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Baltika Breweries announced an Extraordinary General Shareholders’ Meeting, which will take place on 01 September 2011.

The meeting will be conducted by absentee ballot. The agenda of the General Shareholders’ Meeting includes approval of the conversion of preference shares to ordinary shares.

The company’s issued share capital consists of 151,714,594 ordinary shares and 12,326,570 A-type preference shares. The nominal value of each ordinary and preference share is RUB 1. The company’s issued share capital totals RUB 164,041,164.

Shares will be converted at the ratio of 1:1, namely: one A-type preference share will be exchanged for one ordinary share. The impact of the conversion for shareholders will be the following:

A-type preference shareholders will receive ordinary shares and will consequently keep their ownership in Baltika Breweries unchanged.
A-type preference shareholders will receive ordinary shares and will consequently have the right to vote at the company’s shareholders’ meetings on all issues.
There will be no changes for shareholders of ordinary shares.
By merging the two share classes, Baltika optimizes a structure of the share capital that is complicated and requires definite administrative costs. The current structure is unclear to shareholders, both in terms of voting rights, and rights to dividends.

Historically preference shares have been used by companies during privatization to guarantee a certain small dividend for shareholders. As Baltika is in a strong financial position and is an adequately capitalized company, the Board of Directors believes that the preference share class is an unnecessary structure.

The merger of the two share classes into one is anticipated to have a positive impact on the trading liquidity of Baltika shares.

In recent years, the Board of Directors has recommended paying identical dividends to preference and ordinary shares. The Board will consider the implementation of a differentiated dividend for ordinary versus preference shares in accordance with the company charter if the conversion is not successfully approved by the EGM. The minimum amount of dividends on preference shares is set in the company’s charter, and cannot be below the annual Sberbank interest rate on deposits +10%, calculated for the nominal value of a share (RUB 1).

On 14 July 2011 market share price per one ordinary share amounted 1297.80 rubles and per one preference share — 1203.30 rubles*. Over the last few years, Baltika has traded registered and unregistered shares (both ordinary and preference). In Russia, the company’s shares are sold on two trading platforms: the RTS Exchange (since 2001) and the MICEX Stock Exchange (since 2003). Currently, the company’s shares are listed in the ‘Listed Securities Not Included in Quotation Lists’ section of the catalogue.

* MICEX data

19 Jul. 2011

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