The Russian Railways Board of Directors has tentatively endorsed the sale of shares in 18 of its subsidiaries and associated companies in 2010 and 2011.

This was the first decision under the new plan for the sale of shares in company's subsidiaries from 2010 to 2012, approved in December of 2009. The sale of shares is to be implemented as part of the third stage of Russian Railways structural reform. The plan is also in line with Russian Railways plans for strategic and financial growth, and will help the company meet the following objectives:

- ensuring reliable and safe railway carriage;

- separating areas where Russian Railways can serve as a natural monopoly and where it should be competitive;

- increasing competition in different areas of the railway industry;

- increasing the financial viability of Russian Railways.

When making decisions regarding the timeline and methods for the sale of shares in these companies, Russian Railways took into account the percentage of shares offered for sale, the possibility and feasibility of pre-market optimisation measures, changes in the stock market and the overall economic climate.

The Russian Railways Board of Directors tentatively approved an IPO of up to 35% of the shares of the company TransContainer before the end of this year, depending on market conditions.

Russian Railways plans to sell shares in the following companies at public auctions:

Roszheldorproject

Petukhov Casting and Mechanical Plant

Refservice

Mettalist-Remputmash Experimental Plant

Moscow Mechanical Plant "Krasny Put"

Barnaul Car Repair Plant

Sergei Kirov Vladikavkaz Car Repair Plant

Roslavl Car Repair Plant

Saransk Car Repair Plant

Vologda Car Repair Plant

Eurasia-Intertrans

RT-DV

NIITKD

Shares in each company will be sold as a single lot at a starting price to be determined immediately before the auction based on an up-to-date report by an independent appraiser. After the auctions, Russian Railways plans to completely withdraw from its ownership of these subsidiaries.

The board has also endorsed plans to sell up to 50%, minus two shares, to private investors in the following companies:

RZhDstroy

Zheldorremmash

Novosibirsk Railway Switch Factory

Vagonremmash,

The share sale by Russian Railways is expected to attract strategic investors to these companies, with the intent of making them more efficient, reducing costs for Russian Railways and gaining access to new technology.

The board will give its final approval for the terms for selecting potential investors and the minimal placement prices.

Finally, the board approved agreements to consolidate the Remputmash Group.

In line with current legislation, the documents for the sale of shares in the said companies will be submitted to the government for approval.

All assets to be offered for sale have been evaluated by independent appraisers and approved by the Federal Agency for State Property Management.