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Ramsey, the Isle of Man, July 14, 2014 - IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading software developer and IT services provider in Central and Eastern Europe, today announced details of proposal for shares and GDRs in IBS Group Holding to be exchanged for shares in Luxoft Holding, Inc.

IBS Group Holding Limited ("IBS Group Holding")

Proposal for shares and GDRs in IBS Group Holding to be exchanged for shares in Luxoft Holding, Inc., ("Luxoft"), cancellation of IBS Group Holding's GDR programme and Frankfurt Stock Exchange listing

1. Introduction

IBS Group Holding today announces the details of proposals it intends to make to reorganize IBS Group (the "Proposals") by:

o cancelling certain securities held by IBS Securityholders, and distributing Luxoft B Shares to such IBS Securityholders, which will, as a result of being transferred, convert to Luxoft A Shares; and

o de-listing the IBS Group GDRs from the Frankfurt Stock Exchange.

2. The Proposals

(a) General

IBS Group Holding intends to make the Proposals to holders of IBS Group Holding's global depositary receipts (the "IBS Group GDRs") and IBS Group Holding's issued and outstanding ordinary shares (the "IBS Group Shares") other than BXA Investments Ltd. and Croyton Limited (BXA Investments Ltd. and Croyton Limited being the "Key Shareholders"). The purpose of the Proposals is to rationalize the ownership structure of IBS Group Holding. Following the successful implementation of the Proposals, IBS Group GDRs and IBS Group Shares, other than those that are held by the Key Shareholders (the "Scheme Shares", together with the IBS Group GDRs the "Scheme Securities") will be cancelled.  Holders of Scheme Securities (the "Scheme Securityholders") will hold shares in Luxoft directly, rather than indirectly through IBS Group Holding (as they do at present). If the Proposals are implemented, IBS Group Holding will become wholly-owned by the Key Shareholders.


If the Proposals are implemented, IBS Group Holding will transfer 7.7 million Luxoft B Shares, which will, as a result of being transferred, convert to Luxoft A Shares (the "Luxoft Shares") to the Scheme Securityholders in consideration for the cancellation of the Scheme Securities that they hold, and IBS Group Holding's GDR programme will be terminated.

The Proposals are intended to be implemented by means of a scheme of arrangement under Section 157 of the Isle of Man Companies Act 2006 (the "Scheme") and are subject to shareholder approval at a court-convened meeting (the "Court Meeting") and an extraordinary general meeting (the "General Meeting"). It is expected that a circular setting out full details of the Scheme and related matters will be sent to Scheme Securityholders in early August 2014 (the "Scheme Circular"). If approved by the holders of the Scheme Shares (the "Scheme Shareholders"), and subject to the satisfaction of certain other conditions, the Scheme is expected to become effective in late September 2014 (the "Scheme Effective Date").

Holders of IBS Group GDRs ("IBS Group GDR Holders") will be given the opportunity to direct Bank of New York Mellon (the Depositary under the IBS Group Holding's GDR programme) whether to vote the shares represented by their IBS Group GDRs for or against the Scheme at the Court Meeting and the General Meeting.

IBS Group Holding is expected to have the same board and the same business and operations immediately after the Scheme Effective Date as it had before such date, save that its economic interest in Luxoft will be reduced from 68.6% to 45.2%, and its voting rights in Luxoft will be reduced from 91.4% to 83.7%. IBS Group Holding also undertakes not to sell more than 1 million shares of Luxoft during the 6 month period starting on the Scheme Effective Date.

(b) Principal Steps

The principal steps involved in the Proposals are as follows:

(i) Under the Scheme, all the IBS Group Shares which are Scheme Shares will be cancelled on the Scheme Effective Date, and Luxoft B Shares will be transferred to Scheme Securityholders as described below, whereupon they will convert to Luxoft A Shares.

(ii) If the Scheme becomes effective, the IBS Group GDRs will be cancelled, and each IBS Group GDR Holder at the Scheme record time will become entitled to receive Luxoft Shares on the following basis:

for each IBS Group GDR       0.9 Luxoft Shares.

(iii)  If the Scheme becomes effective, Scheme Shareholders at the Scheme record time will receive, in exchange for their IBS Group Shares, Luxoft Shares on the following basis:

for each Scheme Share        0.9 Luxoft Shares.

