City Service AB - Notification on material event

On the intensions to acquire Fervėja UAB

On 19 December 2008 City Service AB has signed an authorised capital increase
agreement (share subscription agreement) with Fervėja UAB, under which 99.9% of
Fervėja UAB shares shall be acquired. Shares will be registered with the
Register of Legal Entities and the control of Fervėja UAB shall be transferred
to City Service AB after the receipt of authorization from the Competition
Council of the Republic of Lithuania. 

Fervėja UAB has concluded a share sale - purchase agreement with Būsto
investicijų valdymas UAB and acquired 100% share stock of the company. Būsto
investicijų valdymas UAB possesses 100% share stock in Karoliniškių būstas UAB,
Viršuliškių ūkis UAB,  Naujamiesčio būstas UAB and  Antakalnio ūkis UAB. These
companies manage 1.9 million sq. m. of residential facilities in Vilnius,
Lithuania. In 2007 its turnover reached LTL 27.7 million (EUR 8 million). 

“We are proceeding with market consolidation processes, as we have planned.
This intended acquisition will be the most important step in expansion of the
Group since our shares became publicly listed on the stock exchange - the area
of residential facilities under our management in Lithuania will increase by
28% - from 6.6 million to 8.5 million square meters. This acquisition will
allow us to increase efficiency of our activities in Vilnius even more. We
expect these companies to show good results in future”, - stated Žilvinas
Lapinskas, Director General of City Service AB. 

The leader of facility management market in the Baltic States City Service
Group now consists of 23 facilities management companies operating in
Lithuania, Russia, Latvia and Ukraine. The Group manages 11.4 million square
meters of facilities. 

Vilius Mackonis,
Public relations manager
+370 5 239 4900