IRF (AIM: IRF) is pleased to announce that it has entered into a definitive agreement with Antonios Athanasoglou and Ilias Lianos (the 'Sellers') to acquire between 28 per cent. and 30 per cent. of the issued share capital of Proton Investment Bank SA ('Proton') for between €120.1 million and €128.5 million (the 'Acquisition'). The lower percentage of Proton shares will be acquired if it is necessary to avoid the triggering of a mandatory offer to the other shareholders of Proton in the absence of the Greek Capital Market Commission granting a waiver.

Angeliki Frangou, Chairman, stated, 'We are excited about the acquisition of a controlling position in Proton and the platform for growth it represents. We look forward to playing a significant role in the ongoing consolidation of the banking sector in Southeastern Europe.'

Approvals

Completion of the Acquisition constitutes a reverse takeover under AIM Rules and is conditioned on approval of the Company's shareholders. Shareholders owning approximately 65.05% of the issued share capital of IRF have entered into voting commitments to vote or procure votes in favour of the Acquisition. These shareholders include Angeliki Frangou, Chairman of IRF, Andreas Vgenopoulos, deputy chairman of IRF and Georgios Kintis, chief executive officer of IRF. These voting commitments include the 20% of the issued share capital held by the Company's founding shareholders, which are required to be voted in accordance with the majority.

The agreement with the Sellers is not conditioned on the approval of the Bank of Greece, although such approval will be sought. Based on previous informal discussions with the Bank of Greece, IRF believes the Bank of Greece's approval is likely to be forthcoming. If such approval is not granted, IRF may be required to divest of its investment in Proton.

About Proton

Proton focuses on investment banking and the provision of specialised corporate advisory and investment services and was listed on the Athens Stock Exchange on 22 December 2005. Proton reported operating income of €31.992 million in 2005 and an associated profit before tax of €24.669 million. Proton's book value at 31 December 2005 was €199.27 million.

Proton has announced that is has commenced a merger process with Omega Bank S.A. ('Omega'), which has a strong focus on retail lending activities. This merger is subject to approval by both Proton's and Omega's shareholders as well as regulatory approval and is not expected to complete until September 2006. Omega operates 17 retail branches across Greece.

Board Structure of Proton and IRF

Following the Acquisition, the Sellers have agreed to effect, to the extent possible, the resignation of 4 of the 7 existing directors of Proton. These directors will be replaced by 4 directors nominated by IRF, one of whom must be independent of IRF. Angeliki Frangou, Chairman of IRF, and Georgios Kintis, Chief Executive of IRF, have agreed to become the new directors of Proton and IRF will appoint a further 2 directors in due course. The Sellers are executive directors of Proton and own in aggregate approximately 25 per cent. of Proton's share capital. It is intended that they will remain executive directors of Proton following completion of the Acquisition.

As part of the Acquisition, IRF will enter into separate arrangements with Proton ensuring that IRF is provided with all necessary information to enable IRF to comply with its reporting obligations (subject to Proton's obligations under Greek law).
No new proposed directors are being considered by IRF at this time.

Impact of Omega Merger

If the Omega merger happens, IRF's shareholding in Proton will be diluted to between approximately 20.2 per cent. and 21.6 per cent. The Sellers and IRF have agreed that if Proton merges with Omega, IRF and the Sellers will seek (to the extent possible) to change the composition of the Proton board so that there are a total of 11 directors, of which 6 will be nominated by IRF ( one of whom must be independent of IRF), one will be nominated by the Omega's current management and 4 will be nominated by the Sellers.

Funding

The Acquisition will be funded with cash proceeds raised from the placing conducted in November 2005 upon IRF's admission and trading on AIM. The net placing proceeds, approximating $252 million, are held in trust in a trust fund
in Bermuda and release of such trust funds is conditional upon majority shareholder approval of the Acquisition.

Qualified Business Combination

The Acquisition will constitute a 'Qualified Business Combination' under the Company's bye-laws. A reverse takeover document will be sent to IRF shareholders in due course. Until such time as that document is sent out, the Company's ordinary shares (AIM: IRF) and warrants (AIM: IRFW) will be suspended from trading on AIM.

Advisers

IRF was advised on the acquisition by The Investment Bank of Greece, S Goldman Advisors Limited, and Collins Stewart Limited which also acts as the Nominated Adviser and UK Broker.