Portfolio changes 2005-2006
1) Sinek Capital. A special purpose vehicle formed in conjunction with the 2005 bond offering. It is a wholly owned subsidiary of Svyazinvestneftekhim (SINEK).
2) Niznekamskiy Oil Refinery (TANECO). A greenfield oil refinery project. On October 3, 2005 Sinek invested U.S. $ 64.7 thousand1 for a 9% ownership. Construction commenced in April 2006. The total cost of the project is approximately U.S. $ 10.4 bln2. The project is to be implemented in 3 stages. It is expected that the stages 1 and 2 will become operational in 2009. Stage 3 is expected to become operational in 2010. The annual capacity of the refinery will be 7 mln of crude high sulfur oil.
Change of Ownership:
1) Kazan Engine Building Company (KMPO). Sinek increased its ownership in KMPO, an existing portfolio company, from 25.9% to 44%, for U.S. $ 3.9 million1 in June 2005.
2) AK Bars Holding company. Sinek's ownership in AK Bars Holding company declined from 50.6% at December 31, 2004 to 16% at December 31, 2005. The decline was due to the increase of AK Bars Holding its capital by way of issuing new stock in exchange for additional assets transferred by the Government of the Republic of Tatarstan.
3) Tatnefteproduct. Sinek's ownership in Tatnefteproduct declined from 37.9% at December 31, 2004 to 34.2% at December 31, 2005. The decline in ownership was due to the fact that SINEK did not participate in the company's capital increase which occurred by way of consolidation of subsidiary companies.
4) Tattelecom and Kazan GTS. Sinek's ownership in Tattelecom declined from 100% at December 31, 2005 to 87.2% at December 31, 2006. The reason for the decrease resulted from Tattelecom and Kazan GTS merger in April, 2006. Sinek's shares of Kazan GTS were converted into Tattelecom's shares.
5) AK BARS Bank. Sinek's ownership in AK BARS Bank decreased from 6.7% at December 31, 2005 to 2.8% at December 31, 2006. The decline was due to AK BARS Bank issuing additional stock. By participating in additional issue via its subsidiary company Investneftekhim Sinek increased its ownership in AK BARS Bank for 10.9%. Total Sinek's ownership in AK BARS Bank amounted to 13.7% at December 31, 2006.
1 assuming RUR/U.S. $ exchange rate at 28.5
2 assuming RUR/U.S. $ exchange rate at 25.58