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Home , Alexander Abramov, Enel Russia, Iskander Makhmudov, Roman Abramovich

SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly

Presented by: VTB Bank, Custody

June 7, 2018 Issue No. 2018/20

Please be advised that June 12 th is a public holiday (“ Day”) and an official day off in the Russian Federation. Please note that June 9 th is a short working day and June 11 th is an official day off.

Company News

MGTS board appoints former Sitronics head Kuznetsov as CEO On June 1, 2018 the board of directors of City Telephone Company (MGTS), a fixed line unit of mobile operator MTS, appointed as new general director, starting from June 1, Pavel Kuznetsov, a former head of microelectronics company Sitronics. Kuznetsov replaced Andrei Yershov, who had been at MGTS’s helm since October 2012. Yershov resigned and will deal with project activities. The board also appointed its chairman Kirill Dmitriyev, vice president for sales at MTS, and replaced on this position Andrei Dubovskov, former chief of MTS and now CEO of multi-industry holding Sistema, which owns Sitronics and controls MTS.

En+ Group CEO Maxim Sokov leaves company On June 4, 2018 it was reported that Maxim Sokov, president and CEO of Russia’s sanctions-hit En+ Group, resigned from his post and left the company’s board of directors from June 1.

Central bank voids buyout offer by Alliance Rostec to AvtoVAZ owners On June 5, 2018 it was reported that the Russian central bank deemed void an obligatory buyout offer by Alliance Rostec to the minority shareholders of car producer AvtoVAZ. The offer covers 1.593 bln common shares and 244.185 mln preferred class A shares. AvtoVAZ has been implementing a financial recovery program since autumn 2016. In April, the second stage of injecting additional capital into AvtoVAZ was finished which resulted in a rise of the stake of Alliance Rostec Auto B.V., joint venture between Russian state industrial holding Rostec and Renault-Nissan Alliance, in the company to 83.5% from 64.6%.

Summa plans to sell 25% stake in TransContainer On June 7, 2018 it was announced that Russia’s Far-Eastern Shipping Company (FESCO), part of Ziyavudin Magomedov’s Summa Group, was collecting bids to sell its 25.07% stake in railway container operator TransContainer. Businessmen and are interested in buying the stake and their companies have already filed a bid. UCL Holding of Vladimir Lisin, which earlier expressed interest in buying 50% plus two shares in TransContainer from Russian Railways, could also be one of the bidders. FESCO is assessing its portfolio of assets on a regular basis, but no final decisions about changing its stake in TransContainer have been so far made. United Transport and Logistics Company (UTLC) of Russia, , and Kazakhstan owns 50% plus two shares in TransContainer and Enisey Capital of Abramovich and Abramov holds 24.5051%.

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Dividends/coupons Federal Passenger Company may not pay final dividends for 2017 On May 31, 2018 the board of directors of Federal Passenger Company, a unit of Russian Railways, recommended paying no final dividends for 2017. The company paid RUB 1.583 bln in interim dividends for January-September 2017. In 2017, the company’s net profit amounted to RUB 7.911 bln, as calculated under Russian Accounting Standards (RAS).

Sollers shareholder decide against dividends for 2017 On May 31, 2018 shareholders of Russian car producer Sollers voted against paying dividends for 2017. The shareholders also decided to keep the profit undistributed. Last time Sollers paid dividends of RUB 1.8 bln, or RUB 52.52 per share, in 2013, due to sound financial results.

Mechel board recommends RUB 2.3 bln on preferred shares in 2017 dividends On May 31, 2018 the board of directors of Russian metals and mining group recommended paying RUB 16.66 per preferred share, or a total of around RUB 2.312 bln, in dividends for 2017, while paying no dividends on common shares. The shareholders will consider the recommendation at an annual general meeting on June 29. The record date is July 18. In 2017, the company’s net profit grew around 60% to RUB 11.557 bln, as calculated under International Financial Reporting Standards (IFRS). Mechel paid RUB 10.28 per preferred share, or a total of RUB 1.426 bln, in dividends for 2016, while no dividends were paid on common shares. Mechel’s the core owner is Igor Zyuzin, chairman of the company’s board of directors, who owns 55.04% common shares.

Polyus shareholders approve RUB 147.12 per share in final dividends for 2017 On May 31, 2018 shareholders of Russian gold producer approved paying final dividends for 2017 at RUB 147.12 per common share. The record date is June 10. The company paid RUB 104.3 per share in interim dividends for January-June 2017.

Russian Agricultural Bank may pay RUB 883.7 mln in dividends for 2017 On June 1, 2018 the supervisory board of state-owned Russian Agricultural Bank recommended paying RUB 2,296 per common and preferred share and RUB 22,961 per type A preferred share, or a total of RUB 883.665 mln, in dividends for 2017. The bank paid RUB 257.5 mln in dividends for 2016.

