Bogdan EGM approves merger by additional share issue

At their EGM today, Bogdan Automobile Plant (LUAZ: BUY) shareholders voted to increase the company’s charter fund by 33% by issuing an additional 1,100 mln shares. Of the new capital, 90% is planned to be contributed in the form of assets of four related automobile companies (see our automotive industry report of April 11, 2008). The subscription price will be in the range of UAH 0.25 per share (USD 0.05, nominal price) to UAH 1.50 (USD 0.3, our 12M target price), with the exact price to be announced before October 12 by the company’s supervisory board. Subscription will be held in two stages between October 27 and November 24, 2008. Today (August 29) is the effective ex-rights date, according to Vladimir Gunchik, the head of Bogdan’s supervisory board.