its a distressed sale, good time to increase my holding here so have again!

[darcon] 22/3/2010 21:41

March advisers report now available on the Aurora website:



Expecting robust GDP growth this year higher than initially forecast.

[envirovision] 22/3/2010 09:51

Fantastic, certainly explains a) why the company have concentrated lots on OSG and b) why they so easily raised cash for OSG via placing above market price.

[loobrush] 21/3/2010 20:53

from RNS December
Well worth reading in detail

Following this Placing, the Company will have raised a total of £90 million from Shareholders.
The manager of Aurora investments has an option to over 20% of the company subject to certain targets being met at a price of app x £1.00 per and as stated he believes that he canm realistically meets these targets.

The Company therefore announced that, following the receipt of cash from any disposal of any of its portfolio companies, it intends, subject to the provisions below to return to Shareholders an amount up to the lesser of the total sale proceeds of the portfolio company and a maximum of 1.5 times the total amount invested in that portfolio company plus the pro-rata allocation of costs of the Company to date ("Allocated Costs"), until the Company has returned a total of £105 million to Shareholders. Any proceeds in excess of this amount shall be retained by the Company for reinvestment purposes.

Cuurent company value is £32 million, this implies therefore that that each share will get over 3 times its value back in cash plus as well as each share remaining in investments.
This is a muLtibagger thats going unnoticed.
This is a bargain.

[darcon] 21/3/2010 19:29

Unistream, the company in which Aurora has a 26% stake, also has some interesting information on its website about its strategy, financials and prospects.

The following link details Unistream's history:



"The first important step was done same year when UNISTREAM attracted a $20-million investment to the business selling a 26-persent stake to the AIM-listed Aurora Russia Ltd.
Gradually transforming the system to a leader in the CIS market UNISTREAM started its rapid development internationally. In 2006, a bank's subsidiary started operating in Cyprus and a year later UNISTREAM UK started its successful activity in the Great Britain. In 2009, UNISTREAM Germany started operations, and a year later UNISTREAM Greece did.
Within a few-year period, the UNISTREAM - ran system reached leading market position in the CIS market. By 2009, the bank ran an international remittance service provider operating a 100 thousand service point network around the globe. The number of partners internationally reached 300.
In the CIS the bank became the leader in the range of products offered.
Intensive development in all corridors with spotless and effective coordination made the bank able to rapidly step up its network.
Entering 2010, UNISTREAM offered its clients over 190 000 outlets worldwide. Unprecedented projects have been successfully completed in Central Asia and South Asia, Gulf and Oceania. Nowadays the bank has reputation of a financial institution operating one of the fastest growing money remittance systems."

The following link details Unistream's strategy:



"Having reached the leadership positions in the CIS where UNISTREAM started, the system launched a massive expansion in the international market.
Within just a period of several years, UNISTREAM transformed itself into a powerful financial institution operating nearly two hundred thousands outlets globally, with locations in 5 continents and offering its clients services of highest standards wherever the outlets are.
One of the key issues in the strategy turned out to be development of its own networks internationally through affiliates. Nowadays the UNISTREAM's own networks are successfully operating not only in the region of origin but in the UK, Cyprus, Germany and Greece.
Another aspect to be mentioned is active participation in development of all principal world money transfer corridors. Incredible progress within a short period of time has been done in Europe, Asia, Oceania and Gulf. Using its leadership positions in the CIS as an outpost in its international expansion, the system played principal role in formation the directions such as Western Europe – Asia, Western Europe Central Asia, Gulf – Eastern Europe – CIS and others.
With its ambitious team, UNISTREAM is gradually moving towards its main goals to reach the leadership position in the global remittance market."

I particularly like the bit about their plans to get "the leadership position in the global remittance market." Move over Western Union, the Russians are coming!!

[darcon] 21/3/2010 19:11

There are some interesting press articles hyperlinked through the OSG website.



I find the following particularly exciting: "Рыl5;ок эти;х усл;уг стр;емl0;те 83;ьн
086; рас;теm0;: есл;и в 2008 г. дол;я ОСГ; на рос;сиl1;ск 86;м рын;ке хра;неl5;ия дан;ныm3; сос;таk4;ля 83;а $20 млн;, то в 2012 г. она; выр;асm0;ет на пор;ядl6;к до $200 млн;, про;гнl6;зи 88;уе
090; Aurora." which seems to suggest that OSG's revenues could rise to up to $200m in 2012 (ie, 10x the level of sales in 2008!

With that level of sales I would expect OSG to be valued at in excess of £100m in 2012. Or let's put it differently: one asset in Aurora's portfolio may be able to triple the current valuation of Aurora Russia. Definitely a share to tuck away and hold patiently.

[darcon] 05/2/2010 17:56

Looking at the trades there seems to be a buyer picking up lots of 50,000 shares every few days or so. If I had money to spare I would like to add to my holding as long-term this still looks very undervalued to me.

[engelo] 04/2/2010 14:11

enviro: now look what you've done!

At some point AURR will wake up to the appreciation in Russian markets this year, but when?

[envirovision] 03/2/2010 11:43

Topped up my holding in my sip today, was amazed to pay 35.1p amazing value.

