SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly

Presented by: VTB Bank, Custody

June 4, 2020 Issue No. 2020/21

Please be advised that June 12 th is a public holiday (“ Day”) and an official day off in the Russian Federation. Please note that June 11 th is a short working day.

Market News

Moscow Exchange not to perform trade on June 24, July 1 days off On June 3, 2020 it was announced that the Exchange would not hold trading sessions on June 24 and July 1, which were declared days off by President Vladimir Putin due to celebration of the 75th anniversary of the Great Patriotic War victory and nationwide voting on amendments to the Constitution.

Company News

RusHydro starts accepting bids for RUB 7 bln of new shares On May 29, 2020 Russian hydropower giant RusHydro announced the start of accepting bids for the remaining RUB 7 bln of its RUB 14 bln new shares program. The other RUB 7 bln shares were bought by the shareholders who used their preemptive right. The company is offering the shares publicly to finance the first stage of construction of high voltage lines in the Chukotka Autonomous District.

Kopy Goldfields buys Amur Zoloto in exchange for 88% shares On May 29, 2020 it was reported that Swedish gold producer Kopy Goldfields agreed on a reverse acquisition of Russian precious metals miner Amur Zoloto as a result of a deal worth USD 119.6 mln with Amur Zoloto’s shareholders receiving 88% of the merged company. The deal is to be closed in August, but it is subject to approval by regulatory authorities and Kopy Goldfields’s shareholders at an annual general meeting slated for June 30. One of the conditions of the deal is further listing on the Nasdaq First North.

Rosneft buys back 463,009 shares for USD 2.4 mln on May 25–29, 2020 On June 1, 2020 it was stated that Russian oil major bought back 463,009 shares and global depositary receipts (GDRs) for USD 2.4 mln in the week from May 25 through May 29. The weighted average price stood at USD 5.24 apiece. Since the launch of the USD 2 bln buyback program on March 23, the company bought back 35.403 mln securities for USD 149 mln.

Yandex to hold 2020 AGM later than usual over COVID-19 On June 1, 2020 it was reported that Russian Internet company postponed a 2020 annual general meeting (AGM) of its shareholders due to the coronavirus pandemic. According to temporary law COVID-19 Justice and Safety of the Netherlands, where the company’s parent firm is registered, the meeting can be delayed till October 31 to make personal presence of shareholders and other participants safe. If the COVID- 19 restrictions are not lifted soon, Yandex could hold a meeting in absentia. In 2019, Yandex held the AGM on June 27.

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VEON holders change 5 members on board of directors On June 1, 2020 shareholders of Amsterdam-based VEON, the sole owner of Russian mobile operator VimpelCom, elected new board of directors and replaced five members. The five new members are Hans Holger Albrecht, Mariano De Beer, Peter Derby, Amos Genish, and Stephen Pusey, as well as seven previously serving directors: Osama Bedier, , Gennady Gazin, Andrei Gusev, Gunnar Holt, Robert Jan van de Kraats, and Alexander Pertsovsky. Following the election of the directors, Gazin was appointed as chairman of the board of directors, effective on June 1.

Delo offers to buy out TransContainer minorities at RUB 8,680 per share On June 1, 2020 it was stated that Russian of businessman Sergei Shishkaryov, the owner of 99.6% of Russia’s leading railway container operator TransContainer, made a mandatory buyout offer to the operator’s minority shareholders at RUB 8,679.52 apiece. Delo Group closed RUB 60.3 bln purchase of 50% plus two shares in TransContainer from in mid-December 2019. After that, the group made a mandatory buyback offer to the minorities of the company, and the minorities, including Yenisei Capital of tycoons and and Russia’s second largest bank VTB, submitted a 49.641% stake for the buyback, for which Delo paid RUB 59.9 bln.

MTS says updates list of candidates for board of directors On June 3, 2020 it was announced that major Russian mobile operator MTS updated the list of candidates nominated for election to the board of directors. The list contains nine candidates, including MTS CEO Alexei Kornya, TV channel Channel One CEO Konstantin Ernst, and Felix Yevtushenkov, member of the board of directors of multi-industry holding , MTS’ core shareholder. The new list did not contain the earlier mentioned fund Almaz Capital Partners’ co-founder Alexander Galitsky. An annual general meeting of the company’s shareholders is scheduled for June 24.

