East-Kazakhstan oblast attracts money by means of bonds issue for realization of two investment projects

/IRBIS, July 23, 02/ - As it was informed before, By the decision of Kazakhstan stock exchange's (KASE) Board of Directors as of July 22, 2002 coupon indexed bonds of East-Kazakhstan oblast (EKO) executive body of the second and the third issues have been admitted to circulation at the stock exchange. According to the issuer's data, the money, which will be received from bonds floatation, are meant for realization of two projects, which are included in The regional investment program of development of production and infrastructure and East-Kazakhstan oblast for 2002- 2005 (RIP), which had been confirmed by XII session of regional Maslikhat from December 21, 2001 #12/11-II. This is regulated by the following legal acts: - by the decree of the Government of Kazakhstan "About local investment projects and borrowings of local executive body of East-Kazakhstan oblast for 2002" from June 15, 2002 #654; - By the decision of Akim of East-Kazakhstan oblast "About measures on realization of local investment projects and borrowings by local budget in 2002" from June 21, 2002 #192; - By the decision of XIII session of East-Kazakhstan Maslikhat of the second convocation from February 8, 2002 #13/2-II. THE FIRST PROJECT The project is concerned with coming to production capacity of "Ust- Kamenogorskcar assembly plant " BIPEK AVTO CJSC. Together with credits borrowed from Development Bank of Kazakhstan CJSC, resources will be used for purchasing and installation of the complex of spray equipment of total cost $26,043th. Total amount of capital investments on the project equal to $42,132th including: $26,043th. - purchasing of spray complex; $484th - purchasing and assembling of assembly line welding complex of real estate; $2,129th - purchasing of additional equipment; $5,167th - construction and assembly works. The main volume of capital investments has been calculated for the second and the third years of the project (2002 - 2003). Coming to the production capacity is planned for 2005. The full production capacity of the plant will allow to produce up to 30,000 VAZ cars a year. The planned volume of realization after 2005 is planned on the level of 23,000 cars a year. At the moment volume of the borrowing is equal to $37,427th, including borrowings of local executive body - $13,180th (KZT2.0bn), or 31.3% of the project's cost. The price of assembly set, delivery to the frontier, customs, delivery to warehouse and assembling has been taken onto account while calculation of production prime cost. Production cost within the whole period will amount to $233,728th. The planned net profit after coming to the scheduled volume of realization will be equal to $142,970th. With the projects financial length of10 years the internal profit rate amounts to 12.5%, and total project's cost (with discount rate of 10%) amounts to $9,870th. At present BIPEK AVTO CJSC has purchased and set assembling and welding equipment. According to BIPEK AVTO CJSC plans pilot lot consisting of 300 cars "VAZ" is to be produced in Autumn of 2002. THE SECOND PROJECT This is a program of financing of subjects of small and medium enterprise, providing financing of 51 subjects of small and medium enterprise of the oblast, whose activity is mainly in the sphere of agriculture, services, production industry and trade, in the total amount of KZT700.0m. Amount of financing of one borrower is between KZT1.0m and KZT72.5m. Giving of large sums for financing of one borrower is made mainly with the condition of co-financing by the third person. Smaller projects may be financed by 100 percent. This is a composite project and examination on certain projects, which it comprises, was not made. All projects of RIP of East-Kazakhstan oblast for 2002 passed examination of the Ministry of finance and the Ministry of economics and trade of Kazakhstan and according to the conclusion of the Ministry of economics and trade of Kazakhstan correspond to regional and branch priorities, have been provided by recourses and directed for improvement of the main macroeconomic indices. Realization of projects will provide 1,500 workplaces. The material has been prepared by IRBIS agency in accordance with KASE listing commission and was not rechecked by the agency on primary sources.