Update on Alpcot Agro’s management agreement with Alpcot Capital Management Ltd

Alpcot Agro AB (”Alpcot Agro”, “the Company”) and Alpcot Capital Management Ltd (“ACM”) have agreed to amend the management agreement and inter alia effectively reduce the cash payments from Alpcot Agro from 2011 to January 2014 by up to SEK 54.8 million.

In connection with the incorporation of the Company in November 2006, Alpcot Agro entered into a management agreement with ACM. According to the management agreement ACM shall act as the Company’s investment adviser as well as implement the Company’s investment decisions. For its services, ACM is entitled to an annual management fee of 2.25 per cent of the total equity raised by the Company before issue costs (the “Management Fee”).  ACM is also entitled to a performance fee based on the increase in value of the Company as of 31 January 2012 (the “Performance Fee”). The Performance Fee shall be equivalent to 15 per cent of the value appreciation which exceeds an annual hurdle rate of 8 per cent.

Alpcot Agro and ACM have concluded an amended agreement with the following highlights:

• ACM gives up the right to management fees on additional equity raised after 31 December 2010.
• The Management Fee is effectively converted into a fixed management fee for the remainder of the term of the management agreement (the “Fixed Management Fee”). The Fixed Management Fee amounts to SEK 36.5 million per annum for 2011, 2012, 2013 and SEK 3 million for January 2014.
• Alpcot Agro will only be liable to pay 51.3 per cent of the Fixed Management Fee in cash and the remainder will be converted into promissory notes, which carry no interest and mature on 31 October 2014.
• Accrued Management Fee of about SEK 22.8 million for services in 2009 and 2010 is converted into promissory notes, which carry no interest and mature on 31 October 2014.
• Up to 75 per cent, at Alpcot Agro’s discretion, of the total nominal value of the outstanding promissory notes as of 31 October 2014 can be set-off in a share issue provided certain conditions are met.
• ACM can use all or part of the promissory notes in lieu of cash in connection with certain corporate actions such as share issues, subject to required resolutions by the Company.
• ACM waives SEK 5.6 million of the Management Fee for 2010.
• The Performance Fee is cancelled without any compensation.

Joakim Ollén, Chairman of the Board, comments:
“By the agreement we have converted the present management fee to a straight forward fixed fee for provided services. The agreement means improvements in several aspects for Alpcot Agro as well as the Company’s shareholders.”

Stockholm 16 February 2011
The Board of Directors

For additional information, please contact:
Björn Lindström, CEO, Tel: +44 797 985 5556
Joakim Ollén, Chairman, Tel: +46 703 542 407

About Alpcot Agro AB (publ)
Alpcot Agro is a Swedish limited liability company incorporated in 2006. The Company's objective is to generate an attractive total return on invested capital by acquiring and farming agricultural land in Russia and in other CIS member states. The shares in Alpcot Agro are listed on First North under the ticker ALPA and the Company's Certified Adviser is Remium. Additional information is available on www.alpcotagro.com