City Service AB - Notification on material event

On City Service AB board decisions

On 21 December 2009 the Board of AB City Service took a decision to implement a
resolution of the extraordinary general meeting of shareholders of the Company
passed on 5 October 2009 to increase the authorised capital of AB City Service
with additional shareholder contributions by way of issuing a new share issue
and established the final terms of the share issue. 

The size of the new share issue will be 12,500,000 ordinary registered shares,
LTL 1 (one) par value each. The issue price is fixed at LTL 5.06 for 1 ordinary
registered share, the par value of which is LTL 1 (one). 

The subscription for the shares of the Company will be performed in two stages:
only those shareholders of the Company will be able to participate in stage I
which owned any shares of the Company at the end of 19 October 2009. They will
be able to acquire newly issued shares pro rata to the par value of shares they
owned on 19 October 2009. The period of subscription for the new shares of the
Company issued in stage I will be from 9:00 (GMT+2) of 28 December 2009 to
14:00 (GMT+2) of 13 January 2010. 

The subscription for the shares of the Company in stage I will take place in
the bank Swedbank AB through all its units in the Republic of Lithuania, the
purchase undertakings can also be sent by fax +370 5 2586935 to the central
office at Konstitucijos pr. 20A, Vilnius, Republic of Lithuania, and by fax
+372 613 2099 to the office of SWEDBANK MARKETS at Liivalaia 8, 15040 Tallinn,Republic of Estonia. 

Stage II will be organised only if all or some of shareholders of the Company,
having the pre-emptive right to acquire newly issued shares of the Company, do
not exercise such a right within the above-mentioned period and a relevant
portion of the new share issue is not subscribed for or is not paid for under
the established terms and procedure. 

Detailed information about the offering, the procedure of subscription and
payment for the shares will be given in the share issue prospectus, which, upon
its approval by the Securities Commission, will be immediately published via
GlobeNewswire, the information system of AB NASDAQ OMX Vilnius, and on the
website of the Company. 

The prospectus of the new share issue was presented to the Securities
Commission on 21 December 2009. 

The major part of proceeds from the new issue will be used for acquisition of
UAB Ecoservice from  UAB Bionovus, a subsidiary of UAB Rubicon Group. UAB
Ecoservice will be acquired for the price no higher than the market value of
the shares determined by independent property appraisers. UAB Ecoservice is a
Lithuanian company operating in the business of collection, transportation and
management of secondary raw material and household waste, having the largest
household waste sorting capacities in the Baltic States. The remaining proceeds
from the new issue will be kept for financing new acquisitions in Lithuania and
in Russia in 2010. 


Vilius Mackonis,
public relations manager
+370 5 239 4900