Aurora gets go-ahead for increased Unistream stake

The AIM-listed investment vehicle has finally been given the green light by Russia’s Central Bank to increase its stake in a Moscow-based money transfer business – a deal first agreed last November.

Aurora Russia, an AIM-listed investment vehicle that backs small and mid-market Russian companies, has finally gained approval from the country’s central bank to take a 26 percent stake in money transfer business Unistream Bank.

The Central Bank of Russia has just approved Aurora’s request to increase its stake above the 20 percent mark, some eight months after the company originally agreed the deal. As a result, Aurora has bought an additional 8.3 percent stake for $6.4 million, taking its total holding in Unistream to 26 percent. It has now invested a total of $20 million in the business.

Unistream, which is largely based in Moscow, allows immigrants from the former Soviet republics to send money back from Russia to their families at home. The central bank has previously estimated this market to be worth somewhere between $3 and $6 billion, and Unistream is one of the biggest players – last year it transferred $1.85 billion.

Aurora said Unistream’s business was still growing rapidly – at the end of last month its monthly volumes hit $300 million, 90 percent up from the same time last year. Director John McRoberts said: “The Russian money transfer market continues to show extremely high rates of growth and is one of the fastest growing money transfer regions in the world. ”

Unistream was launched in 2001 as a division of UniAstrum, one of Russia’s biggest retail banks. UniAstrum decided last year to demerge the business and bring in Aurora as a professional investor, in preparation for a flotation some time in 2008. The bank still owns the remaining 74 percent of the business not owned by Aurora.

Aurora Russia listed on London’s Alternative Investment Market in March 2006, raising £75 million. So far, it has invested a total of £30.5 million across three deals.