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04.03.2011

FOUR ENTERPRISES OF SAMARA ENGINE-BUILDING COMPLEX MERGE

The Kuznetsov OAO shareholders (previously, Motorostroitel OAO) decided during the extraordinary shareholders’ meeting on February 28, 2011 to reorganize the Company by acquiring N.D. Kuznetsov Scientific and Technical Complex of Samara OAO (N.D. Kuznetsov SNTK OAO), Samara Machine-Building Design Bureau (SKBM OAO) and Research and Production Association Povolzhsky Aviation Technological Institute OAO (NPO Povolzhsky AviTI OAO).

The decision on reorganization was made by the shareholders with a total of 89.4% of voting shares with of 99.8% of the attendees voting in favor of the reorganization.

In addition, the extraordinary shareholders’ meeting approved the merger agreement and decided to increase the Company’s authorized capital by making an additional issue of ordinary shares through converting stock of the merging companies.

Also in the period from February 28 to March 1, 2011 extraordinary shareholders’ general meetings were held at N.D. Kuznetsov SNTK OAO, SKBM OAO and NPO Povolzhsky AviTI OAO with the Company’s shareholders deciding to reorganize and join Kuznetsov OAO.

Pursuant to the agreement for merging N.D. Kuznetsov SNTK OAO, SKBM OAO and NPO Povolzhsky AviTI OAO with Kuznetsov OAO, the stock shall be converted as follows:

  • two ordinary shares of N.D. Kuznetsov SNTK OAO, three shares of SKBM OAO and seven ordinary shares of NPO Povolzhsky AviTI OAO will be converted into one ordinary Kuznetsov OAO share;
  • two preferred N.D. Kuznetsov SNTK OAO shares and seven preferred NPO Povolzhsky AviTI OAO shares will be converted into one preferred Kuznetsov OAO share.

Should any shareholder of the merged companies hold a fractional number of shares and therefore not be eligible for any number of additional Kuznetsov OAO shares in accordance with the existing conversion rules, such shareholder shall receive one additional Kuznetsov OAO ordinary share.

Conversion may increase Kuznetsov OAO authorized capital by 155,000 shares of common stock.

Buyout share prices as applied to minority shareholders, who might claim such a buyout, will be determined as follows:

  • ordinary Kuznetsov OAO shares at 11,351 rubles apiece;
  • N.D. Kuznetsov SNTK OAO shares at 5,020 rubles apiece;
  • NPO Povolzhsky AviTI OAO shares at 1,647 rubles apiece.
  • SKBN OAO shares at 3,553 rubles apiece.

Buyout prices have been calculated by Euroexpert ZAO, an independent appraiser. All corporate procedures regarding reorganization of the enterprises are slated for completion in June 2011. Therefore, the United Engine-Building Corporation enters the final phase of consolidation of its Samara engine-building assets designed to boost the complex’s performance, improve management, and cut costs.

Kuznetsov OAO is among the largest aviation and space engine builders. The engines built by the enterprise are used in manned spacecraft “Vostok”, “Voskhod”, “Soyuz” and space freighter "Progress". The Company is a major manufacturer of engines for Russia’s strategic aviation, gas pumping stations, and thermal power plants, and is a member of the United Engine-Building Corporation.

United Engine-Building Corporation UK OAO is a fully owned branch of OPK Oboronprom OAO engaged in managing the engine-building assets.

OPK Oboronprom OAO is a multi-industry machine-building group founded in 2002, member of the state-run Rossiyskiye Tekhnologii Company. Its main areas of business include helicopter-building (Vertolety Rossii OAO), engine-building (United Engine-Building Corporation UK) and more.

Additional information:
Public Relations Dept, Kuznetsov OAO
Phone: 8 (846)995-06-81


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