SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly

Presented by: VTB Bank, Custody

July 27, 2018 Issue No. 2018/27

Company News

Lukoil says to start buying back shares from market soon On July 19, 2018 Russian oil major said in a statement quoting CEO that the company plans to launch a buyback of its shares from the open market very soon through subsidiary Lukoil Securities Limited. Alekperov said that buying back of the shares from the open market is the most important component of the company’s new policy of returning capital to its shareholders. Lukoil is currently finalizing technical parameters of Lukoil Securities Limited buyback of shares and depositary receipts and is choosing brokers. The company will develop the program until September 2018. Previously, Lukoil First Vice President Alexander Matytsyn said that the buyback program may amount to USD 3 bln for the next five year.

Russian Agricultural Bank’s board approves RUB 5 bln additional share issue On July 19, 2018 it was stated that the supervisory board of Russian Agricultural Bank had approved a decision to raise the bank’s shareholder equity by RUB 5 bln to RUB 389.85 bln through a share issue. The bank will place the shares privately. The Russian government owns 100% in the bank.

Enel acquires direct control over shares in Enel On July 19, 2018 it was disclosed that Italy’s Enel S.p.A. had transferred 56.43% shares in subsidiary power producer Enel Russia into its direct control from Enel Investment Holding. Enel S.p.A. acquired direct control over 19,960,478,471 shares in Enel Russia on July 11. The combined installed power production capacity of Enel Russia power plants stands at 9.4 gigawatts and its heating power capacity is 2,400 gigacalories per hour. Besides Enel S.p.A., shareholders of Enel Russia include PFR Partners Fund I Limited with a 19.03% stake, Prosperity Capital Management Limited with an 8.23% stake, VTB Bank with 3.87%, and other minorities with 12.44%.

Government nominates former transport minister to Aeroflot board On July 19, 2018 it was released on the Russian government website that the government had nominated former Transport Minister Maxim Sokolov to the board of directors of national flagship carrier Aeroflot. Other candidates are members of the current board and include Mikhail Voyevodin, CEO of VSMPO-Avisma, Dmitry Peskov, non-executive director of Aeroflot, Mikhail Poluboyarinov, a member of Vnesheconombank (VEB) management, Aeroflot Deputy CEO Vitaly Savelyev, United Aircraft Corporation (UAC) CEO Yury Slyusar, Rostec CEO Sergei Chemezov, and Renaissance Broker Managing Director Igor Kamensky.

Watchdog sees Qatar Airways documents for Vnukovo purchase On July 24, 2018 director of Russia’s Federal Antimonopoly Service Igor Artemyev told reporters that the service expects to receive a package of documents from Qatar Airways to buy a 25% stake in ’s Vnukovo airport in the near future. The service said earlier that the deal will also require approval of the Russian government commission for foreign investment control.

1

Sibur prepares for USD 2-3 bln IPO On July 24, 2018 it was reported that Russian petrochemical company Sibur is preparing for an initial public offering (IPO) potentially worth between USD 2 to USD 3 bln and which may happen by the end of the year. One of the three financial market sources familiar with the Sibur plans said that the company is looking at the possibility of an IPO in Moscow and London. Another of the three sources said that the company was looking to raise “a couple of billion dollars” from the deal. Asked about a potential IPO, Sibur said in a written reply to Reuters that it is considering different “strategic options” how to finance its growth. Two of the three sources said that JP Morgan and Russia’s Gazprombank are among possible arrangers of the deal. Businessman Leonid Mikhelson, the head of and a major shareholder in Russia’s largest gas producer , owns 48.5% of Sibur. His business partner owns 17%, while China’s Sinopec and Silk Fund control 10% each. There was no final decision whether only existing shares would be involved or Sibur would issue new shares for the IPO as well, the sources said. Sibur is currently constructing a petrochemical complex in western known as ZapSibNefteKhim, which will be one of the world’s five biggest petrochemical plants, part of a play by Russia to capture more of the value from the oil it produces. Sibur's another project, a gas chemical complex in Russia’s Far East, will require preliminary investment of up to USD 8 bln. Sibur is looking for Asian partners to share the risks for the latter.

Dividends/coupons PIK Group board recommends paying RUB 15 bln in dividends On July 20, 2018 it was stated that the board of directors of developer PIK Group had recommended paying RUB 15 bln, or RUB 22.71 per common share, in dividends. The shareholders will consider the recommendation at an extraordinary general meeting scheduled for August 24. The shareholder register for the dividends is planned to be closed on September 4. President Sergei Gordeyev owns 74.6% in the company.

Novatek may mull higher dividend payments in 2019 On July 26, 2018 Deputy CEO of Russian independent gas producer Novatek Mark Gyetvay said during a conference call that Novatek may consider raising dividend payments in 2019, but can do so without revising its dividend policy. Gyetvay mentioned that the most important for the company now is to launch all four production lines of the Yamal LNG plant in 2019. They also have to make a final investment decision on the Arctic LNG-2, which should also take place in 2019. And possibly by the end of 2019 the company will be best positioned for making a decision on raising our dividend payments. Under our current dividend policy Novatek should pay at least 30% of net profit under International Financial Reporting Standards (IFRS) in dividends. The deputy CEO stressed that it means no less than 30%, therefore the question is not whether the company should change its dividend policy, but that it should make a decision taking all factors into account. CEO Leonid Mikhelson said in April that Novatek may raise dividends after the launch of all stages of the Yamal LNG facility.

Please be advised that the information presented in this newsletter is based on the following sources: National Settlement Depository (NSD); Clearstream Banking; Euroclear Bank; PRIME-TASS information agency; “Kommersant”, "Rossiyskaya Gazeta”, “Izvestiya, "Vedomosti”, “The Moscow Times“ newspapers, and others.

For more information kindly contact: Anna Enfiandzhiants Evgenia Makarova Julia Dombrovskaya T +7 (495) 783 13 91 T +7 (495) 783 13 64 T +7 (495) 783 13 15 F +7 (495) 783 13 89 F +7 (495) 783 13 89 F +7 (495) 783 13 20 E [email protected] E [email protected] E [email protected] This document has been prepared exclusively for internal use of VTB Bank (PJSC) customers. The information should not be further distributed or duplicated in whole or in part by any means without the prior written consent of VTB Bank (PJSC). The information contained herein has been prepared on the basis of information which is either publicly available or obtained from a source which VTB Bank (PJSC) believes to be reliable at the time of publication. Information provided herein may be a summary or translation. The content of the material contained herein is subject to change without notice, and such changes could affect its validity. VTB Bank (PJSC) is not obligated to update the material in light of future events. Furthermore, VTB Bank (PJSC) does not warrant, expressly or implicitly, its veracity, accuracy or completeness. VTB Bank (PJSC) and its affiliates accept no liability whatsoever for any use of this communication or any action taken based on or arising from the material contained herein. Additional information may be available upon request. The material in this communication is for information purposes only. Therefore, this communication should not be interpreted as investment, tax or legal advice by VTB Bank (PJSC) or any of its officers, directors, employees or agents and customers should consult with appropriate professional advisers for these specific matters. Nothing expressed or implied herein is intended to create any obligation of VTB Bank (PJSC) and/or impose any liability on VTB Bank (PJSC) and/or create legal relations between VTB Bank (PJSC) and VTB Bank (PJSC) customers.

2