(iv) Thereafter, IBS Group Holding anticipates that the IBS Group GDRs will be de-listed from the Frankfurt Stock Exchange, and the IBS Group GDR programme will be terminated.

(c) Effect of Implementation of Proposals

The effect of implementation of the Proposals, in summary, will be as follows:

(i) Scheme Securityholders will hold Luxoft Shares directly, rather than indirectly through IBS Group Holding as they do now.

(ii)  For each Scheme Security held at the Scheme Record Date, Scheme Securityholders will receive 0.9 Luxoft Shares.

(iii) IBS Group Holding will be wholly owned by those IBS Group Shareholders who are not Scheme Shareholders, namely the Key Shareholders.

(iv) There will no longer be any IBS Group GDRs in issue.

(v) IBS Group Holding will be delisted from the Frankfurt Stock Exchange.

(d) Exchange Ratio

In summary, under the terms of the Scheme, each Scheme Securityholder will receive 0.9 Luxoft Shares for each of the Scheme Securities they hold at the Scheme Record Time (the "Exchange Ratio").

Renaissance Securities (Cyprus) Limited ("Renaissance") calculated the fair values of IBS Group Holding and Luxoft in accordance with the principles set out in the International Valuation Standards as at 30 June 2014 (the "Valuation Date"). Renaissance derived the fair value of the equity capital of IBS Group Holding and Luxoft as an average of their (1) fundamental value and (2) market value.

The Board considers the Proposals to be fair and reasonable and in the best interests of IBS Group Holding and holders of IBS Group Shares (including both Scheme Shareholders and holders of IBS Group Shares in the form of IBS Group GDRs) as a whole having been so advised by Renaissance. 

The Special Committee of independent members of the Board considers the Proposals to be fair and reasonable from a financial point of view to the Scheme Shareholders.  In reaching its opinion, the Special Committee considered, among other things, a written opinion from Jefferies International Limited ("Jefferies") regarding the fairness, from a financial point of view, to Scheme Securityholders of the Exchange Ratio.

(e) Rationale for Proposals

Transaction Principles

The following are guiding principles for and objectives of the Proposals:

· Rationalize the IBS Group corporate structure

· Propose an exchange on fair and reasonable terms

· Delist IBS Group Holding to implement restructuring of IBS Group Holding's IT Services Segment

· Retain existing corporate governance in Luxoft

Benefits to Scheme Securityholders

IBS Group Holding expects that the benefits to the Scheme Securityholders if the Proposals are implemented will include allowing Scheme Securityholders to:

· Have direct ownership of Luxoft shares

· Achieve higher liquidity of their investments

· Own a stock with high growth potential without exposure to IBS Group Holding's IT Services Segment

· Realize stakes in IBS Group at a fair price

· Avoid risks related to restructuring of IBS Group Holding's IT Services Segment

· Avoid the risks and inefficiencies deriving from their ownership of shares in a holding company

Scheme Securityholders will receive Luxoft shares with a value that is 15% higher than the IBS Group GDRs that they will surrender under the Proposals, b ased on the closing prices of both IBS Group GDRs and Luxoft shares on June 18, 2014. Importantly, the brokers' average target price for Luxoft shares as of June 18, 2014 implies potential upside of 22% in Luxoft shares, which compares to 8% upside in IBS Group GDRs.

Furthermore, the liquidity of Luxoft shares is considerably higher than IBS Group GDRs: average daily trading volume of Luxoft shares for the month ending on June 18, 2014 was $5.1 million, compared to $0.2 million for IBS Group GDRs. In addition, the liquidity in Luxoft shares is expected to increase following the Scheme implementation, as its free float would increase by 88%: from the current 8.8 million shares to 16.5 million shares.

(f) Conditions to implementation of the Scheme

The implementation of the Scheme will be conditional on:

(i) the approval of the Scheme by a majority in number, representing at least 75 per cent. of the voting rights, of the Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting (or at any adjournment of such meeting);

(ii) the passing of the shareholder resolutions set out in the notice of the General Meeting to approve the Scheme and various matters in connection with the Scheme, including the cancellation of the Scheme Shares at the General Meeting (or any adjournment of such meeting);

(iii)  the sanction of the Scheme by the Isle of Man Court at a court hearing (the "Court Hearing"); and

(iv) a copy of the court order sanctioning the Scheme handed down by the Isle of Man Court, together with a copy of the Scheme, having been delivered to the Isle of Man Registrar of Companies for registration and having been duly registered.

