Updated May 7, 2008

   Shareholders of ?5 Retail Group (Pyaterochka, Perekrestok, Merkado chains) took advantage of preemptive right and bought 96

,5% of the company additional emission out as GDR at around $990 million. ?5 places the rest GDR at LSE. Means received from additional emission sale (it is planned to attract $1,026 billion) would be enough to buy Karusel chain, but not enough to maintain another expenses related to this transaction.

   ?5 shareholders bought 96,5% of the company additional emission out as GDR by

the preemptive right, as it was said in the retailer report.

Price per one security totaled $21,32. And 46,4 million GDR costing more than $989,2 million were bought out. Global placement coordinators are CitiGroup and Goldman Sachs International.

   The rest 1 684 704 GDR will be offered within the open market at LSE. Depending on demand within the placement framework more than 3 769 112 treasury GDR can be offered to investors.

Treasury stocks will be sold, if ?5 is sat isfied with the placement price, as says one of the organizers. In the opinion of Otkrutie financial company analyst Irina Yarotskaya, it would be close to the market quotations (recently one ?5 GDR cost $34,75). Transaction was closed on May, 9.

According to the placement results, maximum size of X5 free float at LSE will be 30,8%, as calculated Renaissance Capital analyst Natalia Zagvozdina.

   ?5 Retail Group was established in 2006 by amalgamation of Pyaterochka and Perekrestok chains.

As of 2007 end the company combined 674 Pyaterochka stores, 179 supermarkets and 15 hypermarkets Perekrestok in Russia and Ukraine, as well as 688 franchising stores in Russia and Kazakhstan. In 2007 earnings was $5,28 billion. Alfa Group shareholders own 47,8% of X5, Pyaterochka founders – 21,2%, X5 managers – 6,2%. In free floating at LSE are 24,8% stocks. Company capitalization is $7,58 billion.

   The bigger part from means received within the additional emission sale (it was planned to attract $1,026 billion) will be directed to buy 100% Formata Holding B.V. stocks out that owns Karusel hypermarkets chain (the corresponding option was signed in 2006). Transaction sum totals $920-970 million. According to the option terms, 25% Formata Holding can be paid by ?5 stocks. This opportunity will be used, if one of X5 GDR costs no more than $33.

   Means attracted during X5 additional emission sale are not enough to the accompanying expenses related

to Karusel purchase.

In particular, the company planned to re-brand chain hypermarkets into Merkado Supercenter, as a brand was included to

the transaction. According to ?5 calculations, around $150 million is required. X5 has to spend $223 million more to execute Formata contract with Donson B.V. company, which beneficiaries are Pyaterochka founders Andrey Rogachev and Tatyana Franus. By the agreement Donson has to construct five hypermarkets for

the retailer. A source in ?5 says these means can be attracted as Formata Holding B.V. loans or due to the treasury s tocks sale.