KAMAZ Inc. has presented the first funded loan in Moscow. It will be used for financing of the Company’s development programs. KAMAZ will expand its backing and keep establishing the positive loan history.

Funded loan is issued as the documentary interest bearing non-convertible bonds of 1,2 bln. Rubles with a three years maturity period. The bonds have 6 half-year warrants, with dividends paid every six months. The rate of the first and the second warrants is to be determined at the auction, rate of the following one is ascertained by the issuer, i.e. KAMAZ Inc. «Zenith» Bank and Foreign Trade Bank are the organizers of the funded loan, «Zenith» Bank is also acting as a payment agent. Loan auction will be held at Moscow Interbank Exchange Market.

Major part of funds — up to 80% — will be spent to replace short-term bank credits, financing KAMAZ Inc.’s projects. Time of the funded loan coincides with the period of realization of the major part of investment projects. The most important among them is the launch of production of increased payload trucks based on KAMAZ — 6520 (with an axial load up to 13 t), and improved consumers’ properties. The whole investment project costs 1,8 bln. Rubles, funded loan for its investment is 1,2 bln. Rubles. Partially its expenses are covered by KAMAZ Inc. It is planned to finish the project in 2006; by this time KAMAZ Inc. will market 6 500 units of this truck family. There will be produced about 1 200 units this vehicle in 2003. The launch of the whole model range of KamAZ 6520 will help the Company to increase its domestic Russian market share by 50% as compared with current 37%.

It is planned to carry out a number of scientific, research, test and design developments, to manufacture test batches, to arrange bench and preliminary tests of trucks, their components and assemblies, and finalize production investment project. It is planned to modernize available technological equipment and acquire new transfer lines, e.g., for production of more powerful cardan shafts of increased recourse (up to 800 000 km), for processing front and rear hubs, half-axles, brake drums, piston rings, pistons, connecting rods, foundry equipment and acquisition of measuring tools, etc.

Besides, part of funds, acquired from floatation of the funded loan, will be assigned to replenish current assets of the company. It is very important under constant production growth. Thus there have been manufactured and marketed 20 115 trucks in 2002, in 2003 it is expected that the volume will be above 24 000, in 2004 — 26 400, in 2005 — more than 28 000 units. One of promising fields of sale is leasing. This year about 1 000 vehicles will be passed for leasing according to «Directly from the manufacturer» leasing scheme.