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AIG AND THREE U.S. PARTNERS FORM JOINT VENTURE INVESTMENT BANK IN RUSSIA WITH GROUP OF RUSSIAN INVESTORS

 AIG AND THREE U.S. PARTNERS FORM JOINT VENTURE INVESTMENT
 BANK IN RUSSIA WITH GROUP OF RUSSIAN INVESTORS
 NEW YORK, Oct. 28 /PRNewswire/ -- American International Group, Inc. (AIG), together with Chemical Banking Corporation, Smith Barney, Harris Upham & Co., Inc., and J. Rothschild, Wolfensohn & Co. have agreed, in cooperation with various Russian investors, to establish a new investment bank in the Russian
Federation. The new entity will be a


50-50 cooperative effort of American and Russian shareholders.
 Named the Russian-American Investment Bank, it was authorized in a Presidential Decree signed in Moscow by Russian Federation President Boris Yeltsin on Oct. 26, 1992. President Yeltsin signed the Decree following a meeting in Moscow with senior executives of the Western partners, including M.R. Greenberg, chairman and chief executive officer of AIG; Frank G. Zarb, chairman and chief executive officer of Smith Barney, Harris Upham & Co; William B. Harrison, Jr., vice chairman of Chemical Banking Corporation; and Lord Rothschild, Vice Chairman of J. Rothschild, Wolfensohn & Co.
 In signing the Decree, President Yeltsin said, "This investment bank will be the bridge over which Russian businessmen will join with American and other international investors in important development projects in our country. It is a significant step and we have high expectations for the future of the Russian-American Investment Bank."
 The Russian shareholders will be the Public Fund for Social Guarantees to Servicemen (Fund Guarantiya), the Foreign Trade Bank of Russia, the Pension Fund of Russia, Unikom Bank, the Innovation Fund of Moscow, Gasprom, and the strategic regions of Komi, Tyumen, Kaliningrad and Yakutia.
 The Investment Bank's mission will be to assist Russian enterprises, including projects and joint ventures of the Investment Bank's shareholders, in restructuring Russian industry. It will initially concentrate on financial advisory and corporate and project finance work, with particular emphasis on the natural resource sector and assisting in conversion of the military-industrial infrastructure to civilian purposes. Through the Investment Bank's network of shareholders and other relationships, it will also expedite the location of appropriate Russian partners for foreign investors seeking to invest in Russia, and thus, as President Yeltsin said, it will function as a bridge to facilitate investment by both Western and Russian investors.
 The Investment Bank will be a closely-held joint stock company organized and domiciled in the Russian Federation, with equity investment divided on a 50-50 basis between Russian and Western participants. It will maintain a dual capital structure, with initial authorized capital of U.S.$ 10 million and 50 million rubles.
 Speaking on behalf of the Western participants, AIG Chairman Greenberg said, "The Russian-American Investment Bank provides us with a unique business opportunity as the Russian Federation moves forward with its transition to a market economy. There is a tremendous need for this type of investment bank to support Russian industry, as well as to assist foreign investors in identifying and negotiating attractive projects in Russia. The experience and international contacts of the Western shareholders, together with the strengths of our Russian partners, should produce a very important institution for the future of Russia."
 Legal agreements establishing the Investment Bank have been executed by the founding shareholders. Registration and licensing of the Bank is anticipated in the near future, and it is expected that the Investment Bank will commence operations by year-end 1992.
 -0- 10/28/92
 /CONTACT: Questions concerning this announcement and the Russian- American Development Bank should be directed as follows: AIG: John Wooster, (212) 770-3146; Smith Barney: Bob Connor, (212) 698-3123; Chemical Bank: John Meyers, (212) 270-7454; Rothschild, Wolfensohn: Stuart Ray, (212) 909-8105; and in Moscow: The Fund for Social Guarantees to Servicemen, Evgeny Ermachkov/
 (AIG) CO: American International Group, Inc. ST: New York IN: FIN SU: JVN


KD -- NY115 -- 6206 10/28/92 16:16 EST
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Date:Oct 28, 1992
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