[envirovision] 22/1/2010 16:45

22-01-10. MOSCOW - Ratings agency Fitch on Friday upgraded Russia's credit rating outlook from negative to stable as surging commodities prices helped Russia boost its public finances.

The upgrade reflects signs of economic and financial stability as evidenced by a recovery in capital inflows, slower inflation as well as reduction in downside risks in the banking sector, Fitch's head of emerging european markets Edward Parker said in a statement.

The rebound, sparked by an upsurge in oil prices, underpinned the decision to upgrade, he said.

[darcon] 15/1/2010 14:56

Monthly Aurora Advisors report out for January:



"Aurora Russia successfully raised £15m December 2009. Of this £12.4m will be used to purchase an additional 43.5% of OSG's shares, the largest records management company in Russia, Ukraine and Kazakhstan, (bringing the shareholding in OSG to 93.6%) and to invest new money into OSG to part fund a large warehouse facility. Both new and existing shareholders supported the fundraising."

"The Directors believe that the OSG Investment represents a significant opportunity to increase the Company's stake in a high growth business and to obtain a control premium for any future exit. The new investment will strengthen OSG's balance sheet which, the Directors believe, should facilitate further growth."

Interesting that they mention the control premium, which would seem to provide some basis for my hunch that there could be an upside to the OSG NAV come 31 March as a result of adding the control premium.

[darcon] 12/1/2010 17:00

RNS Number : 4386F
Aurora Russia Limited
12 January 2010
AURORA RUSSIA LIMITED ('the Company')
Completion of OSG Investment Agreement
Aurora Russia Limited announces that the OSG Investment Agreement, as described in the Company's announcement of 17 December 2009, has completed.

[darcon] 11/1/2010 16:59

On my back of the envelope calculations below we should get an approximately £5.5m increase to the NAV of AURR on 31 March 2010 as a result of the minority discount and control premiums changing for the OSG investment:

Original investment: £8m (equity + debt) - valued at £12.9m
New investment in Jan 2010: £12.4m in addition to £8m
Assume only 92% of this money accrues to NAV = £11.4m
Deduct 10% minority discount = £10.26m to add to total discounted value
Total NAV (with minority discount) = £23.16m
Add back discounts = (23.6/90)*100 = £25.7m
Add 20% control premium = 25.7*1.2 = £30.8m

£5.5m+ upside to the OSG NAV = > 4.89 pence upside per share

[darcon] 11/1/2010 16:52

Edit - deleted duplicate post

[darcon] 11/1/2010 15:04

Only one holding announcement thus far. But I think most if not all of the large shareholders will need to issue updated holding announcements about their new shareholdings (including the former owner of the OSG business)in AURR following the completed new share issue.

[envirovision] 07/1/2010 13:21

Agree, its to early for resolution 2. Maybe in a few years when some cash has been returned to investors and the company is trading on a premium to nav :-)

[darcon] 06/1/2010 20:58

"Aurora Russia Limited announces that at the Extraordinary General Meeting of the Company held earlier today Resolution 1, which granted the Board of the Company all necessary authorities to effect the issue of New Ordinary Shares announced on 17 December 2009, was passed by Shareholders.

Resolution 2, which proposed an amendment to the Company's Articles to provide a general authority to permit the Directors to accept in specie subscriptions for new Ordinary Shares, was not passed by Shareholders.

It is anticipated that the New Ordinary Shares will be admitted to trading on
AIM at 8.00am on 7 January 2010."

Regarding Resolution 2 which was not passed it was described as follows in the circular: "the Board is proposing to amend the Articles to expressly permit the Directors, in their absolute discretion and in accordance with Guernsey law, to allot and issue Ordinary Shares against the vesting in the Company of any property in which the Company is entitled to invest."

I guess rejection of Resolution 2 is actually a good thing. Giving directors a general authority to use the company's shares (which we consider to be undervalued) as a currency for purchases would potentially be dilutive and create circumstances that would increase selling pressure in an already illiquid stock. Why? We could probably assume that third parties who wish to sell their businesses or assets to raise cash would sell relatively quickly any in specie shares in AURR that they receive in return for their assets. The rejection of resolution 2 doesn't mean that the Directors can't seek such deals. It just means that they will remain conditional on shareholder approval.

[davebowler] 31/12/2009 10:10

''If any of them tried to increase their exposure to Russia as Standard Life did a few months ago by increasing its stake in AURR the share price would shoot up owing to the low liquidity. ''
Hmmm.. thats what we would have preferred!

[darcon] 23/12/2009 11:23

This looks to me like a positive development and I agree with Envirovision and Loobrush. I am going to have a look at it in more detail and update the header with the latest info over the Xmas break.

Russian Central Bank governor now talking of 5% potential growth in the economy next year. Things are looking up and so will the AURR share price. Patience is required.



As for the issue of participating in the placing. I don't think retail investors should presently be too bothered about that. If they want they can increase their stakes prior to closing of the placing by 50% by buying at less than the 40 pence price. The 40pence placing price looks like a fair deal for the larger institutional investors. If any of them tried to increase their exposure to Russia as Standard Life did a few months ago by increasing its stake in AURR the share price would shoot up owing to the low liquidity.