Sitronics Ups Kvazar Stake

MOSCOW -- JSC SITRONICS, a leading provider oftelecommunications, IT and microelectronic solutions in Russia and the CIS,today announced that it has started the process of consolidation of a 100%stake in Kvazar-Micro Corporation B.V. SITRONICS currently owns a 51% stakein Kvazar-Micro. During the first stage of the transaction, the 36% stakewill be acquired from Melrose Holding Company for US$ 116.9 million. Theacquisition will be financed by a combination of cash and SITRONICS' stock.As a result of the transaction, Melrose Holding Company will acquire a 3.07%stake in SITRONICS. Kvazar-Micro will acquire the remaining 13% of itsshares from Melrose Holding Company within two years.

Sergey Aslanyan, President and Chief Executive Officer of SITRONICS,commented: "Kvazar-Micro is the leading system integrator in Russia and theCIS which is growing faster than the market.Kvazar-Micro provides innovative technological solutions in a number ofsectors, including education, medicine, transport and agriculture.The acquisition of the remaining stakes in Kvazar-Micro will take us to thenext level in consolidation of our assets and creation of a unified companywith the higher efficiency levels."

JSC Sitronics (London: SITR)