Court denies revision of Orient Express Bank stake sale to Avetisyan On June 3, 2020 the Sixth Arbitration Court of Appeal confirmed rejection of a suit of Evison Holdings Limited, controlled by investment fund Baring Vostok, demanding revision of a sale of 9.99% stake in Orient Express Bank to Finvision of businessman Artyom Avetisyan. In May 2019, the Arbitration Court of the Amur Region ordered Evison Holdings Limited to fulfill a 2016 call option and to sell the 9.99% stake in Orient Express Bank to Avetisyan’s Finvision Holdings. In June of the year, Baring Vostok gave the stake to Finvision but appealed against the court decision. The Sixth Arbitration Court of Appeal, the Arbitration Court of the Far East District, and the Supreme Court upheld the decision of the lower court. But Evison discovered that the call option’s condition say that it can be fulfilled only if a debt of the First Collection Bureau to the bank is settled, while the bank has been challenging the debt settlement since February 2019, so it filed a new suit against the call option. Nevertheless, the Arbitration Court of the Amur Region turned down the suit, and the Sixth Arbitration Court of Appeal upheld the decision.

Polymetal issues RUB 14.2 mln shares under option program On June 3, 2020 it was reported that Russian gold producer issued new shares for about RUB 14.2 mln under a performance share plan (PSP). The issue contained 10,854 common shares with no face value. The securities are designed to be purchased by people, none of whom are directors or executives of the company. The market cost is estimated at GBP 164,300, or RUB 14.2 mln under the rate of the . Applications for listing were sent to the and the United Kingdom Listing Authority. The shares are expected to be admitted to trade on Friday. After the placement, the shareholder equity of Polymetal will amount to 471.802 mln shares with no face value, each carrying one vote.

Supreme Court upholds decisions on RUB 50 bln Rost Bank case On June 4, 2020 Russia’s Supreme Court has upheld decisions of two lower courts that acknowledged as illegal the increase of capital of Rost Bank’s affiliate Rost Capital by RUB 50 bln by the former shareholder. Judge Natalya Chuchunova turned down a cassation claim by Mikail Shishkhanov, former owner of B&N Bank, which was the bailout agent of Rost Bank, and former executives of Rost Bank Alexander Lukin and Kirill Lyubentsov on May 12, but the court is yet to publish its statement on the matter. The transfer was done in September 2017, when former owner of B&N Bank Mikail Shishkhanov was bailing out Rost Bank. Rost Bank got the sum in interbank loans from B&N Bank, and injected all the money into Rost Capital. National Bank Trust, with which Rost Bank was merged in 2019, filed a suit against the deal, but the Moscow Arbitration Court turned it down. Nevertheless, the Ninth Arbitration Court of Appeal later said that this deal was done with the same malice as all consecutive deals under which Rost Capital bought assets affiliated with B&N Bank owners Shishkhanov and Mikhail Gutseriyev at overcharged prices. The court acknowledged RUB 50 bln deal illegal, and the Arbitration Court of the Moscow District upheld the decision.

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Dividends/coupons Neft says to continue paying interim dividends in 2020 On May 28, 2020 Alexei Yankevich, Deputy CEO for Economy and Finance at Russian oil company , stated that the company would continue paying interim dividends in 2020. In April, the company’s board of directors recommended paying RUB 37.96 per share in dividends for 2019. Previously, the company paid RUB 18.14 per share, or a total of around RUB 86 bln, in dividends for January–June 2019, paying interim dividends for the first time since 2015. Gas giant Gazprom owns 95.68% in Gazprom Neft.

Kamaz says board of directors recommends no dividends for 2019 On May 28, 2020 the board of directors of Russia’s largest truck producer Kamaz recommended paying no dividends for 2019. The company paid no dividends for 2018 and RUB 749.66 mln, or 24.85% of the net profit, in dividends for 2017. According to the website of Kamaz, state-run industrial corporation Rostec holds 47.1% in the company, Avtoinvest LLC has 23.54%, Daimler AG has 15%, and the remaining 14.36% is held by minority shareholders.

GV Gold says board recommends RUB 1.5 bln in dividends for 2019 On May 28, 2020 the board of directors of Russian gold producer GV Gold recommended paying RUB 27.2789448 per share, or a total of about RUB 1.5 bln in final dividends for 2019. The shareholders will consider the issue at an annual general meeting slated for June 30. The shareholder register for the meeting will be closed on June 8, the record date is July 16. GV Gold paid RUB 14.9 per share, or a total of RUB 820.7 mln, in dividends for January–June. The combined amount of dividends for 2018 was about RUB 3 bln with final dividends standing at RUB 159.4 mln. Board members Sergei Dokuchayev, Valerian Tikhonov, and Natalya Opaleva each hold 20.36% in the company. The companies affiliated with BlackRock own 17.99%.

