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Presented by: VTB Bank, Custody

June 28, 2018 Issue No. 2018/23

Company News

Safmar says no plans to further cut stake in M.Video On June 22, 2018 Said Gutseriyev, chairman of M.Video’s board of directors and a member of Safmar’s board of directors, stated that Russian financial group Safmar did not plan to further reduce its stake in electronics retailer M.Video. Media-Saturn-Holding (MediaMarktSaturn), controlled by German retailer Ceconomy, said on June 20 it agreed to acquire a 15% stake in M.Video from Safmar of businessman Mikhail Gutseriyev and transfer its Russian business, Media Markt stores, to Safmar. The value of the deal is estimated at EUR 258 mln. As a result of the deal, Safmar’s stake in M.Video fell to 42.7%. Safmar does not plan a further expansion in the retail sector and is not considering any additional acquisitions. The group does not expect any problems with the Federal Antimonopoly Service over M.Video’s acquisition of the Media Markt chain, as believes that the purchase will not significantly raise its market share. He also said that M.Video could resume paying dividends after 2019. In late May, M.Video’s board of directors recommended paying no dividends for 2017. The planned increase of value-added tax (VAT) to 20% from 18% will not significantly impact prices for household appliances and electronics.

MGTS holders elect new board of directors, now only MTS executives On June 22, 2018 shareholders of City Telephone Company (MGTS), a fixed line unit of mobile operator MTS, elected at an annual general meeting a new board of directors, which now comprises only MTS representatives. The board was joined by MTS President Alexei Kornya, as well as by Sergei Plotnikov, head of MTS’ business market department, and Andrei Kamensky, MTS’ vice president for finance. MTS owns 94.7% of MGTS’ capital.

RusHydro’s directors approve RUB 14 bln additional share issue On June 25, 2018 the board of directors of RusHydro approved RUB 14.014 bln public share issue to finance construction of power transmission lines on the Chukotka Peninsula. In early May, President Vladimir Putin approved raising the shareholder equity of RusHydro by up to RUB 13 bln from the federal budget on condition that the government will keep its stake of 60.56%. ’s second largest bank VTB owns 13.3% in RusHydro, and the other shareholders own 26.1%.

GV Gold board approves boosting capital by 80% On June 26, 2018 the board of directors of Russian gold producer GV Gold approved publicly offering 45.016 mln additional common shares. At present, the company’s charter capital comprises 54,983,890 common shares with a face value of RUB 0.002 each. The company’s shareholders approved the additional share issue in early June. At present, board members Sergei Dokuchayev, Valerian Tikhonov, and Natalya Opaleva each hold 20.36% in the company.

En+ Group says four members quit board of directors On June 27, 2018 it was reported that four members of the board of directors of Russia’s sanctions-hit En+ Group left the board in line with a plan to remove the company from sanctions. Specifically, Gulzhan Moldazhanova, Igor Makarov, Olga Mashkovskaya, and Anton Vishnevsky left the group’s board of directors. The board of directors also approved appointing Timur Valiyev, Alexander Krovushkin, Mikhail Likhotnikov, Konstantin Molodkin, Alexander Shistko, Yury Dvoryansky, and Denis Kholodilov as members of the board. Maxim Sokov, president and CEO of En+ Group, resigned from his post and left the company’s board of directors from June 1.

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London court sides with in dispute over Norilsk shares On June 27, 2018 it was announced that the High Court of London ruled that Crispian Investments, a unit of businessman ’s Millhouse, should not have proposed and sold a stake in Russian metals giant to of tycoon . The sale infringed a shareholder agreement on preemptive rights between Interros and aluminum giant UC RUSAL. The price of USD 234 per share at which Crispian offered the shares to RUSAL was unfair and was formed as a result of an agreement between Crispian and Whiteleave controlled by Interros. A long-standing shareholder conflict, which was resolved in 2012 with the intermediation of Abramovich by signing an agreement with a five-year share lockup period, resumed in mid-February. 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.

