Charter Capital

Baltika Breweries was created in 1990 as a state-owned company. In 1992, the privatization of the brewery started, and as a result, it was reorganized into a joint-stock company. That was the "first type" privatization, the employees could buy stock with privileges. Ordinary and preference A-type stocks were issued. The shares were sold to the Company's employees and at the auction, to external investors. At the auction, and later at an investment auction, hundreds of people exchanged their privatization vouchers for the Company's shares. At the investment auction, a large stock was acquired by a foreign company, Baltic Beverages Holding AB. As a result of these events, over 2,000 companies and individuals became Baltika Breweries shareholders. Initially, the par value of one share was 50 pre-denomination rubles. Later it was increased to 80 rubles. In March 2001, the annual shareholders' meeting made a decision to split each 80-ruble share into 80 shares of the same type with 1 ruble par value. After splitting number of the Company placed shares came to 120 572 800 shares, including 107 087 200 ordianry and 13 485 600 preference shares.

In 2002, the Company's organizational structure was changed by joining two new subsidiaries - the Tula Beer and Baltika-Don breweries to Baltika Breweries. In order to convert the shares of these subsidiaries, the Company's charter capital was increased be means of an additional stock issue, registered by Russia's Federal Securities Commission in June 2002. In the course of the merger shares of Baltika-Don and Tula Beer breweries were converted into Baltika Breweries additionally issued 10 073 490 ordinary and 59 550 preference Baltika Breweries shares (each 1 ruble par value).

In 2006 VENA JSC, Pikra Plc. and Yarpivo Plc were merged with Baltika Breweries.

The merger was done in the form of accession of VENA JSC, Pikra Plc. and Yarpivo Plc to Baltika Breweries in two stages.

At the first stage shareholders of VENA JSC, Pikra Plc and Yarpivo Plc were offered to exchange there shares for additionally issued Baltika Breweries shares or sell them to Baltika Breweries in the frame of contractual purchase. As a result of exchange 42 019 232 ordinary shares (each 1 ruble par value), additionally issued by Baltika Breweries in summer 2006, were placed.

At the second stage of the merger, after approval of the accession by VENA JSC, Pikra Plc and Yarpivo Plc shareholders and obtaining permissions from regulating authorities, VENA JSC, Pikra Plc and Yarpivo Plc shares were converted into additionally issued 2 372 477 ordinary Baltika Breweries shares (each 1 ruble par value) at the end of 2006 year. Taking into consideration the cancellation of shares made in 2002 and 2006 as a result of redemption, Baltika Breweries charter capital amounted to 175 083 29 rubles.

On October 15, 2007, at the Extraordinary General Shareholders Meeting held in the form of absentee voting, the decision was approved to reduce the charter capital of Baltika Breweries by buying back a part of the shares in order to decrease their total number. The purchase of ordinary and type ‘A’ preference shares from all those shareholders wishing to participate was done in accordance with RF legislation and on the terms and conditions approved by the Board of Directors.

The reduction in the amount of the Company’s charter capital by buying back the shares is directed at:

• growing the profits per share and, as a result, enhancing the attractiveness of investing in Baltika;
• improving the Company’s structure of capital;
• giving shareholders the right to sell their shares at the market value without paying expenses to intermediaries, paying for brokerage and stock exchange services, commission fees and other expenses relating to the sale of securities.

In the course of implementing this project, the Company bought back 9,828,550 ordinary shares and 1,213,545 type ‘A’ preference shares. In accordance with existing legislation, the shares purchased by the Company were cancelled and the charter capital was reduced by the amount of the nominal value of the purchased (cancelled) shares.

The Company's charter capital is RUR 164 041 164. The Company issued 151 714 594 ordinary shares and 12 326 570  A-type preference shares. Par value of each ordinary and preference share is RUR 1.