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Home , Interros, Novatek, RUSAL

SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly

Presented by: VTB Bank, Custody

November 22, 2018 Issue No. 2018/44

Company News

VTB Bank the first on the market joins the online tax monitoring system VTB Bank and the Federal Tax Service have agreed to launch a tax monitoring system, which will start on January 1, 2019. The decision was officially signed at a meeting of Mikhail Mishustin, Head of the Tax Service, and Andrei Kostin, President - Chairman of the VTB Bank’s Board. Tax monitoring is a replacement of traditional tax audits with online interaction based on remote access to taxpayer information systems. “The transition to tax monitoring will reduce the duration of the company's tax audits threefold. The refusal of the classical system will allow to reduce the volume of documents submitted to the tax authorities by 10 times”, - noted Mikhail Mishustin. According to Andrei Kostin, the transition to the tax monitoring regime not only corresponds with global trends to improve interaction with tax authorities, but also aims to increase the Bank’s investment attractiveness. “Working together, teams of IT and Accounting Departments launched the project and improved the service in the shortest possible time. This is an example of effective cooperation of Bank's divisions, which allowed the Bank to implement a regulatory task at the speed of a startup”, - commented Dmitry Alekseev, deputy head of IT department. VTB Bank is the only one who has already provided the Federal Tax Service with an access to the mandatory reporting forms of the Central Bank. In addition, users of the tax monitoring portal will be able to receive a motivated opinion of the Federal Tax Service of on the taxation of a particular transaction, correct errors and prevent tax risks and disputes.

Interros, lawyers to meet for discussion in November 2018 On November 19, 2018 it was reported that the lawyers representing holding of and RUSAL of would hold a technical meeting in the High Court of London until the end of November in order to clarify the future actions on the dispute over a stake. Interros has 34.15% in Norilsk Nickel, aluminum giant RUSAL owns a 27.82% stake. A long-standing shareholder conflict, which was resolved in 2012 with the intermediation of by signing an agreement with a five-year share lockup period, resumed in February 2018. The lockup period expired in December 2017, when Interros decided to buy Abramovich’s 4% in Norilsk Nickel. RUSAL filed a lawsuit to the High Court of London to suspend the deal. In March, RUSAL and Interros preliminarily agreed at court that each of them buys about 2% in the nickel company from Crispian Investments, whose stake amounted to 6.37%. Interros has already closed its deal to acquire a 2.1% stake. The High Court of London sided with RUSAL in the dispute over the stake in June. It ruled that the sale by Crispian Investments to Interros infringed a shareholder agreement on preemptive rights between Interros and RUSAL.

Novatek says resumes shares buyback after 5-month break On November 19, 2018 it was announced that Russian independent gas producer bought back 100,000 common shares, including shares in the form of global depositary receipts (GDRs), on the open market from November 12 through November 16, to resume such operations after a 5-month break. The previous buyback transaction was performed in June. In May, the board of directors extended USD 600 mln buyback program until June 7, 2019. Under the program, the company will buy its shares and GDRs via its unit Novatek Equity (Cyprus) Limited.

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Safmar Financial Investments approves RUB 6 bln buyback program On November 20, 2018 the board of directors of Russia’s Safmar Financial Investments, part of tycoon ’s financial group Safmar, approved a 3-year buyback program worth up to RUB 6 bln. The program will be financed with the holding’s free funds, while the shares will be purchased by subsidiaries with attraction of a broker.

Transneft vice president to chair NCSP’s board of directors On November 20, 2018 it was reported that Vice President of Russian oil pipeline monopoly Rashid Sharipov was again elected as the chairman of the board of directors of Novorossiysk Commercial Sea Port (NCSP) to replace Director of the Federal State Property Management Agency Dmitry Pristanskov. Pristanskov has occupied the position since April.

Dividends/coupons Evraz to pay USD 0.25 per share in 3rd interim dividends for 2018 On November 15, 2018 the board of directors of U.K.-based giant Evraz, which operates mainly in Russia, approved paying USD 0.25 per share, or a total of USD 360.8 mln, as the third interim dividends for 2018. The payment is planned for December 21. The record date is November 23. In August, Evraz decided to pay USD 0.4 per share, or USD 577.34 mln, as the second interim dividends for the year. In May, it approved paying USD 0.13 per share, or USD 187.6 mln, as the first part of the dividends.

