Stakhaniv Wagon Works EGM Oks Additional Share Issue

At their EGM today, Stakhaniv Wagon Works’ (SVGZ: BUY; TP USD 22.0, fully diluted USD 7.5) shareholders voted in favor of a three-fold (USD 5.23 mln) share capital increase to USD 7.85 mln. The additional shares will be sold at par value: USD 0.208. Subscription period: November 19 – December 19 2007. The ex-right date is November 19. During the first stage of subscription shareholders have the right to subscribe proportionally for new shares. We have not received information about duration of the first stage, but according to Ukrainian legislation, it can not be less than 15 days. For those who wish to subscribe, we recommend doing it by December 4. The EGM also voted to allow new investors from Progres and the Zaliv Shipyard (SZLV: N/R) (both Finance & Credit related companies) to subscribe for new shares. We expect these companies to subscribe for the shares leftover after the first stage of subscription, as was the case with the company’s previous share issues. The funds raised will be used to finance CapEx, including development of metal construction production. The market price per share adjusted for the new issue is USD 5.3 versus the current USD 15.5.