Otkritie FC Bank says may pay no dividends for 2019 On May 28, 2020 the supervisory board of Russia’s Otkritie Financial Corporation (FC) Bank recommended paying zero dividends for 2019. Previously, the bank paid RUB 2 bln in dividends for 2018. The central bank owns 99.99% in the Otkritie FC Bank.

Slavneft says board recommends no dividends for 2019 On May 28, 2020 the board of directors of Russian oil company Slavneft, a joint venture of Rosneft and Gazprom Neft, recommended paying no dividends for 2019. The board recommended spending the net profit for 2019 to redeem debt. The net profit of the company grew by 27% on the year to RUB 4.722 bln in 2019, as calculated under Russian Accounting Standards (RAS).

VimpelCom board cuts 2019 dividends recommendation by RUB 10 bln On May 29, 2020 the board of directors of Russian mobile operator VimpelCom, working under brand Beeline, reduced its recommendation on 2019 dividends on ordinary shares to RUB 390 apiece from RUB 585. The recommendation for preferred shares at RUB 0.001 apiece was maintained. In total, VimpelCom could pay RUB 19.999 in dividends, down by RUB 10 bln form the earlier planned amount. An annual general meeting of shareholders will take place on June 30. The record date is July 10.

NLMK shareholders approve October–December 2019 dividends of RUB 3.12 per share On May 29, 2020 shareholders of Russian steelmaker (NLMK) approved paying RUB 3.21 per share in dividends for October–December 2019. The record date for the dividends is June 9. Initially, the company’s board of directors recommended paying RUB 5.16 per share, or a total of RUB 30.925 bln, in dividends for the period, but the shareholders suggested reduction of dividends at an annual general meeting in April. The board recued the recommendation to RUB 3.12 per share, saying that the decision was made based upon changes in the market situation. In 2019, the company paid RUB 3.22 per share, or a total of RUB 19.298 bln, in dividends for July–September, RUB 3.68 per share, or a total of around RUB 22.06 bln, in dividends for April–June, and RUB 7.34 per share, or a total of RUB 43.99 bln, in dividends for January–March. Vladimir Lisin holds around 81.4% in NLMK through Fletcher Group.

Federal Passenger Company says board recommends paying no 2019 dividends On May 29, 2020 the board of directors of Russian Railways' affiliate Federal Passenger Company recommended paying no dividends for 2019, when it received a net profit of RUB 6.629 bln. Federal Passenger Company paid no dividends for 2018.

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Mechel may pay RUB 3.48 per preferred share in dividends for 2019 On June 1, 2020 the board of directors of Russian metals and mining group recommended paying RUB 3.48 per preferred share, or a total of RUB 482.87 mln, and zero rubles per ordinary share in final dividends for 2019. The remaining net profit standing at RUB 1.508 bln should be left undistributed. The record date for the dividends is July 17. The shareholders will discuss the recommendation at an annual general meeting on June 30. Mechel paid RUB 18.21 per preferred share, or a total of RUB 2.527 bln, in and no dividends per ordinary share for 2018. The company’s shareholder equity is split into 416,270,745 ordinary shares and 138,756,915 preferred shares. About 60% of preferred shares are in free float, while the company controls the remaining 40%. The main beneficiary owner of the company is Igor Zyuzin, chairman of the board of directors with 50.54% of ordinary shares.

Acron’s owners approve paying RUB 275 per share in final 2019 dividends On June 1, 2020 shareholders of Russian fertilizer producer Acron approved paying RUB 275 per share in final dividends for 2019. The record date is June 9. Acron already paid RUB 101 per share in dividends for January–September 2019. Total dividends for 2019 will thus amount to RUB 376 per share. Vyacheslav Kantor is the key shareholder of the company.

Power Machines board recommends no dividends for 2019 On June 1, 2020 the board of directors of Russian power engineering company Power Machines recommended paying no final dividends for 2019 as it received a net loss of RUB 21.752 bln in the period. The company paid no dividends for 2018 as well. Tycoon Alexei Mordashov, core owner of steelmaker , is also the major shareholder of Power Machines.

MOESK owners approve paying RUB 1.2 bln in final dividends for 2019 On June 1, 2020 shareholders of Moscow United Electric Grid Company (MOESK), a unit of power grid holding Rosseti, approved paying RUB 0.025 per share, or a total of RUB 1.24 bln, in final dividends for 2019. MOESK already paid RUB 2.064 bln in dividends for January–September 2019. Thus total dividends for 2019 will amount to RUB 3.304 bln.

