Russia infusion Cash In Fighter Aircraft Industry To Maintain Its Growth - Report / New Cash Injection for Russian Fighter Maker

Russia infusion Cash In Fighter Aircraft Industry To Maintain Its Growth - Report / New Cash Injection for Russian Fighter Maker / JSC “UAC” Plans to Increase Its Charter Capital in 2009-2010

(NSI News Source Info) MOSCOW - January 26, 2009: Joint Stock Company “United Aircraft Corporation” (UAC) announces its plans to conduct an additional share issue in 2009-2010.

Pursuant to Decree №140 of the President of the Russian Federation of February, 20th, 2006, “On “United Aircraft Corporation, JSC” and Decree №69 of January, 19th, 2009, “On the Issues concerning Joint Stock Company “United Aircraft Corporation”, and for the purposes of completion of the consolidation process of the aircraft-building industry, UAC plans to conduct its additional shares issue in 2009-2010.

The Sukhoi Su-35 is a 4.5 generation heavy class, long-range, multi-role, air superiority fighter and strike fighter. Due to the similar features and components it contains, the Sukhoi Su-35 is considered to be a close cousin of the Sukhoi Su-30MKI, a specialized version of the Su-30. It has been further developed into the Su-35BM. The Su-35 is in service in small numbers with the Russian Air Force with 12 in service as of 2008.

The shares are to be placed under the closed subscription in favour of the Russian Federation and a number of private shareholders.

In the course of the planned UAC shares issue the state is to contribute the state-owned stakes in the aircraft industry enterprises, and further to allow the private shareholders in the UAC`s subsidiaries to swap their shares to the UAC additional shares. Besides, it is possible that certain financial institutions may participate in the shares issue and pay for UAC additional shares in cash.

The Russian Federation is to pay for UAC’s shares in cash as provided by the law on the Russian Federation Budget for 2009-2011 at the amount of not less than 6 billion rubles, as well as in the following blocks of shares: 1.17 % of JSC “Aviation Holding Company “Sukhoi”, 0.22 % of JSC “Voronezh Aircraft Manufacturing Company”, 17.31 % of JSC “Ilyushin Finance C°”, 28.69 % of JSC “Finance Leasing Company”, 100 % in PJSC “Russian Aircraft Corporation “MiG” and 100 % in JSC “Kazan Aviation Production Association named after S.P. Gorbunov”.

By the end of February, 2009, UAC’s Board of Directors should approve the principal terms of the shares issue: amount of the shares to be issued, the type of shares distribution, the list and the price of assets eligible as means of payment for UAC shares. UAC’s Board of Directors will also call for an extraordinary shareholders meeting for the end of March, 2009, to approve the Board’s decision on additional shares issue.

Subject to receiving all necessary corporate approvals, UAC will announce the principal shares issue terms by the end of February, 2009. The prospectus to be published and the commencement of the shares placement are planned for June, 2009.

The placement period is being set at its most possible duration of 1 year and the shares are to be allocated by May, 2010.