FESCO EGM Agenda explained

16 April 2012
Dear shareholders of FESCO!

As part of the process to prepare the non-container rail business of FESCO for anticipated spin-off, several intra-group transactions need to be executed in order to change the historical ownership structure of “Firm “Transgarant” LLC (“Transgarant”), and to bring it in accordance with the target structure of the upcoming spin-off transaction, under which all sale proceeds should go onto the balance sheet of FAR-EASTERN SHIPPING COMPANY PLC (FESCO), and all sale transactions will be executed in Russian jurisdiction.

FESCO is calling an EGM on April 16 2012, asking shareholders to approve two interrelated transactions.

Under the first transaction FAR-EASTERN SHIPPING COMPANY PLC (FESCO) is to acquire 15% in Transgarant from its 100% owned foreign subsidiary Neteller Holdings Limited, thus concentrating 91.2% of shares in Transgarant on the balance sheet of FESCO.

The second transaction will transfer the remaining 8.8% in “Transgarant” into the Russian jurisdiction. For this, FESCO will contribute 100% of shares in its another foreign subsidiary — Eustacia Finance Limited, which historically owned shares in Transgarant – to the Charter capital of its fully owned Russian subsidiary FESCO Avto. The said FESCO Avto is supposed to be later sold as part of the sale of Transgarant.

If these transactions are executed, all future settlements during the sale of Transgarant will be made in Russian jurisdiction, and all 100% of proceeds will go directly to the balance sheet of FESCO. In addition, we simplify the Group structure by divesting two subsidiaries – FESCO Avto and Eustacia Finance Limited.

Proposed intra-group transactions will not result in any assets or cash leaving the Group's perimeter. The said transactions are made at market prices defined by an independent appraiser.

Should you have any additional questions, please do not hesitate to contact FESCO IR Team at ir@fesco.com.