Moscow Exchange delists Dixy from June 28, 2018 On June 28, 2018 the delisted retailer Dixy. Dixy Holding Ltd, a subsidiary of Mercury Group of businessman Igor Kesayev, owns 51.29% shares in the company, while Dixy Yug, a subsidiary of Dixy Group, owns 23.56% in the company according to the latest data. In December 2017, 80.48% of the shareholders approved a decision to delist the shares from the Moscow Exchange, and a buyback for owners that do not agree with the decision at RUB 340 per share.

TransContainer’s directors appoint Vyacheslav Sarayev as new CEO On June 28, 2018 the board of directors of Russian leading railway container operator TransContainer approved an early termination of powers of CEO Pyotr Baskakov and appointed Vyacheslav Sarayev as the new CEO. Baskakov signed a letter of resignation on June 1. Sarayev is affiliated with companies of U.K.- based mining giant Evraz, which operates mainly in Russia.

Dividends/coupons Freight One’s owners decide against dividends for 2017 On June 21, 2018 shareholders of Russian railway operator Freight One, part of UCL Holding of tycoon Vladimir Lisin, decided not to pay dividends for 2017 and leave the net profit for the year undisbursed. The company also paid no dividends for 2016 and for 2015. The net profit of Freight One fell 18.8% on the year to RUB 10.2 bln in 2017 as calculated under Russian Accounting Standards (RAS), but soared to RUB 19.8 bln in 2017 from RUB 920 mln in 2016 as calculated under International Financial Reporting Standards (IFRS).

Tatneft to pay RUB 39.94 per share in dividends for 2017 On June 22, 2018 shareholders of Russian oil company approved paying RUB 39.94 per common or preferred share in dividends for 2017. The company has already paid RUB 27.78 per share in dividends for January-September 2017, and the final dividends will amount to RUB 12.16 per share. In 2016, the company’s board of directors approved raising dividend payments to 50% of the International Financial Reporting Standards (IFRS) net profit from 30% of the Russian Accounting Standards (RAS) net profit paid earlier. Tatneft paid RUB 22.81 per common or preferred share in dividends for the year. Earlier in 2018, the board approved adjustments in the dividend policy to pay at least 50% of the net profit under RAS or IFRS depending on which is larger. In 2017, the company’s RAS net profit fell 4.6% on the year to RUB 100.022 bln and the IFRS net profit attributable to shareholders rose 14.7% to RUB 123.139 bln.

RussNeft to pay USD 40 mln for preferred shares in 2017 dividends On June 22, 2018 shareholders of Russian oil company approved paying USD 40 mln, or USD 0.408 per preferred share, in dividends for 2017. The company won’t pay dividends on common shares. The record date for the dividends is set at July 12. RussNeft said in March that it can pay RUB 2.304 bln in dividends on preferred shares for 2017, or about 21% of the net profit under Russian Accounting Standards (RAS). Belyrian Holdings of the Gutseriyev family and its affiliates own 47% of the company’s common shares, or 60% of the charter capital, and Swiss trader Glencore and its subsidiaries own 33% of common shares, or 25% of the charter capital.

MGTS holders approve 2017 dividends at RUB 231 per common and preferred share On June 22, 2018 shareholders of Moscow City Telephone Company (MGTS), a fixed line unit of mobile operator MTS, decided to pay RUB 231 per common and preferred share in 2017 dividends. In total, the company will spend RUB 21.996 bln in dividends, including RUB 18.413 bln on common and RUB 3.584 bln

2 on preferred shares. The shareholders’ register for the payments will be closed on July 12. MGTS paid by RUB 233 per share upon results of 2016, or RUB 22 billion in total.

Owners of Pharmacy Chain 36.6 decide against dividends for 2017 On June 25, 2018 shareholders of Russia’s Pharmacy Chain 36.6 approved a decision to pay no dividends for 2017. The company also paid no dividends for 2016. In August 2017, Pharmacy Chain 36.6’s shareholders included Cyprus-based Palesora Limited with 45.02%, Alliance Boots Holdings Limited with 15%, Douflero Holding Limited with 13.76%, and businessman Roman Avdeyev’s Rossium with 10.54%. In May 2018, the company said that Palesora Limited sold its entire 40% stake in Pharmacy Chain 36.6 in November 2017, while another Cypriot company, Paneario, acquired a 28% stake.

