Joint Press Release, 25.01.2007

Today, on January 25, in the course of Russian President Vladimir Putin’s formal visit to the Republic of India Vnesheconombank, Group GAZ and URAL INDIA Ltd signed an agreement on cooperation.

The agreement was signed by Vnesheconombank Chairman Vladimir Dmitriev, Group GAZ Director Victor Korman and URAL INDIA Ltd Board Director J.K. Saraff.

The Agreement aims to establish strategic partnership and expand long-term effective and mutually beneficial cooperation in order to prepare schemes of projects carried out on India’s territory.

The agreement provides for cooperation in establishing a Russian –Indian joint venture for assembling Ural trucks in the state of West Bengal. At this stage a license agreement on assembling Ural 555717 trucks (6 x 6 wheels formula) has been reached.

A contract totaling 4 million US dollars for the assembly of 150 trucks is being carried out now.

The agreement also provides for making joint efforts to prepare schemes of attracting funds to finance investment projects of Group GAZ and URAL INDIA Ltd. Specifically, Vnesheconombank will offer the parties to the agreement consulting services on economic and financial aspects of investment projects and will participate in conducting expert’s examination of projects and evaluate lending and financial institutions’ proposals with regard to financing and attracting investment.

Under the agreement URAL INDIA Ltd will be rendering all-round assistance to the parties in implementing and supporting joint projects on India’s territory.

The agreement would promote the development of Russian-Indian mechanical engineering industry and cooperation between the two countries.

Vnesheconombank (VEB) – a specialized state-owned financial institution founded in 1924. In its business VEB gives top priority to supporting domestic industrial exports, carrying out major projects including infrastructural ones in the Russian key industries, attracting investment to Russian regions and acting as an agent for the Government of the Russian Federation. The world’s leading rating agency, Fitch Ratings Ltd, assigned issuer’s default rating (IDR) of BBB+ to Vnesheconombank, stable outlook.

Group GAZ was established in 2005 in the course of restructuring OJSC RuPromAvto’s production assets. Group GAZ incorporates OJSC GAZ and its subsidiaries such as GAZ Automobile Factory Ltd, Pavlovsk Bus Factory Ltd, OJSC Golitsin Bus Factory, Kanashsky Automobile Accessories Factory Ltd, OJSC Saransk Dump Trucks Plant, OJSC Yaroslavsky Diesel Equipment Plant, OJSC Avtodiesel, Likinsk Bus Plant Ltd, KavZ Ltd, OJSC Yaroslavl Heating Equipment Plant, OJSC Ural Automobile Factory, OJSC TvEks, OJSC Bryansk Arsenal, CJSC Chelyabinsk Road-Building Machines, OJSC Zavolzhsk Caterpillar Tractor Plant, Service, distribution and logistics subsidiaries. In 2005, the total sales of Group GAZ amounted to 100 billion rubles.       

URAL INDIA Ltd was established in 2003 for assembling and distributing Ural trucks. The cooperation resulted in building an automobile factory ready for production.