Transneft may pay RUB 54.9 bln in final dividends for 2017 On June 1, 2018 the board of directors of Russian oil pipeline monopoly Transneft recommended paying RUB 7,578 per common or preferred share, or a total of RUB 54.937 bln, in final dividends for 2017. The company can pay RUB 43.154 bln in dividends on common shares using RUB 24.356 bln from the net profit for 2017 and RUB 18.618 bln from the undistributed net profit for previous years and RUB 11.783 bln on preferred shares using RUB 6.7 bln from the net profit for 2017 and RUB 5.084 bln from the undistributed net profit for previous years. The company’s total dividend payout for 2017 may reach RUB 82.545 bln including interim dividends. The Federal State Property Management Agency is the sole owner of Transneft.

Irkutskenergo owners decide against dividends for 2017 On June 1, 2018 shareholders of Russian power utility decided against dividends for 2017. In 2017, the company’s net profit rose 31.7% to RUB 22.345 bln, as calculated under Russian Accounting Standards (RAS). The company did not pay dividends for 2016 as well. ’s En+ Group holds 90.5% in Irkutskenergo.

Transmashholding may pay RUB 651.6 mln in dividends for 2017 On June 1, 2018 the board of directors of Russian railway equipment producer Transmashholding recommended paying RUB 584.30 per share, or a total of RUB 651.620 mln, in dividends for 2017. The payment accounts for almost 50% of the company’s net profit for the year as calculated under Russian Accounting Standards (RAS). In 2017, the board recommended leaving RUB 1.079 bln RAS net profit for 2016 undistributed. According to company’s materials, The Breakers Investments B.V. is the only shareholder of Transmashholding. Main beneficiaries of The Breakers Investments are France’s Alstom with a 33% stake and businessmen Andrei Bokaryov and .

MMK holders approve paying RUB 0.806 per share in 2017 dividends On June 1, 2018 shareholders of Russia’s Magnitogorsk Iron and Steel Works (MMK) approved paying RUB 0.806 per share in dividends for 2017. In 2017, the company paid RUB 0.869 per share in dividends for January-June and RUB 1.111 per share in dividends for January-September. MMK paid RUB 1.242 per share or RUB 13.879 bln, in final dividends for 2016. Under its dividend policy, MMK earmarks at least 50%

2 of its free cash flow under International Financial Reporting Standards (IFRS) for dividends if its net debt/EBITDA ratio is below 1. Viktor Rashnikov, chairman of the board of directors, is a beneficial owner of 84.3% in the company.

Acron holders approve paying RUB 7.5 bln in 2017 dividends On June 1, 2018 shareholders of Russian fertilizer producer Acron approved paying RUB 185 per share, or a total of RUB 7.499 bln, in dividends for 2017. Acron’s dividend policy envisages paying at least 30% of its net profit calculated under International Financial Reporting Standards (IFRS) in dividends annually. In 2017, Acron’s IFRS net profit dropped 44% to RUB 14.26 bln. In September 2017, Acron’s shareholders approved paying RUB 9.5 bln, or RUB 235 per share, of undistributed profit of previous years in dividends. Businessman Vyacheslav Kantor is the main shareholder of Acron.

NCSP board of directors recommends no dividends for 2017 On June 4, 2018 the board of directors of Russia’s Novorossiysk Commercial Sea Port (NCSP) recommended paying no dividends for 2017. The decision stems from a court order restraining profit distribution. For 2016, NCSP paid RUB 24.994 bln in dividends. The company’s net profit fell 25% on the year to RUB 30.47 bln in 2017, as calculated under Russian accounting Standards (RAS). Summa Group and oil pipeline monopoly Transneft own 50.1% in NCSP on a parity basis.

Enel Russia’s shareholders approve RUB 5.1 bln in dividends for 2017 On June 4, 2018 shareholders of power producer Russia approved paying 14.493 kopecks per share, or a total of RUB 5.127 bln, in dividends for 2017. The record date for the dividends is June 22. Enel Russia paid 6.822 kopecks per share in dividends for 2016. The company’s dividend policy encompasses payment of 65% of its net profit as calculated under International Financial Reporting Standards (IFRS) in dividends in 2018-2020. The net profit of Enel Russia more than doubled on the year to RUB 8.54 bln in 2017.