Aeroflot holders approve paying RUB 14.22 bln in 2017 dividends On June 25, 2018 shareholders of Russian national flagship air carrier approved paying RUB 12.8 per share, or a total of RUB 14.22 bln, in dividends for 2017. The sum accounts for 50% of the company’s net profit for the period, as calculated under Russian Accounting Standards (RAS). For 2016, Aeroflot paid RUB 17.48 bln, or a total of RUB 19.4 bln, of 50% of net profit under International Financial Reporting Standards (IFRS) for the period, in dividends. The government holds 51.2% in Aeroflot, state industrial corporation Rostec has 3.5%, institutional investors hold 34.8%, individuals own 5.6%, and the management of Aeroflot has a 0.1% stake.

TMK holders approve paying RUB 2.4 bln in 2017 dividends On June 25, 2018 shareholders of Russian oil and gas pipe producer TMK approved paying RUB 2.28 per common share, or a total of RUB 2.356 bln, in dividends for 2017. The company paid RUB 1.96 per common share, or a total of around RUB 2.025 bln, in final dividends for 2016. Dmitry Pumpyansky, chairman of the board of directors, holds 66.75% in TMK.

Quadra holders approve paying no dividends for 2017 On June 25, 2018 shareholders of Russia’s Quadra Power Generation approved paying no dividends for 2017. The company earlier posted a net profit of RUB 602 mln in 2017 against a net loss of RUB 1.5 bln in 2016, as calculated under Russian Accounting Standards (RAS). Under International Financial Reporting Standards (IFRS), the company’s net loss narrowed 90.5% to RUB 210 mln. Controlled by ’s Onexim Group, Quadra has not paid dividends since 2012.

Mostotrest holders approve paying RUB 3 bln in 2017 dividends On June 25, 2018 shareholders of Russian construction company Mostotrest approved paying RUB 3.003 bln, or RUB 10.64 per common share, in total dividends for 2017. Of this amount, Mostotrest earlier paid RUB 2.385 bln, or RUB 8.45 per share, dividends for January-September 2017. For 2016, the company paid RUB 10.64 per share in dividends. TFK-Finance owns 94.2% in Mostotrest, and free float accounts for 5.8%.

Ilyushin holders approve paying RUB 67 mln in 2017 dividends On June 25, 2018 shareholders of Russia’s Ilyushin Aviation Complex, part of United Aircraft Corporation (UAC), approved paying around RUB 67 mln in dividends for 2017. The company’s net profit grew to RUB 667.5 mln in 2017 from RUB 550 mln in 2016.

Kuzbass Fuel Company owners approve RUB 993 mln in 2017 dividends On June 26, 2018 shareholders of Russia’s Kuzbass Fuel Company approved payment of RUB 10 per common share, or RUB 992.584 mln, in dividends for 2017. The remaining RUB 712.161 mln net profit will remain undistributed. The record date is July 6. Kuzbass Fuel Company paid RUB 6 per share, or RUB 595.55 mln, in dividends for 2016. The company’s key shareholders are CEO Igor Prokudin with a 50.01% stake and Chairman of the board of directors Vadim Danilov with 16.78%.

ALROSA holders approve paying RUB 38.6 bln in 2017 dividends On June 26, 2018 shareholders of Russian diamond mining giant ALROSA approved paying RUB 5.24 per share, or a total of RUB 38.59 bln, in dividends for 2017. The dividend payment will account for around 50% of the company’s net profit calculated under International Financial Reporting Standards (IFRS). The dividend policy of ALROSA encompasses payments of at least 35% of IFRS net profit in dividends. The company earmarked 50% of IFRS net profit in dividends for 2015 and 2016. The government owns 33.0256% in ALROSA, the republic of Yakutia has 25.0002%, the districts of the republic hold 8.0003%, and a 33.9739% stake is in free float.

