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Kazakhstan Kagazy (KAG)

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Monday 14 April, 2008

Kazakhstan Kagazy


Kazakhstan Kagazy


Kazakhstan Kagazy PLC (the 'Company' or 'Kagazy') (LSE: KAG), one of
Kazakhstan's leading industrial groups, today announced the acquisition of a 90%
stake in Astana Contract JSC, the largest logistics and warehouse operator in
Central Asia, for a total consideration of US$ 57.6 million.

The transaction is being effected by the purchase of a 55% stake from principal
shareholders and the acquisition of new shares which represent 35% of the
enlarged share capital of Astana Contract. The payment to shareholders is being
made in two tranches with US$ 3.6 million paid upfront and US$ 32 million being
paid on a deferred basis after two years. New shares are being acquired for US$
22 million. The remaining 10% stake will be bought by Kagazy for US$ 6.4 million
after two years, subject to receiving the approval of the State Development Bank
of Kazakhstan.

Kazakhstan Kagazy is making the upfront payment in the amount of US$ 25.6
million from its IPO proceeds. The deferred payments are expected to be financed
from the cash flows of the company. Kagazy will assume US$ 39 million of the
existing debt of Astana Contract.

Astana Contract owns a full service container terminal which is located 1.8
kilometres from Almaty-1 railway station and near Almaty International Airport,
with a processing capacity of 60,000 containers per annum and two class A
storage facilities with 50,000 sq.m of total space. The construction of the
second facility was completed in April 2008. The terminal is used by some of the
largest shipping lines in the world, including Maersk Sealand, CARU, MSC and
Hapag-Lloyd, and operates at 100% of its capacity. The first storage facility is
100% occupied while the second is fully preleased to a portfolio of
international clients. In addition, Astana Contract owns approximately 60
hectares of land in Astana and Aktubinsk, conveniently located near roads and
necessary infrastructure for construction of logistics facilities.

Kazakhstan Kagazy already operates the PEAK Logistics Centre which comprises 14
Class B warehouses with a total floor area of 35,000 sq.m. and is located 20
kilometres from the centre of Almaty, close to the planned new outer ring road
and the TRACECA trade corridor. The Company also owns approximately 545 hectares
of prime land, strategically located in a newly created industrial zone near

Maksat Arip, Chief Executive Officer of Kazakhstan Kagazy PLC, commented:
'Following this acquisition Kazakhstan Kagazy will become the market leader in
warehouse and logistics infrastructure and the only Class A warehouse operator
in Central Asia. Astana Contract owns fully operational cash generating class A
warehouses and a container terminal which we intend to integrate with our
existing industrial real estate division PEAK.'

Conference call information

Kazakhstan Kagazy management will host a conference call today at 9 am (New York
time) / 2 pm (London time) / 5 pm (Moscow Time)/ 7 pm (Almaty Time) to discuss
the acquisition of Astana Contract.

The dial-in numbers for the conference call are:

UK/International:   + 44 (0)20 8609 0205
US:                 + 1 703 621 9126
PIN number:         911248#

A replay will then be available for 7 days after the conference call.
 To access the replay, please dial:

UK/International:   + 44 (0)20 8609 0289
US:                 + 1 866 676 5865
PIN number:         213205#

For further information and to view the pictures of the terminal, please visit or contact:

Kazakhstan Kagazy      Kazakhstan Kagazy     Shared Value Limited
Yuriy Bogday           Alessandro Manghi     Larisa Kogut-Millings
Business Development   Investor Relations    Investor Relations
Tel: +7 7272 448 790   Tel: +7 7272 448 787  Tel. +44 (0) 20 7321 5037

Kazakhstan Kagazy PLC runs Central Asia's largest producer of paper, corrugated
board and packaging products. It also operates one of the leading industrial
real estate development companies in the country through Prime Estate Activities
Kazakhstan LLP (Peak), which owns approximately 545 hectares of prime land,
strategically located in a newly created industrial zone near Almaty, for
construction of commercial warehousing and logistics infrastructure facilities.
The Group reported total assets of approximately US$ 647.5 million as at
September 30, 2007 and consolidated revenues of approximately US$ 58.9 million
for the first nine months ended September 30, 2007, according to unaudited IFRS
financial results. Kazakhstan Kagazy's securities are listed under the symbol
'KAG' on the London Stock Exchange.

This interim statement contains certain forward-looking statements with respect
to the financial condition, results, operations and businesses of Kazakhstan
Kagazy plc. These statements and forecasts involve risk and uncertainty because
they relate to events and depend upon circumstances that will occur in the
future. There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied by these
forward-looking statements and forecasts. Nothing in this interim statement
should be construed as a profit forecast.