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Company News SECURITIES MARKET NEWS SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody December 27, 2018 Issue No. 2018/49 VTB Bank Custody wishes you a happy and prosperous 2019 New Year full of success, wealth and joy! Let all your dreams come true! Company News Government may consider EDC-Schlumberger deal in January-February 2019 On December 20, 2018 Andrei Tsyganov, Deputy Director of the Federal Antimonopoly Service, said that the Russian government’s commission for foreign investment control might consider an acquisition by U.S. oilfield servicing giant Schlumberger of a stake in Eurasia Drilling Company (EDC) in January-February. When asked about the date of the commission’s meeting where the EDC-Schlumberger deal might be discussed, he said that in January or in February. In July 2017, EDC’s shareholders approved the sale of a 51% stake in the company to Schlumberger. In November, the Federal Antimonopoly Service’s Deputy Director Andrei Tsyganov said that the service and Schlumberger were working on a mechanism to protect the company’s investment in EDC and Russian economic interests in case of new Western sanctions. In April 2018, Russian government’s commission for foreign investment control preliminarily approved Schlumberger’s bid to acquire between 25% plus one share and 49% in EDC. Promsvyazbank files RUB 282 bln suit versus former owners On December 21, 2018 it was reported that Russia’s Promsvyazbank filed RUB 282 bln suit against former executives and top managers of the bank and former beneficiary owners brothers Dmitry and Alexei Ananyev to the Moscow Arbitration Court. Promsvyazbank filed a suit to the Moscow Arbitration Court seeking redemption of losses from individuals who controlled the bank before December 15, 2017 - Dmitry and Alexei Ananyev - and against members of the management board, top managers, and executives that signed loss-making deals on behalf of the bank. The bank is working with the central bank in order to get back the assets that former owners transferred from the bank to foreign countries. On December 19, the Moscow Arbitration Court considered a Promsvyazbank suit against Promsvyaz Capital B.V., through which the Ananyevs used to control the bank, and nine other foreign companies affiliated with former owners of the bank. Promsvyazbank wanted the court to void deals conducted by the owners before the launch of a bailout by the central bank and to award redemption of about RUB 33 bln and USD 506 mln. The court decided to bring to court Dmitry Ananyev as a third party under the lawsuit, and delayed hearing until February 5. Trafigura may buy 49% in Rosneft’s Rospan for USD 4 bln On December 24, 2018 it was announced that Russian oil major Rosneft offered 49% in its natural gas project Rospan International to commodity trader Trafigura for USD 4 bln. Rosneft and Trafigura declined to comment. Rosneft and Trafigura launched preparations to the deal this summer, but suspended them in November due to contraction of oil prices. Some sources stated that Trafigura was to take out a loan in a Russian bank secured by shares in Rospan in order to pay for the deal. Rospan unites several oil and gas fields with combined reserves of 878 bln cubic meters of gas and 191 mln tonnes of oil and condensate. Rosneft CEO Igor Sechin said previously that Rospan would produce 20 bln cubic meters of gas in 2019. Vasily Tanurkov, an analyst at the Analytical Credit Rating Agency (ACRA), said that even an optimistic estimate of Rospan’s value would amount to USD 5 bln, so it would be a great deal for Rosneft to sell 49% in the project for USD 4 bln. Still, the nature of Trafigura’s interest in the project is unclear, as it would be tough to monetize the project’s gas taking into account that only gas giant Gazprom is allowed to export natural gas. 1 MegaFon board re-elects USM Management’s Bystrykh as chairman On December 24, 2018 the board of directors of big Russian mobile operator MegaFon re-elected its chairman Yevgeny Bystrykh, deputy CEO for economics and finance at USM Management. The board earlier elected Bystrykh as chairman in January. MegaFon Chief Operating Officer Anna Serebryanikova earlier joined the board but will soon leave the operator for USM Management. Evraz says key shareholders Abramov, Frolov split stakes On December 24, 2018 it was stated that Crosland Global Limited, one of the main shareholders of mining giant Evraz, earlier controlled by Alexander Abramov and Alexander Frolov, had given a part of the stake in Evraz to Abiglaze Ltd. As a result of the deal, Abiglaze, owned by Abramov, holds 298.626 mln common shares of Evraz, or 20.69% of total voting shares. Crosland, owned