Acma

Acma: held a press conference yday, a month after it said it was buying a 30% stake in Avangard 500 (AVG), a private engineering and construction company whose chairman, Igor Putin, is the first cousin of Russian President Vladimir Putin. AVG director Mikhail Polyakov believes the US$10m profit guarantee AVG has given to Acma is "on the low side". He explains, "we may be a young company but we have very good connections and we have leveraged on those connections to win large construction contracts. This year, we expect turnover of around US$100m, which for Avangard is a big jump from where it was previously. Given the size of the contracts we have, the US$10m guarantee we gave Acma is conservative and on the low side." For CY11 and CY12, AVG recorded a turnover of US$6.8m and US$27.1m and pre-tax profit of US$5,000 and US$50,000, respectively. As part of last month's deal, Acma will also place out 86.8m new shares at 2.94¢ each to Mr Polyakov, who helped set up the AVG purchase. Mr Polyakov will in turn provide Acma with a guarantee that AVG's pre-tax profit for FYMar14-16 will amount to at least US$10m. If that does not happen, Acma said, Mr Polyakov will make up the shortfall in cash, subject to a maximum of US$3m.