Almaty, Kazakhstan, 28th of February 2011 - Kazakhstan Kagazy JSC (hereinafter referred to as the Group or Kazakhstan Kagazy) announces the commencement of litigation with the Development Bank of Kazakhstan (hereinafter referred to as the Bank) in order to reach an agreement acceptable to both sides in relation to certain loan agreements concluded between the Bank and the Group.

During negotiations with the Bank the Group proposed to make reconsideration of the repayment terms on the basis of real operating activity and cash flows of the Group, and at all times has offered to repay all of its obligations in full.

The Group has given the Bank a commitment that it will meet its most important conditions and the Bank has repeatedly given the Group reassurance that it wishes to reach an agreement over the restructuring of its loan.

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