ACMA

ACMA: Entered into agreement to buy 30% stake in Russian private engineering firm, LLC CC Avanguard 500, for $3m via issue of 123.1m new shares @ $0.0311/share (6% discount to last close) and a 2-year option for an additional 98.4m shares at an exercise price of $0.0389 upon completion of the purchase. Avanguard is principally engaged in engineering and engineering related construction and its clients include large Russian corporations such as JSC Russian Railways, NK Rosneft, FGC UES and OAO Gazprom. Notably, Avanguard's chairman Igor Alexandrovich Putin is 1st cousin to Russian president Vladimir Putin. Deal involves a profit guarantee of US$10m in total pretax profits for Avanguard over the next 3 yrs.This translates to a ROE of 33% for Acma on its investment. Acma will pay an additional $2.6m for the introduction and profit guarantee for the deal to an unrelated party, Mikhail Polyakov. This will be via an issue of 86.8m new shares @ $0.0294/share (10.9% discount to last close) with a 2-year option for an additional 69.5m new shares at an exercise price of $0.0367 upon successful completion of the agreement.