Rosseti owners approve paying RUB 18 bln in 2019 final dividends On June 1, 2020 shareholders of state-controlled power grid holding Rosseti approved paying 8.852 kopecks per common share, or RUB 17.6 bln, and 18.93 kopecks per preferred share, or RUB 392.8 mln, in final dividends for 2019. Rosseti already paid RUB 5 bln in dividends for January–March 2019, thus total dividends for 2019 will amount to RUB 23 bln. The company did not pay dividends for 2018.

TMK holders approve paying no dividends for 2019 On June 1, 2020 shareholders of Russian oil and gas pipe maker TMK approved paying no dividends for 2019. The company paid RUB 2.55 per common share in dividends for January–March 2019 and did not pay dividends for 2018. Dmitry Pumpyansky, chairman of the board of directors, is the main beneficiary owner of the company.

Sovcombank says board recommends paying no dividends for 2019 On June 2, 2020 the board of directors of Russia’s Sovcombank recommended paying no dividends for 2019. The board of directors recommended keeping the net profit after tax at RUB 38 bln undistributed.

MMK owners approve RUB 16.84 bln in dividends for October–December 2019 On June 2, 2020 shareholders of Russia’s Magnitogorsk Iron and Steel Works (MMK) approved paying RUB 1.507 per share, or about RUB 16.84 bln, in dividends for October–December 2019. In 2019, the company paid RUB 1.488 per share, or RUB 16.627 bln, or 100% of free cash flow, in dividends for January–March; RUB 0.69 per share, or RUB 7.71 bln, or 200% of free cash flow, in dividends for April–June; and RUB 1.65 per share, or RUB 18.438 bln, or 100% of free cash flow, in dividends for July–September. For 2018, MMK paid RUB 5.902 per share in dividends, or a total of RUB 65.951 bln, including RUB 1.398 per share, or about RUB 5.62 bln, in dividends for October–December. Viktor Rashnikov, chairman of the board of directors, holds 84.26% in MMK, while free float accounts for 15.7%.

Rosneft shareholders approve RUB 18.07 per share in final dividends for 2019 On June 3, 2020 shareholders of Russian oil major Rosneft approved paying RUB 18.07 per share, or a total of RUB 191.5 bln, in final dividends for 2019. Overall dividends for 2019 will amount to 33.41 rubles per share. The record date is scheduled for June 15.

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ChelPipe says to pay RUB 2.5 bln in final dividends for 2019 On June 4, 2020 shareholders of Russia’s Chelyabinsk Pipe Plant (ChelPipe) approved payment of RUB 8.18 per share, or a total of RUB 2.501 bln in final dividends for 2019. The record date for the dividends is June 15. In February 2020, the board of directors approved a new dividend policy that foresees the company paying dividends at least twice a year. The company also set the minimum dividend payments in 2020 and in 2021 at no less than RUB 7.5 bln per year. The core shareholders of the company are Chairman of the Board of Directors Andrei Komarov with a 77.26% stake and Pavel Fyodorov with 10.67%.

Eurobonds / DRs to buy back Eurobonds maturing in 2021, 2023 On June 2, 2020 it was reported that Credit Bank of Moscow plans to buy back dollar-denominated Eurobonds of two issues maturing in 2021 and 2023. The buyout price for the Eurobonds maturing in 2021 was set at USD 1,032.5 per security and for the Eurobonds maturing in 2023 at USD 1,030 per security. At present, the bank has USD 366.182 mln worth of the 2021 Eurobonds and USD 363.37 mln worth of the 2023 Eurobonds in circulation. The bank placed the issues worth USD 500 mln each in 2016 and 2018.

Alfa-Bank cuts Eurobond guidance to 2.875% On June 4, 2020 a banking source stated that Russia’s Alfa-Bank has cut the coupon guidance for EUR 300 mln of 3-year Eurobonds to 2.875% annually from 3% annually. Demand for the Eurobonds exceeds EUR 700 mln. ABH Financial Limited, the holding company Alfa-Bank, held a roadshow of Eurobonds with maturity of 3–5 years earlier this week. Alfa-Bank, J.P. Morgan, and UBS Investment Bank act as the organizers of the placement. In late April, ABH Financial Limited redeemed EUR 400 mln issue of Eurobonds that it placed in 2017.

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.

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