City Service AB - Notification on material event

On the approval of City Service AB share issue prospectus and planned acquisition of Ecoservice shares

The largest facility management company group in the Baltic states City Service
will purchase waste management company group Ecoservice.  This decision is
aimed to increase value of City Service group by integration of Ecoservice
group and by further rapid expansion of Ecoservice group in Lithuania and
foreign markets. 

Žilvinas Lapinskas, Director General of City Service, stated: Decision to
acquire Ecoservice was made estimating the expansion potential this company has
and also its plans to develop in St.Petersburg city market. We are sure that
successful growth of this promising company inside of City Service group will
bring extensive benefits to our shareholders. 

Ecoservice shares are valued at LTL 56.8 million, according to estimations made
by independent valuator Catella Corporate Finance.  The planned acquisition
price is LTL 55 million. 

Mr. Lapinskas stated, that the acquisition price was determined by Ecoservice's
development perspectives in near future, high efficiency and attractive ratios
of the acquisition price to activity indicators for 2009. 

Ecoservice owns largest waste management company group in Lithuania. Since 2007
the company has actively expanded its activities in Lithuania. Ecoservice group
supplies services of collection, transportation and processing recycled
materials and municipal waste in Vilnius and Klaipėda cities, Varėna, Trakai,
Šilutė, Širvintos and Pagėgiai districts. The company has vast network for
collection of recycled materials and provides waste sorting service. In 2009,
EBITDA of Ecoservice is expected to reach LTL 9.2 million. 

Funds for acquisition of Ecoservice will be attracted from the new City Service
AB share issue. Decision on the issue was made by the Board of City Service on
21 December 2009. The remaining proceeds from the new issue will be kept for
financing of new acquisitions in Lithuania and Russia in 2010. 

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. 

On 23 December 2009 the Securities Commission has approved the prospectus of
the new issue of 12,500,000 ordinary registered shares of City Service AB, code
123905633. 

The prospectus of City Service new share issue, and short presentation of the
new issue and Ecoservice are enclosed with this announcement. 

Vilius Mackonis
Public Relations Officer
+370 5 239 4900

Attachments:

city service ab offer of new issue.pdf

cs_newissue and ecoservice presentation_en.pdf