Alpcot Agro offers to acquire BBAH Sweden AB

Not for release, publication or distribution in, or into the United States, Australia, Hong Kong, New Zealand, Canada, South Africa or Japan.

Alpcot Agro AB (publ) (”Alpcot Agro” or the “Company”) announces a voluntary exchange offer to the shareholders of BBAH Sweden AB (publ) (”BBAH”) to acquire all outstanding shares in BBAH (the “Offer”). Summary • Alpcot Agro is offering to acquire all outstanding shares in BBAH, by offering all eligible BBAH shareholders 0.142 new shares for each BBAH share held after a planned rights issue in Alpcot Agro. • An acquisition of BBAH will constitute a boost to Alpcot Agro’s efforts to realise the Company’s strategic plan. Alpcot Agro will through BBAH establish itself in one of the most promising agricultural regions in Eastern Europe. Kaliningrad combines high yield potential with good prospects for export. With the Company’s local knowledge and experience from Russia, Alpcot Agro expects the acquisition to create good value for its shareholders. BBAH will add about 15,000 hectares of land under control to Alpcot Agro, however additional investments are required to fully take control of the land. • The Offer (if fully accepted) would lead to an issue of up to 655,420 new shares in Alpcot Agro, representing a dilution in Alpcot Agro of up to 1.3 per cent after the planned rights issue in Alpcot Agro (if fully subscribed). • Alpcot Agro intends to attract financing of approximately SEK 235 million through a rights issue in order to inter alia enable Alpcot Agro to develop the operations in Kaliningrad. • The major shareholders in BBAH, holding in total shares corresponding to approximately 35 per cent of the total number of shares in BBAH, have in respect of the Offer indicated a positive view towards acceptance of the Offer. • The acceptance period is expected to commence on 16 December 2009 and end on 15 January 2010, subject to extentions. Settlement is expected to begin about two weeks after the expiration of the acceptance period. Björn Lindström, Alpcot Agro's CEO, comments: “We expect BBAH’s operations in Kaliningrad to create substantial shareholder value for Alpcot Agro. Adding BBAH’s high-yielding farmland in Kaliningrad close to export facilities is an important step in Alpcot Agro’s efforts to improve overall yields and decrease the reliance on the volatile domestic Russian grain market. Additional financing is required to fully benefit from the potential in Kaliningrad, but the expected return on additional financing looks attractive. Furthermore, we welcome the previous shareholders in BBAH as new shareholders in Alpcot Agro and hope that they will remain as shareholders in Alpcot Agro and benefit from all Alpcot Agro’s investments in Russia and Ukraine.” Background and motive for the Offer Alpcot Agro in brief Alpcot Agro is a Swedish limited liability company (Sw. aktiebolag), incorporated by Alpcot Capital Management Limited in 2006. Alpcot Agro invests in the so called black earth belt, which stretches from Northern Ukraine through Southern Russia to Siberia, where the climate conditions are favourable for farming. Alpcot Agro commenced its operations in 2007 in the Voronezh region in Russia. Alpcot Agro has, since it was founded in 2006, raised capital through issues of shares and convertible debt instrument with gross proceeds of approximately SEK 1,451 million in total. Since 19 October 2009, Alpcot Agro’s shares are traded on NASDAQ OMX First North in Stockholm. Alpcot Agro’s business concept is to generate an attractive return on invested capital by acquiring and farming agricultural land in Russia and in other countries within Commonwealth of Independent States. Alpcot Agro’s operational strategy is to operate an efficient, modern agricultural business according to international best practice. Alpcot Agro’s value chain has three parts: crop production, storage and sales. Alpcot Agro is also operating livestock farming. Alpcot Agro has operations in six regions in Russia – Kurgan, Kursk, Lipetsk, Tambov, Volgograd and Voronezh – and four regions in Ukraine – Ivano-Frankivsk, Lviv, Poltava and Volyn. Alpcot Agro’s head office is located in Moscow. Alpcot Agro has entered into a management agreement with Alpcot Capital Management Ltd. Under the Management Agreement, Alpcot Agro has access to Alpcot Capital Management Ltd as an Investment Manager. As of 30 June 2009, Alpcot Agro had 1,059 fulltime employees in total, including seasonal and part