Poltava GOK To Increase Charter Fund

The company’s (PGOK: BUY) AGM on February 28, 2006 voted for an additional share issue that will increase PGOK’s charter fund by 4.9%. Ex-rights date for the issue was February 28, 2006. Subscription for the share issue is scheduled for the period April 10 – April 26, 2006. The first stage of the subscription where all current shareholders have a preferential right to subscribe proportionately to their stake will take place from April 10 to April 24, 2006. The subscription price was set equal to par at USD 1.97 per share. The issue proceeds (USD 10.7 mln) will mostly be used to increase charter fund of PGOK’s subsidiary Ferrotrans (by USD 9.9 mln). Ferrotrans consolidated a 100% stake in Skhid Ruda last year which gave it control over ore mine Nova. The mine has both iron ore deposits and sintering equipment with a capacity of 1 mln mt per year. Concorde Capital: Due to the relatively small size of the share issue, we do not think it will meaningfully affect PGOk’s price.