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Company News SECURITIES MARKET NEWS LETTER Weekly SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody December 12, 2019 Issue No. 2019/47 Company News Uralkali holders approve merger with unit with treasury stake On December 5, 2019 it was reported that the shareholders of Russian fertilizer producer Uralkali had approved a merger with unit Uralkali-Technology that holds quasi-treasury shares in Uralkali. The decision was backed unanimously. Promsvyazbank to issue RUB 40.1bln additional shares On December 6, 2019 it was stated that Russia’s Promsvyazbank plans to raise the shareholder equity through a RUB 40.1 bln share issue. The bank will issue 40,085,959,745 ordinary shares under closed subscription for the current shareholder of the bank. It was confirmed that the bank’s management approved the decision on December 4, 2019. STLC buys 76.27% of National Reserve Bank’s common shares On December 6, 2019 it was stated that Russia’s State Transport Leasing Company (STLC) had acquired 76.27% of the common shares of National Reserve Bank. In September, Kommersant business daily reported that STLC and the Eurasian Development Bank (EDB) planned to buy almost 97% of National Reserve Bank from businessmen Alexander Lebedev and Yury Kudimov. STLC intended to buy Lebedev’s 78.19% stake, while the EDB was to acquire Kudimov’s 18.7% stake in the bank. Rosatom’s unit buys 30% in Delo Group’s managing company On December 9, 2019 it was stated that Atomenergoprom, a subsidiary of Russian state nuclear power corporation Rosatom, had bought a 30% stake in managing company Delo, the parent company of Delo Group of businessman Sergei Shishkaryov. On December 3, 2019 Rosatom said that the two companies planned to create a platform for the launch of an international transport and logistics business, including creation of an arctic container carrier. AvtoVAZ buys 50% in JV GM-AvtoVAZ, consolidates 100% On December 9, 2019 Russian car producer AvtoVAZ stated that it had signed a deal to buy a 50% stake in joint venture (JV) GM-AvtoVAZ to consolidate 100% of the firm and produce cars under the Lada brand. It was said that under the agreement, the plant owned by the joint venture will continue to produce and sell the Niva cars under the Chevrolet brand for some time, the cars will later receive the Lada tags. It was also mentioned that no changes are planned for the employees of the two companies. The existing contracts with the suppliers and Niva dealer centers will remain unchanged during the transition period. In the future GM- AvtoVAZ will be renamed. GM-Avtovaz is a joint venture between AvtoVAZ and U.S. General Motors, registered in 2001, where the companies hold parity stakes. The plant produces Chevrolet Niva cars, whose output fell 3% to 31,900 in 2018. The joint venture will become a 100% affiliate of AvtoVAZ. The financial details of the deal were not disclosed. Earlier on Monday, the Federal Antimonopoly Service cleared AvtoVAZ to acquire 50% in GM-AvtoVAZ. 1 Ecoculture considering an initial public offering (IPO) in 2024–2025 On December 9, 2019 CEO of Russian agricultural holding Ecoculture Alexander Rudakov told reporters that the company is considering an initial public offering (IPO) in 2024–2025. He said that they had already started consultations, but need to get prepared well and resolve certain issues such as international reporting and debt burden. Rudakov stated that he thinks to be there with time. He said however that the company is also considering alternative ways to attract financing, such as a bond placement. Ecoculture plans to invest RUB 115 bln in tripling the area of greenhouses to 663 hectares by 2023, the CEO said. Sistema says unit buys back RUB 54 mln worth of shares On December 9, 2019 it was stated that Sistema Finance, a unit of Russian multi-industry holding Sistema, had paid RUB 53.856 mln to buy back 3.6 mln common shares. Sistema Finance has purchased 118.904 mln of Sistema’s shares since the launch of a RUB 3 bln buyback program on September 17. Rosneft to offer RUB 10 bln bonds on secondary market On December 11, 2019 the reporters were told that Russian oil major Rosneft plans to offer RUB 10 bln of exchange bonds of two series on the secondary market. The company preliminarily plans to collect bids for the bonds on December 18. The final volume of the bonds will be defined upon results of the current buyback offer. Rosneft placed two 10-year exchange bond issues worth RUB 20 bln each in December 2013 at a coupon of 6.65%. Russian Regional Development Bank and brokerage company Region will act as organizers. PIK Group to offer RUB 7 bln bonds, final guidance at 8.25% On December 10, 2019 the reporters were told that Russian real estate developer PIK Group