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Presented by: VTB Bank, Custody

May 21, 2020 Issue No. 2020/19

Company News

T Plus, Energoholding asset merger still possible On May 15, 2020 Andrei Vagner, CEO of , said that a merger of assets of Russian power utility T Plus and Gazprom Energoholding was still possible, although would take time as the companies would reevaluate assets. T Plus and Gazprom Energoholding discussed their possible merger in 2011, but the deal was blocked by the Federal Antimonopoly Service. In 2018, talks resumed after T Plus shareholder Viktor Vekselberg and his assets were blacklisted by the U.S. In September 2018, T Plus and Gazprom Energoholding ordered an asset valuation to create a joint venture. Vekselberg reduced his stake in T Plus to 39.59% from 57.1%. In March 2019, business daily Kommersant reported that T Plus was appraised at RUB 40–45 bln, Gazprom Energoholding at RUB 360 bln, while T Plus parent holding Renova estimated its assets at least at RUB 100 bln.

Rosseti becomes sole administrator of FGC UES On May 18, 2020 it was reported that Russian state power grid holding became the sole administrative body of Federal Grid Company of Unified Energy Systems (FGC UES), and former CEO of FGC UES Andrei Murov would become Rosseti’s first deputy CEO in charge of operating activity. The shareholders of FGC UES approved the decision at an annual general meeting, the board of directors of the company approved a contract with the administrative company, and the contract was signed by Murov and Rosseti’s CEO Pavel Livinsky, meaning all necessary proceedings have been finished. Before the decision, FGC UES had a certain degree of autonomy, and operated under government orders.

Rosneft says buys back 1.7 mln shares for USD 7.9 mln on May 11–15, 2020 On May 18, 2020 it was announced that Russian oil major bought back 1,666,286 shares for USD 7.9 mln in the week from May 11 through May 15. The weighted average price of the share stood at USD 4.72 per paper. Since the launch of USD 2 bln buyback program on March 23, the company bought back 33.903 mln securities for USD 141.3 mln.

Siberian Generating Company’s CEO becomes CEO of SUEK On May 18, 2020 it was stated that Stepan Solzhenitsyn, CEO of Russia’s Siberian Generating Company, became the CEO of Siberian Coal Energy Company (SUEK) replacing Vladimir Rashevsky. Rashevsky will remain as a member of the board of directors of SUEK, and he will become a member of the board of directors of fertilizer producer EuroChem.

Vlozhsky Pipe Plant publishes offer to buy TMK shares for RUB 61 On May 18, 2020 the Volzhsky Pipe Plant, a subsidiary of Russian oil and gas pipe producer TMK, published a voluntary offer to buy 358.758 mln shares in the parent company for RUB 61 per paper. In total, the subsidiary may spend RUB 21.884 bln on the deal. The deadline for approval of the voluntary offer is 70 days after TMK receives it. In early April, TMK announced its decision to buy back the shares through the subsidiary and to delist shares from the London Stock Exchange in July. But the central bank considered the Volzhsky Pipe Plant’s offer noncompliant with the law and issued an order to the plant. The subsidiary submitted an amended offer to the central bank on April 30.

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Sberbank's board postpones AGM to September 25, 2020 On May 19, 2020 German Gref, CEO of Russia's biggest lender Sberbank, said that the bank’s supervisory board postponed the annual general meeting of the shareholders to September 25 from April 24. He also said that the supervisory board would meet in the second half of August to decide on the dividends for 2019. Gref separately said that Sberbank planned to reduce its foreign presence but this decision was not connected with the pandemic.

TMK says to sum up buyback results on around August 7, 2020 On May 19, 2020 it was reported that Russian oil and gas pipe maker TMK planned to summarize the results of a shares buyback on around August 7. In April, TMK announced a buyback of over 358 mln of its shares through its subsidiary Volzhsky Pipe Plant at RUB 61 apiece, and further delisting from the London Stock Exchange in July. But the central bank considered the Volzhsky Pipe Plant’s offer noncompliant with the law and issued an order to the plant. The subsidiary submitted an amended offer to the central bank on April 30. The buyback offer is valid until July 27.

