Market announcement

Title

Sale of shares in PTA Grupp AS

Message

AS Silvano Fashion Group (“SFG”) entered into an agreement for the sale of all
shares in PTA Grupp AS (“PTA”) held by SFG (which represent 100% of the share
capital of PTA) to PTA Holding OÜ for approximately EUR 1 million. The
transaction was performed immediately upon signing. 

Approximately half of the purchase price of PTA was paid on the date of this
release by way of taking over certain liabilities of SFG. The remaining half of
the purchase price will be paid in cash by 31 December 2011 at the latest,
carrying interest until full payment. The obligation to pay the purchase price
will be secured by a share pledge over 100% of all shares in PTA in favour of
SFG. 

PTA operates in the field of manufacture, retail and wholesale of women's
apparel under the „PTA“ trademark. With the sale of the apparel business, SFG
will focus on its core business - manufacturing and sale of lingerie. The sale
will enable SFG to reallocate financial and managerial resources to its core
operations, decreasing overheads and improving the efficiency of management.
The effect of the sale with respect to the profit and revenue of the SFG group
is not expected to be significant. The estimated accounting loss from the
transaction in the consolidated financial statements of SFG will be in the
range of EUR 1.2 - 1.7 million, depending on the results of PTA's operations
the second quarter of 2009. The accounting loss from the transaction in the
stand-alone financial statements of SFG will be approximately EUR 3.2 million
However, in the long term the effect on SFG's net profit is expected to be
positive, as PTA made a net loss of EUR 501 thousand in 2008 and continued to
incur losses in the first quarter of 2009. 

The results of PTA's operations and the data from the annual reports of PTA
over the two last years, in the form of comparative table, are presented in the
appendix to this release. There have been no significant changes in the
economic activities after the end of last financial year. 

As at 25 June 2009, PTA had two loans and an overdraft from Danske Bank A/S
Estonian branch in the aggregate amount of approximately EUR 2.2 million, and a
loan from SFG in the amount of approximately EUR 0.1 million. The loans by
Danske Bank A/S Estonian branch are secured by a surety provided by SFG. The
liability of SFG to Danske Bank A/S Estonian branch is in turn secured by a
commercial pledge over PTA's assets. PTA also trades with SFG's affiliates in
the ordinary course of business. There are no active court or arbitration
procedures in respect of PTA, which could substantially influence its economic
activities. 

Prior to the sale, 100% of all shares in PTA belonged to SFG. The share capital
of PTA is EEK 20,000,010, the nominal value of shares is EEK 10 per share. The
sole member of the management board of PTA is Mr. Peeter Larin; the members of
the supervisory council of PTA are Indrek Rahumaa, Jaak Raid and Dmitri
Ditchkovsky. 

PTA Holding OÜ is related to Peeter Larin (a member of the management board in
PTA), who is a member of the management board and a shareholder in PTA Holding
OÜ. Therefore, the transaction is made with a related party within the meaning
of the Tallinn Stock Exchange rules. The transaction is not a material
transaction with a related party within the meaning of the Tallinn Stock
Exchange rules. Other members of the management board and the supervisory
council of SFG do not have personal interest in the transaction. 


Dmitry Ditchkovsky
Chairman of the Management Board
AS Silvano Fashion Group
Tel +372 6 710 700