| Magnitogorsk Iron and Steel Works (MMK) announces cancellation of treasury shares representing 4.27% of its authorized capital. The cancellation took place as the result of reorganization of MMK Group of companies by means of merging of a subsidiary of MMK Group - ZAO MMK-Kapital - into the parent company.
The merger was approved at MMK Extraordinary General Shareholders' Meeting which took place on August 30, 2007. The decision was taken in order to optimize the MMK Group's structure.
Pursuant to the terms of the ZAO MMK-Kapital Merger Agreement, 498,495,023 registered ordinary shares of OJSC MMK (corresponding to 4.27% of the parent company's authorized capital ) formerly owned by the subsidiary, were cancelled.
Following the cancellation the number of MMK's placed ordinary shares changed to 11,174,330,000, which lead to a proportionate increase of the weight of shares owned by current shareholders of MMK.
The move allowed to avoid cross holding of shares.
Upon approval of the Report on the Results of the Shares' Cancellation by the MMK Board of Directors on 14.12.2007, necessary changes will be made in the Charter of MMK.
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