SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody May 28, 2020 Issue No. 2020/20 Company News Samolet shareholders vote against new share issue for IPO On May 21, 2020 shareholders of Russian real estate developer Samolet voted against issuing additional common shares. Samolet earlier planned a new share issue for an initial public offering (IPO), but later abandoned the idea. A spokesperson for the company stated that the developer wants to approve a new additional share issue plan in the next two months and a half, but does not plan an IPO until the autumn. Rosneft board appoints Igor Sechin as CEO for 5 more years On May 22, 2020 the board of directors of Russian oil major Rosneft approved the appointment of Igor Sechin as the CEO of the company for five more years. Sechin became CEO of Rosneft in May 2012. Initially, his contract was valid until May 2015, when his powers were prolonged for five years. MTS board nominates members, including Channel One CEO Ernst On May 22, 2020 the board of directors of major Russian mobile operator MTS nominated a list of board candidates, including TV channel Channel One CEO Konstantin Ernst, to be elected at an annual general meeting of shareholders on June 24. The list also contains Felix Yevtushenkov, member of the board of directors of multi-industry holding Sistema, MTS’ core shareholder. The board also approved Natalia Mikheyeva as director for internal audit and control. Rosneftegaz cuts stake in Rosneft to 40.4% from 50% plus one share On May 25, 2020 it was reported that Russian state energy holding Rosneftegaz reduced its shareholding in oil major Rosneft to 40.4% from 50% plus one share on March 28 to lose its controlling position. Rosneft’s subsidiary RN-NeftCapitalInvest acquired 9.6% in the parent company on April 30. Rosneft also left its shareholdings in Venezuelan companies including 100% of Grupo Rosneft C.A., 40% of Petrovictoria S.A., and 80% of the National Oil Consortium. The company also left its 100% shareholding in Germany-based Rosneft Energia GmbH and Russia-based private security company RN-Okhrana-Ryazan. Rosneft’s First Vice President Pavel Fyodorov said earlier in May that state oil company Roszarubezhneft had acquired all assets of Rosneft in Venezuela. It also became known that Roszarubezhneft had acquired a stake in RN- Okhrana-Ryazan, and the security firm’s charter capital was multiplied to RUB 322.752 bln from RUB 250,000. Globaltruck unit buys back 10,000 shares in parent firm in May 2020 On May 25, 2020 it was announced that Globaltruck Logistic, a subsidiary of Russian cargo carrier Globaltruck, bought back 10,000 shares in the parent company in May, raising the stake to 921,667 shares. RUB 386 mln buyback program has been in force since November 11, 2019 and will last until May 31, 2021 or until the limit is reached in price or the amount of shares. Under the program, the company buys its shares at no more than RUB 132 per security. The unit bought back a 0.33% stake in the parent company in November 2019, a 0.34% stake in December 2019, a 0.13% stake in January 2020, a 0.47% stake in February, and a 0.24% stake in March. Russian Agricultural Bank's board approves raising capital to RUB 459 bln On May 25, 2020 the supervisory board of Russian Agricultural Bank approved raising charter capital by RUB 20 bln to RUB 459.483 bln. 1 Rosneft buys back 1.037 mln shares for USD 5.3 mln on May 18–22, 2020 On May 26, 2020 it was reported that Russian oil major Rosneft bought back 1,037,435 shares and global depositary receipts (GDRs) for USD 5.3 mln in a week from May 18 through May 22. The weighted average price stood at USD 5.06 apiece. Since the launch of USD 2 bln buyback program on March 23, the company bought back 34.940 mln securities for USD 146.6 mln. Sistema raises stake in Sintez to 56.2% for RUB 960 mln On May 26, 2020 it was announced that Russian multi-industry holding Sistema raised its stake in pharmaceutical company Sintez to 56.2% from 46.5% for RUB 959.72 mln. Sistema finances Sinocom together with an undisclosed partner. The price amounted to RUB 62,156.53 per ordinary share and RUB 5,269.07 per preferred share, so the sum of the deal reached RUB 959.72 mln, and Sinocom’s stake in Sintez grew to 56.2%. Sinocom bought a 46.5% stake in Sintez together with a financial partner for RUB 8.2 bln in August 2019. The other large shareholder of Sintez is National Immunobiological Company (Nacimbio), a subsidiary of state industrial corporation Rostec, with a 32.38% stake. Supreme court rules valid Orient Express Bk stake sale to Avetisyan On May 27, 2020 it was stated that the Russian Supreme Court upheld on May 27 earlier court rulings confirming validity of a 9.99% stake sale in Orient Express Bank to Finvision of Artyom Avetisyan. A cassation claim by Evision asking to pass the case to the Chamber for Commercial Disputes was turned down. 