OREANDA-NEWS. The mass media has lately discussed the fact that “KAMAZ” OJSC was included into the list of the enterprises subject to privatization in 2007. This “news” appears annually (with a new date). The transfer of privatization cools the burning interest in the theme till the following year. Still, the questions exist; we’ll try to explain the essence of the matter.

Realization of the strategic development program of the Company requires substantial capital investments. They are necessary for development of new products, reengineering of business-processes, profound modernization of production capacities. Financing of the investment program is also expected due to the supplementary emission placement of the Company’s shares (IPO), which is planned for the second half year of 2008. The volume of the possible shares placement has not yet been determined. It will depend on estimation of the costs necessary for investment program financing, optimization of the capital structure (i.e. optimum relationship of loan and share capital), and also financial market opportunities.

It’s necessary to fulfill essential preparatory work content for the successful IPO of the Company.

Firstly, it’s planned to prepare the financial statements by IAS at least for 3 years; secondly, it’s necessary to conduct a range of PR and IR events increasing the level of the Company’s corporate transparence for the investment community.

At the end of 2006 “KAMAZ” OJSC signed the contract with PricewaterhouseCoopers on audit of the consolidated financial statements by IAS for 3 years (2005, 2006 and 2007 years). The results of IAS for 2005 and 2006 will be published in the 3rd quarter of 2007, and for 2007 – in July 2008.

It is expected that the increase of free-float shares owing to IPO, improvement of the corporate image and the Company’s transparence, and above all - qualitative changes of the production line and productive efficiency due to the investment projects realization, will positively influence the growth of the Company’s share cost after the placement.

In this situation the Company’s share holders will be able to receive a considerably larger profit from the growth of their shareholding cost than from the sale of shares on the eve of the placement on the stock exchange. The attitude of the Company management to this issue was supported (by the RF Ministry of Economic Development as well).

The property of the Russian Federation includes 34,01% of the authorized capital stock of “KAMAZ” OJSC. As provided by the current legislation on privatization, the share of the government property can be lowered to the blocking shareholding (25% + 1 share) as a result of the supplementary emission of the shares. Afterwards the government will be able to make a decision to sell the rest shareholding by auction, but at a much higher price.