Vision acquires Ukraine subsidiaries

Vision International People Group Pcl (VIP) has acquired 100% of the share capital of Vision Ukraine Ltd, Vision Kyiv Ltd, Vision Lyiv Ltd, Vision Odessa Ltd and Vision Kharkiv Ltd, all of which are registered in Ukraine.

The Acquired Companies operate on an independent and exclusive basis, the downstream selling and distribution activities of Vision International People Group Public Limited in the Ukraine via selling depots and a wholesaler operation. Prior to the transaction, the Acquired Companies were operating the aforementioned selling and distribution activities on the basis of signed franchise agreements with Vision International People Group Public Limited.

The total purchase price payable as consideration for the transaction will be USD 2.0 mln, of which USD 0.5 mln will be paid on the Transfer Date, namely the 15th April, 2005, USD 1.0 mln is to be paid up to six months following the Transfer Date and USD 0.5 mln will be paid by no later than the 31st December, 2005.

According to the unaudited 2004 financial results, Vision Ukraine Group reported a negative net book value of USD 0.24 mln as at 31 December 2004.

Consequently, the goodwill arising from the above acquisition stands at USD 2.24 mln and although not amortised, it will be subject to impairment reviews in accordance with IAS 36. According to VIP, the benefits derived from this acquisition are considered to be important, as the Company will obtain full control of its selling and distribution operations in Ukraine. Management also believes that gaining a direct control of these activities is vital for strengthening its relationship with its distributors.

In terms of financial benefits, VIP anticipates that this acquisition will have an immediate positive impact of USD 5.5 mln and USD 0.2 mln on revenues and bottom line profitability respectively for 2005.