Government orders to appoint Sechin as Rosneft CEO for 5 years On May 20, 2020 the Russian government approved directives to appoint Igor Sechin as CEO of oil major Rosneft for another five 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. The board of directors is slated to consider the CEO appointment on May 21.

Dividends/coupons Sibur says to pay RUB 17.6 bln in dividends for July–December 2019 On May 14, 2020 it was reported that Russian petrochemical holding Sibur would pay RUB 17.559 bln in dividends for July–December 2019. The company’s subsidiary NIPIGAS also distributed dividends to its shareholders in April. In early March, Sibur’s board of director recommended paying RUB 34.333 bln in total dividends for 2019, including RUB 16.7 bln paid by the company for January–June and RUB 17.5 bln to be paid for the second half of the year. The shareholders were to consider the recommendation at an annual general meeting scheduled for April 2. Leonid Mikhelson, co-owner of independent gas producer , controls 48.5% in Sibur. Tycoon Gennady Timchenko owns 17% in Sibur, acting and former top managers of the company own 14.5% in total, while China’s Sinopec and the Silk Road Fund own 10% each.

Norilsk says owners approve RUB 557.2 per share in 2019 dividends On May 14, 2020 shareholders of Russia’s metals giant approved paying RUB 557.2 per share, or a total of RUB 88.2 bln, in final dividends for 2019. With the interim dividends for January–June 2019 and January–September 2019, which amounted to USD 3.6 bln, the entire dividend payments for the year will amount to USD 4.8 bln. The record date is May 25.

Obuv Rossii board recommends paying no dividends for 2019 On May 15, 2020 the board of directors of Russia’s shoe retailer Obuv Rossii Group recommended paying no dividends for 2019. The shareholders will decide on the issue during an annual general meeting on June 19. The shareholder register for participation will be closed on May 25. The company paid RUB 2.36 per share in dividends for 2018.

Quadra board recommends paying no dividends for 2019 On May 15, 2020 the board of directors of Russia’s Quadra Power Generation recommended paying no dividends for 2019. The shareholders will consider the recommendation at an annual general meeting on June 19. Quadra paid dividends only for preferred shares for 2010 and 2011. After 2012, the company paid no dividends.

TransContainer says to pay no final dividends for 2019 On May 15, 2020 shareholders of Russian railway container operator TransContainer voted against the payment of dividends for 2019 due to the pandemic and a high market volatility. The board of directors earlier recommended paying RUB 53.27 per share, or a total of RUB 740.175 mln, in final dividends for 2019. The company earlier paid RUB 154.57 per share, or a total of RUB 2.147 bln, in interim dividends for January–June 2019. For 2018, the company paid no interim dividends, but paid RUB 480.37 per share, or 75% of its Russian Accounting Standards (RAS) net profit, in final dividends for the year.

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FGC UES shareholders approve RUB 0.0095 per share in dividends for 2019 On May 15, 2020 it was reported that shareholders of Russia’s Federal Grid Company of Unified Energy Systems (FGC UES) approved paying 0.95 kopecks per common share in dividends for 2019. The total amount of dividends for 2019 with interim dividends will reach RUB 23.3 bln. For 2018, the company paid RUB 20.45 bln in dividends. FGC UES’s policy envisages paying in dividends 50% of the net profit calculated under Russian Accounting Standards (RAS) or International Financial Reporting Standards (IFRS).

MGTS says board wants no 2019 dividends amid COVID-19 situation On May 15, 2020 it was announced that he board of directors of City Telephone Company (MGTS), a fixed line unit of mobile operator MTS, did not recommend a general meeting of shareholders on June 19 to distribute the net profit or pay dividends for 2019 amid the coronavirus situation. MGTS paid RUB 22.091 bln in total in dividends for 2018, or RUB 232 per ordinary and preferred share.

Bashneft says can pay RUB 107.81 per share in dividends for 2019 On May 15, 2020 the board of directors of Russian oil company Bashneft offered to pay RUB 107.81 per common and class A preferred share in dividends for 2019, or a total of RUB 19.151 bln. The dividends on common shares can amount to RUB 15.939 bln, the class A preferred share ones to RUB 3.211 bln. The shareholders will decide on the issue at an annual general meeting on June 24. The record date is July 6. The company paid a total of RUB 28.2 bln in dividends for 2018, which accounted for 29% of the 2018 International Financial Reporting Standards (IFRS) net profit.

