Issuers News

On August 29 Eric Eberhadson, Chairman of the Board of GAZ group announced on Moscow Motor Show Interauto - 2007 that the group plans to renew 90% of the model range by 2011. According to him, the process will concern the whole assortment: motorcars, commercial vehicles and trucks as well as busses, special equipment and engines. $5 billion will be invested by 2011. GAZ represented its new motorcar GAZ Siber on Chrysler platform as well as LDV Maxus van on Interauto. It is planned to produce these models on GAZ plant: Siber production launch is planned for 2008, Maxus - for 2009. Investments into Siber project will make $150 million. Earlier the group representatives announced that over $400 million would be invested into renewal of light commercial vehicles by 2011, $250 would be invested into renewal of heavy capacity trucks, $1 billion would be invested in setting up production of new diesel engines.

GAZ capitalization is $2.7 billion. According to Mr.Eberkhadson, so far GAZ group has enough own capital for realization of investment projects, however it is not excluded that in future they will attract investments. "In 2008 we will be ready for different variants of attracting money including IPO, however no decision on it has been made yet", Mr.Eberkhadson stressed. Mikhail Ganelin, an analyst from Troika Dialogue believes that is GAZ group invests $1 billion a year, they will have to attract more than one half of this amount. Besides the expert believes that such large investments can cause prime cost growth and higher prices for products in short term prospect. According to Mr.Ganelin, it would be more profitable to extend the program till at lat 2015 for GAZ.