RUSNANO Board of Directors Approves Company’s First Exit from Investment Project

23 May 2012

RUSNANO’s Board of Directors has approved the company's first exit from a previously-invested company. RUSNANO sells its 27.6 percent equity stake in Advanced Technologies Center, a leading producer of scanning probe microscopes and atomic scales. The sale to the project applicant, NPP CPT will generate IRR of 29.5 percent on RUSNANO’s investment.

RUSNANO’s co-financing enabled the high-tech company founded by Moscow State University professor Igor Yaminsky to reach next level of business and to expand its line of scanning probe microscopes and SPM software. RUSNANO has invested 50 million rubles in the project, out of the 140 million rubles originally planned. In December 2011 the portfolio company opened a production site which will double its production capacity up to the revenue levels of 70 million rubles by the end of 2012.

The deal meets two essential RUSNANO’s criteria for successful exit: IRR is no lower than was planned, and the project is able to develop independently.

The main product of the Advanced Technologies Center is the FemtoScan series of scanning probe microscopes, high-precision instruments that use the mechanical motion of a probe (cantilever) to study the surface of a sample at the nanoscale. SPMs are used for research in chemistry, physics, biology and medicine, as well as for industrial applications such as surface quality control. The company also produces SPM control and image processing software, as well as precision scales capable to detect substances at atomic level.

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RUSNANO’s Board of Directors has approved the company’s participation in a project to establish Russia's first commercial-scale production of silicon carbide micropowders. Silicon carbide has exceptional physical and chemical properties, including high hardness (softer only than diamond and boron nitride), a low thermal expansion coefficient, chemical inertness, resistance to fire and high durability. The silicon carbide micropowders produced under the project is used to cut and polish silicon and sapphire crystals, as well as other materials used as substrates for microelectronics, power electronics and solar cells. Silicon carbide is also used to manufacture abrasive tools and materials, ceramic and fire-resistant articles, high-voltage arrestors and varistors, as well as being used as an additive in the steel industry. The advanced technology used by the project, both during the production of crystalline silicon carbide and at the stage of processing into the finished product, provides significant savings through reduced energy consumption and an increase in the yield of finished products with improved consumer properties.

The Board of Directors also approved the financing of a project to launch production of lithography systems with a 22 nanometer and higher resoluton, based on electron-beam maskless lithography. Lithography, a central process in microchips manufacturing, currently operates with a resolution of about 32 nanometres. Electron-beam maskless lithography is one of the main contenders for the next generation of the technology that will enable a higher resolution process. It is a more attractive solution than alternative approaches, since it does not require expensive masks, uses smaller-scale equipment and requires less spending on consumables.

Final details of RUSNANO’s new investment projects will be published after investment agreements have been signed by their participants.

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The members of the Board of Directors also heard information on the closing of an investment project to produce multimedia multiprocessor systems-on-a-chip, previously approved for funding by RUSNANO’s Supervisory Council but not invested by the company. The reason for the project's closing was the applicant's refusal to implement the project on the previously agreed terms.

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The Board also heard a report regarding investment decisions taken in Q4 2011 and Q1 2012, related to the volume of investments within the competency of RUSNANO’s Executive Board. RUSNANO’s Executive Board may independently approve financing of the projects with proposed co-investment from RUSNANO from 300 million rubles to 1.3 billion rubles.

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The Board of Directors also recommended to the general shareholders' meeting that RUSNANO approve PricewaterhouseCoopers Audit as an auditor for the company's statutory audit of financial statements and the audit of consolidated financial statements for 2012, prepared to meet the International Financial Reporting Standards.

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Finally, the Board of Directors noted the information on Executive Board members Alexander Losyukov and Andrey Malyshev stepping down from their posts, and elected Andrei Rappoport to the post of the Executive Board member, effective as of the date of his employment contract.

Reference

RUSNANO was founded in March 2011 as an open joint stock company through reorganization of state corporation Russian Corporation of Nanotechnologies. RUSNANO’s mission is to develop the Russian nanotechnology industry through co-investment in nanotechnology projects with substantial economic potential or social benefit. The Government of the Russian Federation owns 100 percent of the shares in RUSNANO. Anatoly Chubais is CEO and chairman of the Executive Board of RUSNANO.

Work to establish nanotechnology infrastructure and training for nanotechnology specialists, formerly conducted by the Russian Corporation of Nanotechnologies, has been entrusted to the Fund for Infrastructure and Educational Programs, a non-commercial fund also established through reorganization of the Russian Corporation of Nanotechnologies.