M.Video says board of directors offers to pay no 2019 dividends On May 18, 2020 the board of directors of Russian electronics retailer M.Video recommended paying no final dividends for 2019. The shareholders will decide on the issue at an annual general meeting slated for June 22. The shareholder register for the meeting will be closed on May 28. M.Video paid RUB 6 bln, or RUB 33.37 per share in dividends for January–September. Safmar of Mikhail Gutseriyev owns 73.5% in M.Video through Cyprus-based Ericaria Holdings Ltd. Germany's Media-Saturn-Holding owns 15%.

Sistema’s board recommends RUB 1.254 bln in dividends for 2019 On May 18, 2020 the board of directors of Russian multi-industry holding recommended payment of RUB 0.13 per ordinary share or RUB 2.6 per global depository receipt, or a total of RUB 1.254 bln, in dividends for 2019. The shareholders will consider the recommendation on June 27 at an annual general meeting in the form of absentee voting. The register for the meeting closes on June 2, and the record date for the dividends is July 16. The board also approved a list of 11 candidates for 12 seats in the board of directors that the shareholders will elect on June 27. The first-time candidates to the board are Anatoly Chubais, CEO of state nanotechnology company Rusnano, and Etienne Schneider, Luxembourg’s former deputy prime minister. According to the dividend policy of Sistema, the company should pay total dividends for a year that should amount to the highest of two figures – either RUB 1.19 per share or a 6% dividend yield to a weighted average price of Sistema’s shares for the previous year. But the current payment is lower than envisioned by the policy as the company has to reduce its debt. Sistema paid RUB 0.11 per share, or RUB 2.2 per GDR – a total of RUB 1.062 bln in final dividends for 2018. Vladimir Yevtushenkov owns 59.2% in Sistema, while his son Feliks owns 5.1817%.

Transneft says may pay 75% of profit in dividends if tariff raised On May 18, 2020 it was reported that Russian oil pipeline monopoly may pay 50–75% of its net profit in dividends if the government raises the company’s oil pumping tariff to the market level. Reduction of tariffs will lead to losses of the state. Transneft pays RUB 40–79 of each RUB 100 of net profit to the government, while the oil companies pay only RUB 14 per RUB 100 of net profit to the state in dividends, while RUB 42 go to private shareholders.

Kuzbass Fuel Company board of directors offers to pay no 2019 dividends On May 18, 2020 the board of directors of Russian steam coal producer Kuzbass Fuel Company recommended paying no dividends for 2019. The shareholders will consider the proposal at an annual general meeting on June 17. The register for the meeting will be closed on May 25. The company did not pay interim dividends in 2019 and dividends for 2018. A company of Mikhail and Said Gutseriyevs is the key shareholder of Kuzbass Fuel Company.

UTair board recommends paying no dividends for 2019 On May 18, 2020 the supervisory board of Russian airline UTair recommended paying no dividends for 2019 due to the absence of a net profit. The company earlier posted a net loss of RUB 14.406 bln for 2019, as calculated under Russian Accounting Standards (RAS). UTair did not pay dividends for 2016–2018 as well.

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Lukoil board recommends RUB 350 per share in final dividends for 2019 On May 18, 2020 the board of directors of Russian oil major recommended paying RUB 350 per share in final dividends for 2019. The company already paid RUB 192 per share in dividends for January– September 2019. The shareholders will consider the recommendation at an annual general meeting to be held in absentia on June 23.

Credit Bank of Moscow board of directors recommends no 2019 dividends On May 19, 2020 the board of directors of recommended paying no dividends for 2019. The shareholders will decide on the proposal at an annual general meeting on June 19. The bank paid 11 kopecks per share in dividends for 2018.

VimpelCom says board of directors wants to quadruple 2019 dividends On May 19, 2020 the board of directors of Russian mobile operator VimpelCom, working under brand Beeline, recommended an annual meeting of shareholders raise dividends for 2019 to RUB 29.999 bln in comparison to RUB 8 bln paid for 2018. VimpelCom can pay RUB 585 per ordinary share and RUB 0.001 per preferred share. The company will close the register for the shareholders entitled for the payment on July 10. The annual general meeting is scheduled on June 30 with the register for the meeting to close on May 28.