time employees. BBAH in brief BBAH was founded in 2006 and is managing agricultural operations in the Kaliningrad region in Russia, where the company has about 15,000 hectares of land under control, provided some additional investments are made. In addition BBAH is also operating a dairy business consisting of about 550 milk cows. BBAH harvested about 7,000 hectares in 2008 and is planning to harvest about 11,000 hectares in 2009. Since December 2008 BBAH is undergoing a corporate reconstruction (Sw. företagsrekonstruktion) led by Peter Smedman. As of 30 October 2009, BBAH had 62 shareholders. Benefits with an acquisition of BBAH Alpcot Agro is determined to pursue the conclusions from the strategic review, which was conducted during 2008. Alpcot Agro’s efforts are concentrated on increasing the average quality of the Company’s land bank and boost yields in the near future. The domestic Russian grain market has suffered from relatively low grain prices in the wake of the record harvest in 2008. As the expansion of the export infrastructure of grains is lagging the increasing harvests in Russia, it is of outmost importance to not solely rely on the domestic market. The acquisition of BBAH is one important step in this direction for Alpcot Agro, since most of the production in Kaliningrad can be sold on export. The addition of BBAH will also introduce winter rape as one of the most important crops for Alpcot Agro along with wheat and sunflower. The soil and climate in Kaliningrad is excellent for winter rape, and good results have already been achieved. Alpcot Agro wants to use its platform as a listed company to actively and selectively participate in the ongoing consolidation of the sector. Although there are certain risks with the acquisition of BBAH, it is above all an excellent opportunity to rapidly establish Alpcot Agro as one of the leading farming companies in Kaliningrad. There are also other synergies in a combination of Alpcot Agro and BBAH. Sales and purchase can be coordinated and administrative functions can be shared. Alpcot Agro expects to be able to integrate BBAH and to implement International Financial Reporting Standards (“IFRS”) during 2010. The Offer Alpcot Agro is offering to acquire all outstanding shares in BBAH, by offering all eligible BBAH shareholders 0.142 new shares for each BBAH share held (the ”Share Consideration”) after the planned rights issue (if fully subscribed) in Alpcot Agro has been completed. New shares does not give the right to participate in the planned rights issue in Alpcot Agro. No commission will be charged on shares tendered under the Offer. To the extent shareholders of BBAH are entitled to receive fractions of Alpcot Agro shares, such fractions will be sold by a financial institution on a best efforts basis on NASDAQ OMX First North on behalf of the BBAH shareholders and the proceeds remitted in SEK to the BBAH shareholders so entitled. Sales proceeds of less than SEK 20 will not be paid out. The Offer values BBAH at about SEK 10.8 million, based on the closing price of the Alpcot Agro share on NASDAQ OMX First North on 23 November 2009 of SEK 19.50 and adjusted for the planned rights issue in Alpcot Agro. Assuming full acceptance of the Offer, about 655,420 new Alpcot Agro shares will be issued pursuant to the Offer. In such case, former BBAH shareholders and existing Alpcot Agro shareholders will own about 1.3 per cent and about 98.7 per cent respectively of the shares and votes in Alpcot Agro following completion of the Offer, after the planned rights issue in Alpcot Agro has been completed. The new Alpcot Agro shares will promptly upon completion of the Offer be listed on NASDAQ OMX First North and will have equal rights in all respects as existing shares in Alpcot Agro. The major shareholders in BBAH, holding in total shares corresponding to about 35 per cent, have in respect of the Offer indicated a positive view towards acceptance of the Offer. The above mentioned shareholders have however not yet concluded on the terms in the Offer and will need the acceptance period to evaluate the Offer in more detail. Conditions for the Offer Completion of the Offer is subject to: 1) Alpcot Agro’s shareholders authorising the board of directors of Alpcot Agro on the Extraordinary General Meeting on 10 December 2009 to issue the new Alpcot Agro shares; 2) Alpcot Agro receiving valid and unconditional acceptances of the Offer from BBAH shareholders representing more than 90 per cent of the total number of