OREANDA-NEWS. December 14, 2007. The eighth regular meeting of the Board of Directors of OAO AvtoVAZ took place on December 7, 2007 in Togliatti with Sergey Chemezov as chairman, the Troika Dialog press service reported.

The agenda included 11 issues concerning the reorganization of AvtoVAZ and the confirmation of dates for an extraordinary general meeting for shareholders of the company in the form of absentee voting, due to take place on 28 January 2008, as well as the implementation of changes in the company’s Charter.

The following participants were present at the meeting: Sergey Chemezov, general director of Rostekhnologia and chairman of the board of AvtoVAZ, Mikhail Broitman, executive director of Troika Dialog Group, Ilya Gubin, vice president of AvtoVAZ, Sergey Fomin, executive director for economics and finance of AvtoVAZ, Nikolay Kuznetsov, board secretary and director for corporative management and development of AvtoVAZ, Oleg Orlov, head of the legal department of AvtoVAZ, amongst others.

Much attention was paid to the discussion of the up and coming events within the liquidation of the cross-ownership structure of the company between AvtoVAZ and subsidiaries.

The program has been drawn up by the joint efforts of consultants for AvtoVAZ, including Troika Dialog, Akin Gump legal firm and others, and is being carried out by a consortium of investors set up by Troika Capital Partners and Rosoboronexport with the objective of creating a transparent ownership structure and increasing the company’s investment attractiveness.

It was stated that the first stage of the corporate procedures for the liquidation of the cross-ownership structure was complete. The finalization of implementing these procedures over the first half of 2008 will allow for concentration on Rosboronexport’s and Troika Capital Partners’ 75%+1 share ownership. It is expected that the remaining 25% will be divided amongst other minor shareholders of AvtoVAZ.

Consolidation of the shares is being carried out in correspondence with the Federal Law on joint stock companies. As a result, legal and financial-economic procedures may be initiated for the acquisition of AvtoVAZ by a western strategic investor from a number of large foreign car companies and Russian metallurgy companies. According to Chemezov, Rosoboronexport, which is currently being re-organised into a open joint-stock company, still intends to sell 50% of its ordinary shares in AvtoVAZ in cooperation with Troika Capital Partners, 25% of these are meant for a foreign car manufacturer. At the same time, Rosboronexport is retaining its blocking stake (25%+1), which is enough for efficient running of the organization.

In addition to this, legal proceedings in connection with the company’s subsidiaries joining AvtoVAZ were discussed at the meeting – such as AVVA, the Central Department of the Financial Automobile Corporation, Audit Service, IFK, which together own 66.5% of voting shares. These securities will be redeemed as treasury stocks as soon as the subsidiaries join AvtoVAZ.

The form and text of the voting papers have been confirmed, as has the list of information and materials required by the shareholders for the preparation stage of the EGM.

The board of directors considered AvtoVAZ’s budget for 2008 and decided to place ten series of bonds on the stock market – from БО-01 to БО-10.

Sergey Chemezov remarked that the market reacted positively to actions of the management at AvtoVAZ. The company’s position has significantly strengthened over the reported period. AvtoVAZ’s ordinary and preferred shares are currently stably growing, and their trade volume at the MICEX has considerably grown.

The management of state company Rostekhnologii is confident that consistent activities of Rosoboronexport, AvtoVAZ and Troika Dialog will allow for the successful conclusion to the reorganisation of the Volga-based car manufacturing giant from a closed-circle enterprise to a world class car corporation.