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First Container Terminal to pay RUB 420 mln in 2017 dividends On June 26, 2018 shareholders of Russia’s First Container Terminal, a unit of Global Ports, approved paying RUB 13.125 per share, or a total of RUB 420 mln, in dividends for 2017. The shareholders also approved leaving the remaining RUB 2.546 bln net profit undistributed. Transportation Investments Holding Ltd controlled by Russian businessmen Nikita Mishin, Konstantin Nikolayev and Andrei Filatov, and APM Terminals of Denmark’s Maersk each own 30.75% in Global ports, Cyprus-based companies Ilibrinio Establishment Limited and Polozio Enterprises Limited each hold 9%, and free float accounts for 20.5%.

GV Gold to boost dividends for 2017 by 2.7% to RUB 2.2 bln On June 26, 2018 it was reported that Russia’s gold producer GV Gold would disburse RUB 2.238 bln, or RUB 40.6973 per share, for dividends for 2017, a 2.7% rise on the year. GV Gold paid RUB 700 mln in interim dividends for January-June 2017. The final dividends will amount to RUB 1.538 mln, or RUB 27.9663 per share. The remaining RUB 1.945 bln of RUB 4.183 bln net profit will be kept undistributed. Board members Sergei Dokuchayev, Valerian Tikhonov, and Natalya Opaleva each hold 20.36% in the company.

Sheremetyevo to pay RUB 2.1 bln in final dividends for 2017 On June 26, 2018 shareholders of Moscow’s Sheremetyevo International Airport approved paying around RUB 2.1 bln in final dividends for 2017. The company already paid over RUB 1 bln in dividends for January- September 2017. The airport has not paid dividends since 2012. Sheremetyevo Holding holds 66% in the airport, while the Federal State Property Management Agency holds 30.43%.

Gazprombank to pay RUB 21.3 bln in 2017 dividends On June 27, 2018 it was announced that Gazprombank shareholders voted for payment of RUB 21.303 bln, or RUB 13.04 per common and RUB 1,087 per type B preferred share, in dividends for 2017. The bank will pay no dividends for type A preferred shares. The record date is July 10. Gazprombank paid RUB 24.5 bln in dividends for 2016. Gas giant owns a 29.76% common share stake in the bank, private pension fund Gazfond holds 41.58%, and Vnesheconombank owns 8.5%. The Finance Ministry holds 100% of type A preferred shares and the Deposit Insurance Agency 100% of type B preferred shares.

WGC-2 owners approve paying RUB 0.0163 per share in 2017 dividends On June 27, 2018 shareholders of Russian power producer Wholesale Generating Company-2 (WGC-2) approved a decision to pay RUB 0.0163 per share, or RUB 1.73 bln, in dividends for 2017. The record date for the dividends is July 10. Controlled by Gazprom Energoholding, WGC-2 paid RUB 874.174 mln, or 0.825 kopecks per share, in dividends for 2016.

RusHydro holders approve paying RUB 11 bln in 2017 dividends On June 27, 2018 shareholders of Russian state-controlled hydropower giant RusHydro approved paying 2.63 kopecks per share, or a total of RUB 11.226 bln, in dividends for 2017. The payment will account for 50% of the company’s net profit calculated under International Financial Reporting Standards (IFRS). RusHydro paid RUB 19.876 bln in dividends for 2016.

Alfa-Bank owners approve RUB 9 bln in dividends for 2017 On June 27, 2018 Russia’s Alfa-Bank shareholders approved paying RUB 151.04 per common share, or a total of RUB 9 bln, in dividends for 2017. The record date for dividends is July 9. Alfa-Bank paid RUB 134.26 per share, or a total of RUB 8 bln, in dividends for 2016. AB Holding owns over 99% in Alfa-Bank, while Alfa- Capital Holdings (Cyprus) Limited owns less than 1%.

GAZ owners approve paying RUB 4.39 per preferred share in 2017 dividends On June 27, 2018 shareholders of Russian car maker GAZ approved paying RUB 4.39 per preferred share in dividends for 2017 and paying no dividends on common shares. The company paid RUB 1.58 per preferred share dividends for 2016 and RUB 1.34 for 2015. Engineering company Russian Machines, part of holding BasEl of , is the main shareholder of GAZ Group.

