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Sibneft Postpones Eurobond Issue

Moscow, 29 November 2001; Sibneft has postponed a planned Eurobond issue, pending an improvement in market conditions. "Sibneft intends to return to international capital markets once market conditions improve," Sibneft president Eugene Shvidler said.

"We received an enthusiastic response from investors in the pre-marketing phase," he added. "But the external environment remains unfavorable, and as a result we have chosen to defer the issue. We have a duty to our shareholders to secure competitive rates for the finance which we raise."

Moody's Investors Service assigned a B1 rating to the planned Eurobond issue, piercing the sovereign ceiling. The Russian Federation is rated B2 by Moody's.

Sibneft was the first Russian company to issue a Eurobond. The $150 million three-year bond was launched in August 1997 through Salomon Smith Barney and redeemed in August 2000. In March 1998, Sibneft issued a $200 million six month zero-coupon promissory note which was arranged by Salomon Smith Barney. This note was successfully redeemed in September 1998.