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. Bank Saint Petersburg holders approve cutting capital to RUB 507.7 mln On May 28, 2020 shareholders of Bank Saint Petersburg, the biggest bank in Russia’s northwest, have approved reducing the charter capital to RUB 507.7 mln through cancellation of shares. The bank will cancel 12 mln shares. RUSAL to collect bids for RUB 10 bln bonds on June 2, 2020 On May 28, 2020 a banking source said that Russian aluminum giant UC RUSAL planned to collect bids for at least RUB 10 bln of 10-year exchange bonds on June 2. The coupon guidance amounts to 6.55–6.75%, which corresponds to a yield of 6.71–6.92% to a 3-year buyback offer. The technical placement is preliminarily scheduled for June 9. BCS Global Markets, VTB Capital, Gazprombank, Credit Bank of Moscow, Otkritie Bank, Sberbank CIB, and Sovcombank will act as organizers. Rosagroleasing cuts RUB 5 bln bond guidance to 7.35–7.4% On May 28, 2020 a banking source stated that Russian state-controlled agricultural leasing company Rosagroleasing has further lowered the coupon guidance for RUB 5 bln 5-year exchange bonds to 7.35– 7.4%. The initial guidance amounted to 7.6–7.9% and was lowered to 7.4–7.45% earlier in the day. The technical placement is scheduled for June 3. Moscow Industrial Bank, Russian Agricultural Bank, and Sovcombank will act as organizers. Dividends/coupons Gazprom board recommends RUB 15.24 per share in dividends for 2019 On May 21, 2020 the board of directors of Russian gas giant Gazprom recommended paying RUB 15.24 per share, or a total of RUB 360.784 bln, in dividends for 2019. The payment accounts for 30% of the profit attributable to shareholders for 2019, as calculated under International Financial Reporting Standards. No plans to revise Inter RAO dividend policy On May 22, 2020 Yevgeny Miroshnichenko, Director of the company’s financial and economic center at Russian power holding Inter RAO, said that the company did not plan to revise its dividend policy, which envisages paying in dividends 25% of the net profit under International Financial Reporting Standards (IFRS). He also stated that the company did not plan to revise its investment program for 2020 either. The company expects its financial metrics to worsen in 2020, but hopes that the decrease will be insignificant. The executive also said that Inter RAO plans to discuss a new development strategy in August or September. Mostotrest board recommends paying no dividends for 2019 On May 25, 2020 the board of directors of Russian construction company Mostotrest recommended paying no dividends for 2019 and leaving a net profit of RUB 1.732 bln undistributed. The decision was made in 2 accordance with a government ruling on a moratorium on bankruptcy, which encompasses a ban on the payment of dividends for systemically important enterprises. TGC-14 holders approve paying no dividends for 2019 On May 26, 2020 it was reported that shareholders of Russian power producer Territorial Generating Company-14 (TGC-14) approved paying no dividends for 2019. The company did not pay dividends for 2016–2018 as well. In 2019, TGC-14’s net profit almost quadrupled to RUB 344.55 mln as calculated under Russian Accounting Standards (RAS) and soared to RUB 296.652 mln under International Financial Reporting Standards (IFRS). Detsky Mir board recommends paying RUB 2.2 bln in 2019 dividends On May 26, 2020 the board of directors of Russia’s largest children goods retailer Detsky Mir recommended paying RUB 3 per share, or a total of RUB 2.217 bln, in dividends for 2019. The dividend payment will account for 90% of the company’s net profit under International Financial Reporting Standards (IFRS) or 55% of net profit under Russian Accounting Standards (RAS) for the fourth quarter of 2019. CEO Maria Davydova said that Detsky Mir might pay the remaining part of the undistributed net profit for the fourth quarter of 2019 in dividends until the end of this year.