Pharmacy Chain 36.6 announces the sale of 19.99 percent in Veropharm

DECEMBER 01, 2005, MOSCOW – OAO Pharmacy Chain 36.6 [MICEX: RU14APTK1007; RTS: APTK] announces the sale of a 19.99-percent stake in its production subsidiary ZAO Veropharm.

On November 17, 2005, a wholly owned subsidiary of Pharmacy Chain 36.6’s signed an agreement for the sale of a 19.99-percent stake in Veropharm to a company of Troika Dialog group.  The proceeds from the sale are expected to be used for further expansion of the pharmacy chain “Apteka 36.6” and for reduction of corporate debt. The financial details of the transaction are not disclosed.

On the same day an agreement was signed with Troika Dialog, whereby Troika Dialog will provide consulting services and act as lead manager in the event of certain future sales of Veropharm’s common stock.

Veropharm is one of the leading Russian pharmaceutical companies producing 327 pharmaceutical products. Veropharm owns three production facilities in Voronezh, Belgorod and Pokrov.  Veropharm controls about 75 percent of Russian plaster (bandages) production and produced about 80 percent of domestic oncology medicines. The company’s primary markets are Russia, Ukraine, Belarus and the Baltic States.

Commentary

Artem Bektemirov, CEO:

«We decided to separate the production and retail businesses in order to create new possibilities for the development and growth of Veropharm and our market leading pharmacy chain. It is expected that investments in Veropharm will be increased significantly and that Veropharm will further strengthen its position in pharmaceutical market. At the same time, other retail business will receive financial resources for further expansion and debt reduction».

Press-release