NCSP says underpays RUB 4.8 mln in January-June 2018 dividends On November 16, 2018 it was reported that Russia’s Novorossiysk Commercial Sea Port (NCSP) underpaid RUB 4.8 mln in dividends for January-June. The company said that the bank refused to complete RUB 2.8 mln of transactions to some of the shareholders, and information about the shareholders who were to receive RUB 2 mln of dividends lacked. NCSP decided to pay RUB 10 bln in dividends for January-June.

NCSP board recommends paying RUB 5.1 bln in January-September 2018 dividends On November 20, 2018 the board of directors of Russia’s Novorossiysk Commercial Sea Port (NCSP) recommended paying RUB 0.2648 per share, or a total of RUB 5.1 bln, in dividends for January-September. The shareholders will consider the board’s recommendation at an extraordinary general meeting on December 21. The record date is set for January 9, 2019.

PhosAgro may pay RUB 9.324 bln of undisbursed profit in dividends On November 20, 2018 the board of directors of Russian fertilizer producer PhosAgro recommended paying RUB 72 per share, or a total of RUB 9.324 bln of undisbursed profit in dividends for January-September. On October 1, the company’s shareholders approved paying RUB 5.83 bln of undistributed profit, or RUB 45 per common share and RUB 15 per global depositary receipt (GDR), in dividends. In 2017, PhosAgro paid RUB 8.5 bln in interim dividends, and RUB 1.943 bln in final dividends. The company’s dividend policy envisages paying 30-50% of the International Financial Reporting Standards (IFRS) net profit. Former Senator Andrei Guryev and members of his family hold 48.48% in PhosAgro, Vladimir Litvinenko owns 19.35%, Board of Directors Member Igor Antoshin holds 6.3%, and free-float is 25.87%.

Eurobonds / DRs Demand for RusHydro’s Eurobonds totals CNY 2.5 bln On November 15, 2018 it was stated that the combined demand for Russian hydropower giant RusHydro’s debut yuan-denominated Eurobonds amounted to CNY 2.5 bln. The share of Asian investors in the final bidding book stood at over 82%. The company will place CNY 1.5 bln of Eurobonds at a coupon rate of 6.125%. , JP Morgan and VTB Capital are the organizers of the placement.

European investors buy bulk of ’s EUR 1 bln Eurobonds On November 19, 2018 Denis Shulakov, first vice president of Gazprombank, one of the organizers of the placement, said that investors from the U.K. and other European countries bought the major part of Russian gas giant Gazprom’s EUR 1 bln Eurobonds. On November 13, Gazprom placed EUR 1 bln 5-year Eurobonds at a yield of 2.95% annually. Total demand for the Eurobonds amounted to EUR 1.5 bln. The U.K. investors bought 30% of the issue, while investors from Germany and Austria accounted for 15%, investors from Switzerland purchased 8%, from the Netherlands - 7%, from France and Italy - 4%. Russian investors bought 22% of the issue.

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Lukoil buys back USD 66.6 mln GDRs from market on November 12-16, 2018 On November 20, 2018 it was reported that Securities Limited, a unit of Russian oil major Lukoil, paid USD 66.6 mln to buy 911,804 global depositary receipts (GDRs) on the open market on November 12-16 at a price of USD 73.08 apiece. In late August, Lukoil announced the start of USD 3 bln buyback program that will be valid through December 30, 2022.

RusHydro to place RUB 15 bln 3-year Eurobonds at 8.983% On November 20, 2018 a banking source said that Russian hydropower giant RusHydro would place RUB 15 bln of 3-year Eurobonds at 8.983% annually. The initial yield guidance for the Eurobonds was set at 9.125-9.250%, and was later reduced to 9-9.125%, and further reduced to 8.95-9%. The source said earlier that demand for the bond exceeded RUB 43 bln. The bonds mature in January 2022. Gazprombank, J.P.Morgan, Sberbank CIB and VTB Capital are the organizers.

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 Times“ newspapers, and others.

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