The date of the Court Hearing (at which it is proposed that the Isle of Man Court sanction the Scheme) will be set out in the Scheme Circular. Any IBS Group Shareholder or IBS Group GDR Holder may appear at the Court Hearing in person or through counsel to support or oppose approval by the Isle of Man Court of the Scheme or make representations to the Isle of Man Court in relation to the Scheme. Any change to the date of the Court Hearing will be published by means of electronic media and, if required by the German Securities Trading Act (Wertpapierhandelsgesetz) or the German Securities Prospectus Act (Wertpapierprospektgesetz), as an ad hoc release via an electronic information system and IBS Group Holding's website and as a supplement to this prospectus.

Scheme Securityholders - For further information please dial in to the conference line

on Thursday, July 17, 2014

at 1:00 pm (Moscow) / 10:00 am (London) / 5:00 am (New York)

Conference language: English

Participants of the call:

Management of IBS Group Holding

To access the call, please dial:

Russian Federation dial-in #: 8 800 100 6268

UK dial-in #: 0 800 756 3429

Germany dial-in #: 0 800 182 0040

USA dial-in #: 1 877 407 8293

International dial-in #: 1 201 689 8349

To listen to a telephone replay of the conference call, please dial:

For US callers: 1 877 660 6853

For international callers: 1 201 612 7415

Conference ID #: 13586713

The replay will be available from two hours as of the end of the call and up to 11:59 p.m. EST on July 24, 2014.

Replay of the conference call will be also available at the following link (approximately in 2 hours after the call):

http://www.ibsgr.com/investor-relations/presentations-and-webcasts/

IBS Group Holding:
Investor Relations:                                       

Andrei Novikov                                           

IR Director                                       

tel: +7 (495) 967 8000 (ext.3095)                

anovikov@ibs.ru

This announcement has been issued by and is the sole responsibility of IBS Group Holding.

This announcement is an advertisement and not a prospectus and you should not subscribe for or purchase any shares on the basis of information contained in this announcement.

This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, issue, subscribe for, sell or otherwise dispose of any securities, nor any solicitation of any offer to purchase, otherwise acquire, issue, subscribe for, sell or otherwise dispose of, any securities.

Neither the contents of IBS Group Holding's website nor the contents of any website accessible from hyperlinks on this announcement or IBS Group Holding's website (or any other website) is incorporated into, or forms part of, this announcement.

 Renaissance, which is authorised and regulated in Cyprus by the Cyprus Securities and Exchange Commission, is acting exclusively for IBS Group Holding and no one else in connection with the Proposals and will not regard any other person (whether or not a recipient of this document) as its client in relation to the Proposals and will not be responsible to anyone (whether or not a recipient of this document) other than IBS Group Holding for providing the protections afforded to clients of Renaissance or for providing advice in connection with the Proposals or any transaction matter or arrangement referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed on Renaissance by the Cyprus Securities and Exchange Commission or by the regulatory regime established thereunder, Renaissance accepts no responsibility whatsoever for the contents of this document, including its accuracy or completeness or for any other statement made or purported to be made by it, or on its behalf, in connection with IBS Group Holding, Luxoft or the Proposals. Renaissance accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

Jefferies, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority and has its registered office address at Vintners Place, 68 Upper Thames Street, London EC4V 3BJ, United Kingdom, is acting exclusively for the Special Committee of the Board of IBS Group Holding and no one else in connection with the Proposals and will not regard any other person (whether or not a recipient of this document) as its client in relation to the Proposals and will not be responsible to anyone (whether or not a recipient of this document) other than the Special Committee of the Board of IBS Group Holding for providing the protections afforded to clients of Jefferies or for providing advice in connection with the Proposals or any transaction matter or arrangement referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed on Jefferies by the FSMA or by the regulatory regime established thereunder, Jefferies accepts no responsibility whatsoever for the contents of this document, including its accuracy or completeness or for any other statement made or purported to be made by it, or on its behalf, in connection with IBS Group Holding, Luxoft or the Proposals. Jefferies accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

The release, publication or distribution of this document and/or the accompanying documents in or into jurisdictions other than Isle of Man or Germany, may be restricted by law and therefore this document and/or the accompanying documents may not be distributed or published in any jurisdiction except in compliance with any applicable laws and regulations. Persons into whose possession this document and/or the accompanying documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security.

