AMTEL Completes Acquisition of Vredestein Banden

MOSCOW, April 25 -- AMTEL HOLDINGS HOLLAND N.V., through a wholly owned subsidiary, today completed the acquisition of the entire issued share capital of the Dutch-based international tire manufacturer Vredestein Banden B.V. from Vredestein Investment Consortium (VICO) N.V. for EUR 195.6 million in cash. AMTEL Holdings Holland N.V. is the parent company of the AMTEL Group, one of Russia's leading manufacturers of passenger car and commercial tires.

As a result of this acquisition, AMTEL expands its global operations in Europe, Asia, the former Soviet Union and North America. Total production capacity of the AMTEL Group, including Vredestein Banden B.V., amounts to around 22 million tires a year.

Sudhir Gupta, Chairman of AMTEL's Supervisory Board, said, "We believe that this acquisition will contribute significantly to the successful development of AMTEL as a pan-European company. The combined entity benefits from the Vredestein brand that has an international reputation for quality as well as access to manufacturing skills and expertise driving our ability to compete effectively at all levels of the market, both in Russia and abroad."

"This acquisition provides us access to technology and manufacturing expertise, European and North American distribution networks, a unique and market-focused product mix and additional management and human resource capabilities," added Alexei Gurin, AMTEL's CEO.

Vredestein Banden, an independent Dutch tire manufacturer with a history of nearly 60 years, had total sales in 2004 of more than EUR 230 million in four product groups: passenger car and delivery van tires, bicycle tires, agricultural tires and industrial tires. The company has sales offices operating throughout Europe and it is also represented in the United States and Canada. About 30% of its production is sold in Germany.

"Vredestein Banden will continue to focus on manufacturing high- and ultra-high performance tires, as well as R&D and industrial design programs," commented Robert Oudshoorn, Vredestein Banden's CEO. "The combination of AMTEL and Vredestein Banden should provide employees with exciting opportunities to work in a wide area of different disciplines. We look forward to working closely to achieve a successful integration of both companies."

The Works Council of Vredestein Banden has given positive advice in respect of the transaction.

ING Corporate Finance acted as AMTEL's investment banking adviser and Squire, Sanders & Dempsey served as the company's legal counsel on the transaction.

AMTEL is one of Russia's largest tire manufacturers, with a significant share of the Russian tire production market and of car and light-truck tires, the most profitable market segment. The group includes three tire factories in Russia: the Amtel-Povolzhye Tire Complex (Kirov), the Amtel-Chernozemye Tire Complex (Voronezh) and the Amtel-Sibir Tire Complex (Krasnoyarsk). It also includes two chemical facilities in Russia Amtel-Kuzbass (Kemerovo), Amtel-Karbon (Volgograd Carbon Black Plant) and Rosava, the largest Ukrainian tire manufacturing company.

The overall tire output of AMTEL plants was 14.4 million in 2004, which represents a 21% increase vs. 2003.

Shareholders of AMTEL include Templeton Strategic Emerging Markets Fund LDC, an international investment fund managed by Templeton Asset Management Ltd. In October 2004, about 9.7% of AMTEL's shares were sold in a private placement to selected institutional investors in Europe, the United States and Russia.

VREDESTEIN BANDEN, an independent Dutch tire manufacturer with a history of nearly 60 years, had total sales in 2004 of more than EUR 230 million in four product groups: passenger car and delivery van tires, bicycle tires, agricultural tires and industrial tires. The company has sales offices operating throughout Europe and is also represented in the United States and Canada.

The company has made significant investments in recent years and, as a result, its production equipment is state-of-the-art, allowing Vredestein Banden to produce a wide range of high-performance tires on one site. Vredestein is involved in the development, production, marketing and sales of tires. More than 17,000 passenger car tires and high-tech radial agricultural tires are produced per day at Vredestein Banden's plant.