Fortum holders approve paying RUB 18.33 per share in 2019 dividends On May 19, 2020 shareholders of Russian power utility Fortum, a subsidiary of Finland’s Fortum, approved paying RUB 18.33 per share, or a total of RUB 16.137 bln, in dividends for 2019. The dividend payout accounts for 100% of the company’s net profit for the year. The record date for the dividends is May 25. For 2018, the company paid RUB 32.189 per common share in dividends. Fortum Russia B.V. holds 69.9% in the power utility, while Fortum Holding B.V. has 28.35%.

Surgutneftegas may pay RUB 0.65 per ordinary and RUB 0.97 per preferred share in 2019 dividends On May 20, 2020 the board of directors of Russian oil company recommended paying RUB 0.65 per ordinary share and RUB 0.97 per preferred share in final dividends for 2019. The record date for the dividends is July 20. Surgutneftegas paid RUB 0.65 per ordinary share and RUB 7.62 per preferred share in final dividends for 2018, and RUB 0.65 and RUB 1.38, respectively, in final dividends for 2017.

Novoship’s board of directors recommends RUB 4.6 bln in 2019 dividends On May 20, 2020 the board of directors of Russian shipping company Novoship, a unit of Sovcomflot, recommended paying RUB 4.6 bln in dividends for 2019. The shareholders will consider the issue at an annual general meeting. The company paid RUB 2.5 per share in final dividends for 2018, and the combined dividends for the year made RUB 2.02 bln.

Inter RAO says to pay 19.6 kopecks per share in dividends for 2019 On May 20, 2020 it was reported that shareholders of Russian power utility Inter RAO approved payment of 19.6 kopecks per share, or a total of RUB 20.48 bln, in final dividends for 2019. The record date for the dividends is June 1. The payment accounts for 25% of the company’s net profit for the year calculated under International Financial Reporting Standards (IFRS). The company paid 17 kopecks per share, or a total of RUB 17.92 bln in dividends for 2018, which also accounted for 25% of the IFRS net profit for the year. State- owned holding Rosneftegaz holds 27.63% in Inter RAO, Federal Grid Company of Unified Energy System (FGC UES) has 8.57%, Inter RAO Capital owns 29.56%, and free float accounts for 34.24%.

Qiwi board recommends paying USD 0.14 per share in January–March 2020 dividends On May 20, 2020 the board of directors of Russian payment system operator Qiwi recommended paying USD 0.14 per share in dividends for January–March as the company aims to distribute at least 50% of the adjusted net profit for 2020. The dividend record date is June 2, and the company intends to pay the dividend on June 4. The holders of American depositary shares will receive the dividend shortly thereafter. Qiwi’s depositary receipts jumped by 6.16% to RUB 1,069 as of 2.07 p.m. on the .

Raspadskaya owners approve paying RUB 2.83 per share in 2019 dividends On May 20, 2020 shareholders of Russian coal producer Raspadskaya approved paying RUB 2.83 per common share in dividends for 2019. The record date is June 8. Raspadskaya is part of U.K.-based steel and mining giant Evraz, which operates mainly in Russia.

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Eurobonds / DRs says finishes early repayment of convertible 2021 Eurobond On May 14, 2020 it was announced that Russian gold producer Polyus finished early redemption of convertible 2021 Eurobonds. The company sold USD 250 mln Eurobond issue in January 2018 with a coupon of 1%. The bonds could be redeemed early, after two years, if the price of global depositary receipts (GDRs) into which the bonds would be converted exceeds their face value by 130%. After an April early repayment announcement, the bondholders were able to use their right to convert the securities into GDRs. As a result, 4.09 mln GDRs were distributed among the bondholders, which accounts for about 1.52% of the company’s shareholder equity. In total, the company gave 4.5 mln GDRs to the holders of the Eurobonds, or an about 1.68% stake in the company, so its free-float grew 22.33%. Major beneficiary owner of Polyus is tycoon Said Kerimov.

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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