by Frolov, holds 149.118 mln shares, or 10.33%. Evraz will reconsider its agreement with Crosland in January and will sign an agreement with Abiglaze in accordance with the rules of listing. In September, Lanebrook Ltd sold the entire stake in the company, while Crosland Global Limited consolidated a 31.37% voting stake and Greenleas International Holdings Ltd. consolidated 30.52%. Lanebrook Ltd. is owned by Roman Abramovich, Alexander Abramov and Alexander Frolov. The change in Evraz’ shareholder structure did not lead to changes in the stakes of beneficiaries -- Abramov holds 20.92%, Frolov 10.45% and Yevgeny Shvidler 2.97%, while Abramovich’s stake in Evraz now amounts to 30.52%. Lukoil buys back RUB 4 bln shares, USD 95 mln GDRs on December 17-21, 2018 On December 25, 2018 Lukoil Securities Limited, a unit of Russian oil major Lukoil, paid RUB 4 bln to buy 809,265 shares and USD 94.9 mln to buy 1.313 mln global depositary receipts (GDRs) on the open market in the period from December 17 through December 21. Lukoil bought the shares at an average price of RUB 4,893 per share and the GDRs at an average price of USD 72.3 per security. In August, Lukoil announced the start of USD 3 bln buyback program that would be valid through December 30, 2022. Private owners can sell 10% in Sheremetyevo to foreign investor On December 25, 2018 Alexander Ponomarenko, Board of Directors Chairman and co-owner of Moscow Sheremetyevo airport, said that private shareholders of the airport planned to sell a 10% stake to a strategic investor in 2019. The company is at a stage of signing an agreement with JP Morgan in order to sell the 10%. He also said that Sheremetyevo wants to raise passenger traffic to 52 mln people in 2019 from 45 mln expected in 2018. Sheremetyevo is controlled by 66% by Sheremetyevo Holding, in which Cyprus-based TPS Avia Holding holds 100%. Ponomarenko and Alexander Skorobogatko own 65.22% in TPS Avia Holding, Arkady Rotenberg 34.78%. The Federal State Property Management Agency owns 30.43% in Sheremetyevo; Aeroflot and VEB Capital hold minority stakes. Russia’s Finance Ministry places RUB 7.3 bln of OFZ bonds On December 26, 2018 Russia’s Finance Ministry sold RUB 7.29 bln worth of OFZ 25083 government bonds maturing in December 2021. The cut-off price amounted to 97.05%, the average price to 97.0554%. The cut- off and the weighted average yield amounted to 8.3% annually. Demand for the bonds totaled RUB 19.94 bln. Supreme Court sides with NCSP in RUB 9.7 bln dispute with antitrust On December 26, 2018 it was reported that the Presidium of the Supreme Court of Russia sided with Novorossiysk Commercial Sea Port (NCSP) and voided two rulings of the Federal Antimonopoly Service on the port’s tariffs, under which NCSP was to pay RUB 9.7 bln fine. Previously, the antimonopoly service said NCSP set tariffs for cargo transshipments in USD, which led to the port’s prices soaring 72% in 2014 and profitability jumping to 300% in 2015. The service issued RUB 9.7 bln fine for the company and ordered it to switch prices into RUB. NCSP said that the service had carried out a wrong analysis of the market and failed to establish its geographical borders properly. The port said that it competes with ports of Tuapse, Sochi, and Kerch and with Ukrainian ports, so it is not a monopoly player. Three lower courts sided with the company and acknowledged the service’s fine and orders illegal. The Supreme Court also cancelled a ruling of its chamber for commercial disputes which cancelled decisions of the lower courts and sent the case for reconsideration in October. Dividends/coupons NLMK to pay RUB 6.04 per share in July-September 2018 dividends On December 21, 2018 shareholders of Russian steelmaker Novolipetsk Steel (NLMK) approved paying RUB 6.04 per share in dividends for July-September. The record date is January 9. The company earlier 2 approved paying RUB 5.73 per share in dividends for January-March and RUB 5.24 per share in dividends for April-June. Vladimir Lisin holds around 84% in NLMK through Fletcher Group. Rostelecom to debut in paying out January-September 2018 dividends of RUB 7 bln On December 24, 2018 shareholders of Russian state-controlled telecom operator Rostelecom approved paying the company’s first interim dividend for January-September of RUB 6.961 bln, or RUB 2.5 per common share of Class A. The dividends will account for 55% of the company’s January-September net profit, calculated under International Financial Reporting Standards. The shareholders’ register for the dividends will be closed on January 13, 2019. Rostelecom paid RUB 14.05 bln in dividends for 2017, or RUB 5.05 per common and preferred share.
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