Because of JSC "Kaija" financial difficulties and inability to continue

payments   for  1997  closed  share  emission  (capitalization  of  tax

arrears),  JSC  "Latvijas  Privatizacijas agentura" has signed buy-back

agreement  with  JSC  "Kaija".  As a result, share issue resulting from

capitalization of tax arrears (504 377

shares)  is  state property and is held by JSC "Latvijas Privatizacijas

agentura".