Updated April 30, 2008

Buyout transaction of Sibur Holding controlling interest by the company top-managers from Gazprombank becomes the largest in Russia's history MBO deal.

   As it is said in Gazprombank report, according to the talks results with the group of Sibur top-managers and United Capital Partners (UCP) representatives, on April, 29 the representatives of the credit and financial organization have signed a preliminary agreement about the sell of JSC Sibur Holding

50% plus one stock stocks interest.

The final agreement signing was predetermined by the transaction approval by Gazprombank directors' board, as well

as by fulfillment of some terms precedent by a buyer.

Cost of the sold Sibur Holding interest (50% plus one stock) totals RUR 53,5 billion.

Moreover, it was agreed the Holding would pay Gazprombank and other company shareholders the 25% dividends of the net income calculated by IFRS standards according to the last year results.

Thus, judging from the current volume of Sibur Holding net debt and obligations concerning dividends payment for 2007, the buyers can purchase the chemical company business for around $5,4 billion.

   Hidron Holdings Limited company (Cyprus) is the stocks buyer, which beneficiaries are five members of Sibur board headed by the Holding president Dmitry Konov.

The number of future company owners lists the chief executive vice-president Vladimir Razumov, vice-president for economy and finances Alexey Filippovsky, vice-president for organizational matters Vitaly Baranov and vice-president Mikhail Karisalov.

The consortium established by UCP company extends the funding and acts as the transaction manager, the remaining part gives UCP itself.

A buyer will pay RUR 16,6 billion to Gazprombank right after the fulfillment of the terms precedent, and RUR 11,9 billion more within three months from the moment of transaction being concluded. The remaining sum will be funded by the loans of the bank itself, which will be paid off within three years after the sell agreement being sold.

   Till the final calculation concerning the deal all purchased stocks remain as security at Gazprombank. Till the same date Sibur management is imposed restrictions as the potential future controlling stockholder of the company on the assets use making the key petrochemical business of the company as security to attract loans with the purpose of the company buyout funding by its management.

In future the remaining stocks buyout from another major Sibur stockholder – CJSC Lider – is not eliminated.

The latter manages Gazfond private pension scheme.

If it happens, the top-management will concentrate in its hands 100% company stocks, and Sibur Holding will turn from the petrochemical Gazprom subsidiary into the major private petrochemical company.

  Almost all these top-managers have entered the company in 2003, since it had been headed by Alexander Dyukov (currently – chairman of Sibur directors' board). Then the company managers were given

the task to solve the problem with the Holding debts. This process was completed in 2005; Sibur debts have been converted into the stocks of the new company – JSC Sibur Holding. But then Gazprom referred the petrochemistry to non-core business direction, whereupon it became clear that Sibur could have a new stockholder in the nearest future, which views concerning the company development could not correspond the strategy having been implemented within the last years.

Moreover, there also existed the potential risk of the company division, as well as its petrochemical part (hydrocarbon raw material, polymers, rubbers).