Auto Service World
News   October 3, 2008   by Auto Service World

Magna’s Russian M Unicar Partner Drops Out


Magna International Inc. has announced that the lender to a wholly-owned subsidiary of OJSC Russian Machines has realized against the 20 million Magna Class A Subordinate Voting Shares pledged as security for the financing obtained by Russian Machines for its September 20, 2007 investment in Magna. Accordingly, Russian Machines’ participation in the arrangements entered into with the Stronach Trust in connection with this investment has terminated.
As a result of the termination of these arrangements, among other things, up to 20 million Magna Class A Subordinate Voting Shares will be disposed of at the direction of Russian Machines’ lender. Russian Machines will also cease to be an indirect shareholder of M Unicar Inc., the holding company formed to hold the Magna shares of the Stronach Trust, Russian Machines and certain members of Magna’s management;
M Unicar Inc. will continue to be indirectly controlled by the Stronach Trust, and following the sale of the 20 million Magna Class A Subordinate Voting Shares, will continue to own all of the outstanding 726,829 Magna Class B Shares, as well as 605,000 Magna Class A Subordinate Voting Shares, representing approximately 66% of all votes attributable to both classes of shares.
Russian Machines will cease to be an indirect shareholder in the European company through which Frank Stronach provides consulting services in relation to Magna’s business outside Canada and Austria.
“Our strategic alliance with Russian Machines has assisted us in accelerating our growth in the Russian market,” said Siegfried Wolf, Magna’s co-chief executive officer. “We have a good working relationship with Oleg Deripaska and the Basic Element group, including Russian Machines and its controlled subsidiary, GAZ Group, Russia’s second largest automotive company.
“We believe that the Russian market still holds significant opportunities for us and intend to continue to pursue joint opportunities with Russian Machines and GAZ, as well as other opportunities to advance our position in Russia.”


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