Sale of Splendo Polska Sp. z o.o.


AS Silvano Fashion Group (“SFG”) has entered into a share purchase agreement
for the sale of all its shares (90% of the share capital) in Splendo Polska Sp.
z o.o. (“Splendo”), a Polish retail subsidiary operating 6 retail outlets. The
closing of the transaction is expected to occur within four weeks, subject to
the fulfillment of certain conditions precedent. Taking account of the SFG's
total investment in Splendo, the transaction is estimated to generate a loss 
of approximately EUR 1.2 million (EEK 18.8 million). 
The sale of this loss-making subsidiary will end cash outflows to Polish
operations and help decrease overall management costs. Splendo will be acquired
by a local wholesale partner of SFG, and Splendo's retail outlets will continue
their business after being rebranded as “Milavitsa” franchise stores. SFG
intends to continue and develop cooperation with its Polish wholesale partners
and distribute both “Milavitsa” and “Lauma Lingerie” branded products through
wholesale and retail channels. 
The sale of Polish retail operations will improve the efficiency of the group,
as SFG's business model adjusts to the global economic downturn. The management
intends to focus its short- and mid-term efforts on SFG's primary target
markets of Russia, Ukraine, Belarus and the Baltics. Further action may be
expected in the coming quarters to ensure that SFG remains competitive in the
changing market conditions. 
The sale of Splendo is not a material transaction within the meaning of the
Tallinn Stock Exchange Rules. The members of the Management Board and the
Supervisory Board of SFG do not have any personal interest in the transaction. 

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