Sovcomflot may pay RUB 1.696 bln in dividends for 2017 On June 4, 2018 the board of directors of Russian state-owned shipping company Sovcomflot recommended paying RUB 0.86 per share, or a total of RUB 1.696 bln, in final dividends for 2017. The dividend payout accounts for 50% of the company’s net profit for 2017 as calculated under Russian Accounting Standards (RAS). In 2016, Sovcomflot paid RUB 6.141 bln in dividends, which accounted for or 50% of the net profit for the year as calculated under International Financial Reporting Standards (IFRS). The company also paid RUB 829.515 mln in dividends for the year using undistributed profit of previous years.

Uralkali may pay RUB 15 mln in dividends for 2017 on preferred shares On June 4, 2018 the board of directors of Russian fertilizer producer Uralkali recommended paying no dividends on common shares and paying 10 kopecks per preferred share, or a total of no more than RUB 15 mln, in dividends for 2017. The record date for the dividends is preliminarily scheduled for July 10. The company will pay the dividends on preferred shares if the shares are placed before the date of the annual general meeting scheduled for June 29. The purpose of such dividend payment is to maintain the current ratio between the voting and non-voting shares of the company and thus to preserve the current share of voting stocks held by minority shareholders of the company. The company’s board of directors approved issuance of 150 mln preferred shares privately for the owners of the company in November 2017. Uralkali has not paid dividends since 2013.

Kazanorgsintez owners approve dividends for 2017 On June 6, 2018 shareholders of Russian petrochemical company Kazanorgsintez approved paying RUB 4.25 per common share and RUB 0.25 per preferred share in dividends for 2017. According to CEO Farid Minigulov, the company’s net profit fell 16.1% to RUB 15.2 bln in 2017. The company paid RUB 5.07 per common share and RUB 0.25 per preferred share in dividends for 2016. Telecom-Management, a subsidiary of TAIF Group, holds 53.93% in Kazanorgsintez, AK BARS Bank holds 16.11%, and Svyazinvestneftekhim owns 10.55%.

Transmashholding holders approve paying RUB 652 mln in 2017 dividends On June 6, 2018 shareholders of Russian railway equipment producer Transmashholding approved paying RUB 584.30 per share, or a total of RUB 651.620 mln, in dividends for 2017. The company’s net profit stood at RUB 1.322 bln in 2017, as calculated under Russian Accounting Standards (RAS). In 2017, the board recommended leaving RUB 1.079 bln RAS net profit for 2016 undistributed. The Breakers Investments B.V. is the only shareholder of Transmashholding. Main beneficiaries of The Breakers Investments are France’s Alstom with a 33% stake and businessmen Andrei Bokaryov and Iskander Makhmudov.

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TGC-1 holders approve paying RUB 1.888 bln in 2017 dividends On June 7, 2018 shareholders of Russian power producer Territorial Generating Company-1 (TGC-1) approved paying 0.049 kopecks per share, or a total of RUB 1.888 bln, in dividends for 2017. The shareholders also approved allocating RUB 5.01 bln of the 2017 net profit to an accumulation fund and RUB 363.1 mln to a reserve fund. Controlled by Energoholding, TGC-1 paid 0.035 kopecks per share, or a total of RUB 1.331 bln, in dividends for 2016.

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.

For more information kindly contact: Anna Enfiandzhiants Evgeni a Makarova Julia Dombrovskaya T +7 (495) 783 13 91 T +7 (495) 783 13 64 T +7 (495) 783 13 15 F +7 (495) 783 13 89 F +7 (495) 783 13 89 F +7 (495) 783 13 20 E [email protected] E [email protected] E [email protected] This document has been prepared exclusively for internal use of VTB Bank (PJSC) customers. The information should not be further distributed or duplicated in whole or in part by any means without the prior written consent of VTB Bank (PJSC). The information contained herein has been prepared on the basis of information which is either publicly available or obtained from a source which VTB Bank (PJSC) believes to be reliable at the time of publication. Information provided herein may be a summary or translation. The content of the material contained herein is subject to change without notice, and such changes could affect its validity. VTB Bank (PJSC) is not obligated to update the material in light of future events. Furthermore, VTB Bank (PJSC) does not warrant, expressly or implicitly, its veracity, accuracy or completeness. VTB Bank (PJSC) and its affiliates accept no liability whatsoever for any use of this communication or any action taken based on or arising from the material contained herein. Additional information may be available upon request. The material in this communication is for information purposes only. Therefore, this communication should not be interpreted as investment, tax or legal advice by VTB Bank (PJSC) or any of its officers, directors, employees or agents and customers should consult with appropriate professional advisers for these specific matters. Nothing expressed or implied herein is intended to create any obligation of VTB Bank (PJSC) and/or impose any liability on VTB Bank (PJSC) and/or create legal relations between VTB Bank (PJSC) and VTB Bank (PJSC) customers.

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