This release contains certain forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to these uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement. IBS Holding Limited disclaims any obligation to update any forward-looking statements contained herein, except as required pursuant to applicable law.

The Scheme Shares have not been, and will not be, registered under the US Securities Act of 1933 (the "Securities Act"), or the securities laws of any other jurisdiction, and may not be offered or sold in the U.S. or to U.S. Persons (as defined in the Securities Act) unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available.

Any Scheme Shares issued pursuant to the Scheme will be issued in reliance on the exemption from the registration requirements of the Securities Act provided in Section 3(a)(10) of the Securities Act based on the approval of the Scheme by the Court. If the Court approves the Scheme, its approval will constitute the basis for the Scheme Shares to be issued without registration under the Securities Act, in reliance on the exemption from the registration requirements of the Securities Act provided by Section 3(a)(10).

The Scheme Securityholders must rely on their own examination of the terms of the Scheme, including the merits and risks involved. The Scheme Circular has not been filed with or reviewed by the U.S. Securities and Exchange Commission or any state securities authority and none of them has approved, disapproved, passed upon or endorsed the merits of the Scheme or the accuracy, adequacy or completeness of the Scheme Circular. It is unlawful to make any representation inconsistent with the provisions of this paragraph.

No clearances have been, nor will be, obtained from the Securities Commission of any province or territory of Canada; no prospectus in relation to the Luxoft Shares has been, or will be, lodged with, or registered by The Australian Securities and Investments Commission; and no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the Luxoft Shares. Accordingly, subject to certain exceptions, the Luxoft Shares may not, directly or indirectly, be offered or sold within Canada, Australia or Japan or offered or sold to a resident of Canada, Australia or Japan.

IN MAKING A DECISION, SCHEME SECURITYHOLDERS MUST RELY ON THEIR OWN EXAMINATION OF THE SCHEME INCLUDING THE MERITS AND RISKS INVOLVED IN THE PROPOSALS. THIS ANNOUNCEMENT DOES NOT IN ANY WAY CONSTITUTE A RECOMMENDATION TO SCHEME SHAREHOLDERS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SCHEME SHAREHOLDERS SHOULD SATISFY THEMSELVES CONCERNING THE TAX, LEGAL, CURRENCY AND OTHER ECONOMIC CONSIDERATIONS RELEVANT TO THE PROPOSAL AND ENSURE THAT THEY ARE THOROUGHLY FAMILIAR WITH THE TERMS OF THE PROPOSAL BEFORE PARTICIPATING IN THE PROPOSAL.

The final terms of the Proposals will be set forth in the Scheme Circular. Scheme Shareholders are strongly advised to read this announcement and the Scheme Circular and related materials, as these contain important information. In considering the Proposals, Scheme Shareholders should rely only on the information contained in this announcement and in the Scheme Circular.

This announcement is directed only at (i) persons outside the United Kingdom; (ii) persons having professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order"); (iii) persons as described in Article 49(2)(a) to (d) of the Order; or (iv) to persons to whom it may otherwise be lawfully communicated (all such persons referred to in (i) to (iv) above together being referred to as "Relevant Persons"). The investment activity referred to herein is only available to Relevant Persons and will be engaged in only with Relevant Persons. Any person who is not a Relevant Person should not act or rely on this announcement or any of its contents.

This announcement is not an offer, or an invitation to make offers, to sell, exchange or otherwise transfer securities referred to herein in the Russian Federation to or for the benefit of any Russian person or entity and does not constitute an advertisement or offering of securities in the Russian Federation within the meaning of Russian securities laws. The securities have not been and will not be registered in the Russian Federation and are not intended for "offering", "placement" or "circulation" in the Russian Federation (each as defined in Russian securities laws) unless and to the extent otherwise permitted under Russian law.

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