UkrChem to hold meeting for 7 7/8% noteholders to vote on waivers

By Jennifer Chiou

New York, March 14 - UkrChem Capital BV said it will convene a meeting for holders of its $125 million of 7 7/8% loan participation notes due 2008 to vote on a proposed extraordinary resolution to amend the trust deed of the notes.

The notes were issued by UkrChem on a limited recourse basis to fund a loan by VTB Bank Europe plc (formerly Moscow Narodny Bank Ltd.) to JSC Concern Stirol.

Proposed changes include approval of a waiver of any potential event of default or event of default under the loan agreement due to the failure by Stirol to inform the lender and the trustee of any breaches of the agreement that may involve:

• Stirol failing to comply with its obligations under the loan agreement of Oct. 21, 2004 between Stirol and Black Sea Trade and Development Bank;

• The terms of a transaction described in the audited financial statements of Stirol for its financial year ended Dec. 31, 2005 being less favorable to Stirol than those that could be obtained in a comparable arms' length transaction for fair market value;

• The failure by Stirol to obtain a written opinion from an independent appraiser with respect to any affiliate transactions involving aggregate payments or value in excess of $10 million to the effect that such transactions have the nature of an arms' length commercial transaction;

• The failure by Stirol to deliver to the lender and the trustee within 180 days of the end of its financial year ended Dec. 31, 2005 its audited consolidated financial statements for that financial year;

• The failure by Stirol to deliver to the lender and the trustee within 90 days after the end of the second quarter of its financial year ended Dec. 31 a copy of its unaudited consolidated financial statements for the first six months of that financial year; and

• Less than 80% of Stirol's sales of ammonia, urea and ammonium nitrate, in 2005, 2006 and that part of 2007 up to and including the date on which the waiver takes effect, being at or above the applicable market price for the relevant product at the time of sale.

The quorum required to pass an extraordinary resolution is at least two people holding notes or being proxies or representatives and holding or representing a majority of the notes.

The company is seeking approvals from at least 75% of noteholders.

The meeting will take place at the office of Baker & McKenzie LLP in London at 5 a.m. ET on March 29.

Holders of notes which are held by Euroclear or Clearstream, Luxembourg should contact the custody operations department in Brussels (+322 224 4378, ext. 61025) for Euroclear and the corporate action department in Luxembourg (+352 44 992 8065, ext. 2791) for Clearstream.

The Bank of New York is the paying and transfer agent.

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