shares and votes in BBAH before as well as after dilution, provided however that Alpcot Agro explicitly reserves the right to complete the Offer also at a lower acceptance; 3) the proposed composition with BBAH’s creditors is approved by the creditors and gains legal force whereby 75 per cent of BBAH’s accrued debt as of 12 December 2008 is written off; 4) all necessary regulatory, governmental and similar permits, approvals, decisions and similar clearances, including from competition authorities, in connection with the Offer, its implementation or the acquisition of BBAH by Alpcot Agro having been obtained on terms reasonably acceptable to Alpcot Agro, and neither the Offer nor the acquisition of BBAH becoming, or could be anticipated as becoming, wholly or partly prevented or materially adveresly affected by any legislation or other regulation, court decision, public authority decision or similar circumstance outside the control of Alpcot Agro; 5) with the exception of information publicly announced by BBAH and information of which Alpcot Agro had knowledge of at the time of the Offer, (i) Alpcot Agro not discovering that any information publicly announced by BBAH or otherwise made available to Alpcot Agro is materially inaccurate or misleading or that any material information that should have been publicly disclosed by BBAH has not been so disclosed and (ii) no circumstances having occurred which has or can reasonably be expected to have a material adverse effect on BBAH’s sales, results, liquidity, equity or assets (except which relates (a) to the global economy or the economy of any geographic area in general, provided that such circumstances do not have a disproportionate effect on BBAH, or (b) to the stock market in Sweden or elsewhere in general); and 6) with the exceptions and dispositions that are part of BBAH’s ordinary course of business, BBAH not making any decisions with regard to, (i) issuance of shares or other financial instruments by BBAH or by a subsidiary (including change to the terms of issued financial instruments), (ii) merger of BBAH or any subsidiary, (iii) sale or purchase of significant areas of operation of BBAH or its subsidiaries, or other dispositions of material significance to the nature of its operations, (iv) purchase or sale of BBAH’s shares, or (v) any measures or actions that are typically intended to or may be expected to frustrate the Offer by impairing the prerequisites for the Offer or the execution thereof. Alpcot Agro reserves the right to waive any of the above conditions and to withdraw the Offer in the event that any or all of the abovementioned conditions are not fulfilled or cannot be fulfilled or waived. The Offer shall be governed by and construed in accordance with the laws of Sweden. The courts of Sweden shall have exclusive jurisdiction over any dispute arising out of or in connection with the Offer and the City Court of Stockholm shall be the court of first instance. The Offer will not be made in the United States, Australia, Hong Kong, New Zealand, Canada, South Africa or Japan or in jurisdictions in which the making of the Offer would not be in compliance with the laws of such jurisdiction or would require registration and/or approval of offer documentation. Preliminary timetable The Offer will be completed as soon as possible provided some formal and legal requirements are met. The current preliminary timetable is as follows (all dates are preliminary and are subject to change): Extraordinary General Meeting in Alpcot Agro Acceptance form to be distributed 10 December 2009 15 December 2009 First day of acceptance period 16 December 2009 Last day of acceptance period 15 January 2010 Settlement 29 January 2010 Financing and extraordinary general meeting in Alpcot Agro The Board will summon an extraordinary general meeting (EGM) to resolve on an authorization for the Board to resolve on the new issue of shares, which is necessary in order to carry out the Offer. The notice of the EGM is expected to be published on 26 November 2009 and the EGM is expected to be held on 10 December 2009. The Board’s proposal for resolution will be made available to the shareholders and be available on Alpcot Agro’s website (www.alpcotagro.se), not later than two weeks prior to the EGM. Stockholm, 24 November 2009 The board of directors Contact persons For additional information please contact: Björn Lindström, Chief Executive Officer +44 (0) 20 7518 0530 Joakim Ollén, Chairman of the Board +46 (0) 70 354 24 07