OREANDA-NEWS. July 10, 2007. The Board of Directors of Chelyabinsk Zinc Plant (LSE: CHZN, RTS: CHZN) voted to increase the charter capital of Chelyabinsk Zinc Plant by 48,775,869 rubles by a share distribution to the Company’s shareholders of 48,775,869 additional common registered shares with a par value of 1 ruble each. The charter capital of the Company as of the date of the resolution to increase the charter capital was 5,419,541 rubles consisting of 5,419,541 common shares.

Commenting on the Board's decision, Sergei Moiseyev, CZP’s Chairman of the Board, noticed: "The Board of Directors decided to issue additional shares to increase their liquidity in the Russian market and raise investment attractiveness of the Company".

Additional shares are to be distributed to each holder of the Company’s common shares in proportion to the number of the Company’s shares held by each such shareholder as of the relevant date of record. Thus, each shareholder will receive 9 additional common shares for every common share of the Company. The increase in the Company’s charter capital will be effected using the additional capital of the Company. The Company will not raise any additional funds in the course of this capital restructuring.

In connection with the new share issue, Chelyabinsk Zinc Plant and The Bank of New York plan to make corresponding amendments to the global depositary receipt program that was established under the Deposit Agreement between the Company and The Bank of New York.  As a result of this amendment, the ratio of GDRs to common registered shares of the Company will change and amount to 1:1 (currently 10 GDRs represent one common share).

In accordance with the Russian securities legislation, additional share issue by the Company is subject to the approval by Federal Service for Financial Markets of the Russian Federation (FSFM). The new shares will be distributed among the shareholders on the 5th business day after the date of the registration of this additional share issue by FSFM.