FGC UES holders approve paying RUB 19 bln in 2017 dividends On June 28, 2018 shareholders of Russia’s Federal Grid Company of Unified Energy Systems (FGC UES) approved paying 1.48 kopecks per share, or a total of RUB 18.88 bln, in dividends for 2017. The company already paid RUB 1.42 bln in dividends for January-March 2017. FGC UES paid RUB 18.185 bln, or slightly more than 25% of net profit under International Financial Reporting Standards (IFRS), in dividends for 2016. In 2017, the company’s net profit plummeted 60% to RUB 42.362 bln, as calculated under Russian Accounting Standards (RAS), while IFRS net profit rose 6.3% to RUB 72.7 bln. Power grid holding holds 80.13% in FGC UES.

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Norilsk Nickel to pay RUB 607.98 per share in dividends for 2017 On June 28, 2018 shareholders of Russian metals giant Norilsk Nickel approved payment of RUB 96.21 bln, or RUB 607.98 per common share, in dividends for 2017. The record date for the dividends is set for July 17. The company paid RUB 224.2 per share, or a total of RUB 35.479 bln, in dividends for January-June 2017. The company paid RUB 446.1 per share, or RUB 70.593 bln, in final dividends for 2016 and RUB 444.25 per share, or RUB 70.3 bln, in dividends for January-September. Interros of Vladimir Potanin owns 34.15% in Norilsk Nickel, RUSAL of Oleg Deripaska 27.82%.

CFO says MTS may pay RUB 5.1 bln in January-June 2018 dividends On June 28, 2018 Andrei Kamensky, vice president for finance, investment and M&A of major Russian mobile operator MTS, said that the company might spend about RUB 5.1 bln on interim dividends for January-June. MTS’ shareholders are offered to approve dividends for 2017 at RUB 46.762 bln, or RUB 23.4 per common share and RUB 46.8 per American depositary receipt. Multi-industry holding owns 47.21% of MTS’ capital, and 47.20% are in free float.

Eurobonds / DRs Promsvyazbank to buy back USD 110 mln of 2019 Eurobonds On June 22, 2018 it was reported that Russia’s Promsvyazbank would buy back USD 109.876 mln of Eurobonds maturing in 2019. Earlier in June, the bank announced an offer to buy back the 2019 Eurobonds at USD 970 per security. After the buyback, USD 78.527 mln of Eurobonds will remain in circulation. Promsvyazbank placed the USD 250 mln issue of 3-year Eurobonds in 2016 through PSB Finance.

Finance ministry to offer USD 3 bln of Eurobonds until end of 2018 On June 26, 2018 Anton Siluanov, Finance Minister, said that Russia’s Finance Ministry plans to offer USD 3 bln Eurobonds until the end of 2018. Russia’s foreign borrowing is capped by USD 7 bln for 2018, including offers of USD 3 bln of new securities and swaps of USD 4 bln older Eurobonds for newer issues. In April, the ministry placed USD 1.5 bln worth of new 11-year Eurobonds and USD 2.5 bln of additional Eurobonds maturing in 2047.

Tinkov to spend USD 20 mln on purchase of TCS Group GDRs On June 27, 2018 it was reported that Oleg Tinkov, the founder and major shareholder of TCS Group Holding, which includes and Tinkoff Insurance, plans to acquire up to USD 20 mln of the company’s global depositary receipts (GDRs). The businessman already bought 439,921 GDRs worth USD 9.2 mln of the total amount on June 25.

Sberbank says sells RUB 657.5 mln structured bonds tied to GDRs On June 28, 2018 it was announced that Russia’s biggest lender Sberbank sold RUB 657.5 mln out of RUB 3 bln issue of structured exchange bonds linked to the price of the bank’s global depositary receipts (GDR). Bids were accepted on May 7-24 and the placement started on May 25. Sberbank plans to accept bids for RUB 1 bln structured exchange bonds bound to NXS Bond Fund Stars ER on July 2-12 and for exchange bonds amounting to RUB 15 bln or more on June 28.

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.

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