had set the volume of 5-year exchange bond offering at RUB 7 bln and the final first coupon guidance at 8.25%. The final guidance corresponds to a yield to maturity of 8.51%. The initial coupon guidance amounted to 8.25–8.4% and was lowered to 8.2–8.3% earlier in the day. The technical placement of the bonds is preliminarily scheduled for December 18. Alfa-Bank, BCS Global Markets, VTB Capital, Gazprombank, Credit Bank of Moscow, and Sovcombank are the organizers. Russian Aquaculture unit to buy out up to RUB 300 mln of shares On December 11, 2019 it was stated that the board of directors of fish producer Russian Aquaculture had approved buying out up to RUB 300 mln of the company’s voting shares by its unit. Only own funds will be used for the buyout. The shares will be bought at a market price as of the date of the purchase. The program will continue until the end of 2020 or until the limit sum is reached. Gazprom may pay 50% of adjusted IFRS net profit in dividends for 2021 On December 12, 2019 it was stated that the executive management of Russian gas giant Gazprom had approved a new dividend policy envisaging paying at least 30% of the adjusted net profit under International Financial Reporting Standards (IFRS) for 2019, at least 40% for 2020 and at least 50% for 2021 in dividends. The dividend policy will be submitted to the board of directors for approval. It was emphasized that in accordance with the draft new dividend policy, the net profit of the company will be adjusted for several non- monetary items (items of income and spending unrelated to the cash flow in the reporting period. The board of directors can decide on reduction of dividends if the ratio between adjusted net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) exceeds 2.5. This will allow Gazprom to retain a comfortable debt burden. Gazprom will implement the new dividend policy in its affiliates and controlled companies. Lukoil’s board of directors approves new dividend policy On December 12, 2019 it was stated that the board of directors of Russian oil major Lukoil had approved changes to the dividend policy, so the company would pay at least 100% of adjusted free cash flow in dividends. It was mentioned in a statement that the total amount of dividends on the company's issued shares, excluding the shares held by Lukoil Group entities, equals at least 100% of the company's adjusted free cash flow. The adjusted free cash flow will be calculated on the basis of Lukoil’s financial report calculated under International Financial Reporting Standards (IFRS), and it is defined as net cash from operating activity excluding capital expenditures, interest paid, payments on lease liabilities, and spending on buybacks of the company’s shares. The company will pay dividends twice a year basing calculations on financial reports for six months, Lukoil said. 2 Safmar Financial Investments to expand share buyback program On December 12, 2019 it was stated that the board of directors of Safmar Financial Investments (SFI), part of financial group Safmar of Russian tycoon Mikhail Gutseriyev, had approved expand the share buyback program. The new buyback program will be in force for one year. Purchase of the own shares will be financed by the holding with its own and borrowed money that will be raised very soon. The shares will be consolidated at the balance of the buyback operator, Weridge Investments Limited company. Previous 3- year buyback program amounting to up to RUB 6 bln is in force since November 2018. The investment portfolio of Safmar includes 100% in leasing company Europlan, 49% in insurer VSK, 100% in private pension fund Safmar, and 75% in POS-lending and online lending integrator Direkt Kredit Tsentr. Dividends/coupons Unipro shareholders approve 11.1 kopecks per share in dividends for January–September On December 5, 2019 it was stated that shareholders of Russian power producer Unipro had approved paying 11.1 kopecks per common share, or a total of RUB 7 bln in dividends for January–September, 2019. The record date is scheduled for December 15. The company paid 0.111 rubles per share, or a total of RUB 7 bln in dividends for January–September 2018, and 11.1 kopecks per share in dividends for 2018. Uniper Russia Holding GmbH, a 100%-subsidiary of Germany’s Uniper, holds 83.7% in Unipro. The company operates the Berezovskaya GRES, Surgutskaya GRES-2, Yaivinskaya GRES, Shaturskaya GRES, and Smolenskaya GRES power plants with a combined capacity of 11.2 gigawatts. T Plus holders approve 13.49 kopecks per share in January–September dividends On December 5, 2019 it was reported that the shareholders of Russian power utility T Plus had approved paying 13.49 kopecks per share in dividends for January–September, 2019.
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