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Presented by: VTB Bank, Custody

September 19, 2019 Issue No. 2019/35

Company News

LSR Group to offer over RUB 5 bln non-convertible bonds late September 2019 On September 13, 2019 a banking source said that Russian real estate developer LSR Group planned to offer at least RUB 5 bln of non-convertible bonds in late September. The interest rate for the circulation period will be defined after the book building ends, and the placement was preliminary scheduled for early October. Afla-Bank, Credit bank of , Otkritie Financial Corporation Bank, Russian Agricultural Bank, and Sovcombank will act as the organizers of the placement.

Polymetal issues RUB 4.3 mln new shares under option program On September 16, 2019 it was reported that Russian precious metals producer issued RUB 4.3 mln of new shares under a long-term option program. The company issued 4,797 common shares with no face value, intended for certain persons discharging managerial responsibilities. The shares are to be listed on the London Stock Exchange from September 17.

MGTS General Director Kuznetsov becomes MTS vice president On September 17, 2019 it was announced that the board of directors of Moscow City Telephone Network (MGTS), a fixed line unit of mobile operator MTS, prematurely terminated powers of General Director Pavel Kuznetsov and appointed him at this position in conjunction for three years. From September 16, 2019 Pavel Kuznetsov will fulfill the two positions, a vice president, who is director of the Moscow area of MTS, and general director of MGTS. The new appointment is explained by a functional merger of MGTS and MTS on the Moscow telecom market. The decision will make it possible to create one of the strongest teams to implement projects in the field of high technologies and digital services on the most important market for MTS, which is Moscow.

Court delays suit over Orient Express Bank share issue till October 3, 2019 On September 17, 2019 it was reported that the Arbitration Court of the Amur Region delayed until October 3 hearings of a lawsuit of Artyom Avetisyan’s Finvision against Orient Express Bank seeking to void some decisions of the bank’s board of directors on offering of 500 bln new shares with a face value of 1 kopeck apiece, and the offering itself due to the necessity of making an appraisal expertise. The hearing was postponed due to the need to get acquainted with the candidates for a judicial assessment of the value of the bank’s shares, who were provided by Cyprus-based Evison Holdings of investment fund Baring Vostok. Evison is taking participation in the process as a third party. Evison’s lawyer Pavel Darnitsyn said in the court that his client suspects that Finvision of Artyom Avetisyan plans to use an expert with insufficient competence in the assessment.

Sistema launches RUB 3 bln buyback program On September 17, 2019 Russian multi-industry holding launched RUB 3 bln buyback program using own funds. The program envisages buying back up to 300 mln common shares of the company until February 29, 2020. The shares will be used for corporate purposes including management incentive programs.

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ALROSA’s supervisory board to mull acquisition of Kristall September 24, 2019 On September 17, 2019 it was stated that the supervisory board of Russian diamond producer ALROSA would consider acquisition of a 100% stake in diamond cutter Kristall from the Federal State Property Management Agency on September 24. An independent assessor appraised the company at RUB 1.886 bln. If the deal is approved, the management team of ALROSA will prepare a development plan for Kristall until the end of 2019, and the deal will be signed until the end of September.

Igor Tonkovidov appointed as Sovcomflot director general On September 18, 2019 Deputy Prime Minister Maxim Akimov signed an order on early resignation of Sergei Frank from the position of director general of Russian shipping company Sovcomflot, wholly owned by the state, and appointed chief engineer Igor Tonkovidov to replace him. Earlier in September, business daily Kommersant reported that Frank could leave the office to become the chairman of Sovcomflot’s board of directors.

Surgutneftegas CEO denies buyback information On September 18, 2019 Vladimir Bogdanov, CEO of Russian oil company , said that the company did not consider a buyback of shares. Earlier in September, some media reported that Surgutneftegas planned a buyback after the company had registered an investment subsidiary. The stock jumped around 20% since then.

Dividends/coupons VTB Bank supervisory boards doesn’t mull interim dividends On September 12, 2019 Alexei Moiseyev, Deputy Finance Minister, stated that the supervisory board of Russia’s second largest lender VTB Bank had not received written proposals on paying interim dividends for 2019. The board is chaired by Finance Minister Anton Siluanov. Earlier in September, Otkritie Financial Corporation (FC) Bank CEO Mikhail Zadornov said that representatives of his bank, who are members of VTB Bank’s supervisory board, would put a question about payment of interim dividends in the autumn.

Tatneft to pay RUB 40.11 per share in dividends for January–June 2019 On September 16, 2019 shareholders of Russian oil company approved paying RUB 40.11 per common and preferred shares in dividends for January–June. The record date is September 27. The company’s net profit fell 0.6% on the year to RUB 93.312 bln in January–June, as calculated under Russian Accounting Standards (RAS). For 2018, Tatneft paid RUB 84.9 per preferred and common shares, which accounted for 100% of the RAS net profit.

Metalloinvest to pay RUB 0.14 per share in dividends for January–June 2019 On September 16, 2019 it was reported that Russian metals holding Metalloinvest would pay RUB 0.1402 per share, or about RUB 10.5 bln, in dividends for January–June. Metalloinvest paid RUB 0.0401 per share in dividends for January–June 2018. USM Holdings, the major shareholder of which is tycoon Alisher Usmanov, holds 100% in Metalloinvest.

Sovcombank shareholders approve paying RUB 2.3 bln in dividends On September 18, 2019 shareholders of Russia’s Sovcombank approved paying RUB 2.3 bln from undistributed profit of 2015 in dividends on common shares. The payment will amount to RUB 0.1168 per common share. The record date is September 26, and the payment will be performed until October 8.

Dorogobuzh holders approve paying RUB 4.55 bln in dividends On September 19, 2019 shareholders of Russian mineral fertilizer producer Dorogobuzh, part of Vyacheslav Kantor’s Acron group, voted for payment of RUB 5.2 per share, or RUB 4.552 bln, in dividends from undistributed profit of previous years. The record date was set for September 30.

Eurobonds / DRs ChelPipe offering debut USD 300 mln Eurobonds with 4.5% yield On September 12, 2019 a banking source said that Russia’s Chelyabinsk Pipe Plant, or ChelPipe, would offer debut USD 300 mln Eurobonds with an annual yield of 4.5%. The initial yield guidance was set at 4.75– 5% annually. Demand has surpassed USD 1 bln. On September 5, the company met with investors in Europe and the U.S. to discuss the future Eurobond placement. Citi, Gazprombank, J.P. Morgan, Societe Generale and Renaissance Capital are the organizers.

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Investors buy 41% of Sibur Eurobond issue On September 17, 2019 Denis Shulakov, first vice president of Gazprombank, which acted as an organizer of the placement, stated that Russian investors have bought 41% of the latest Eurobond issue of petrochemical giant Sibur. The bid book saw USD 1.35 at the peak. The final book contains 86 investor bids worth USD 1 bln. European investors bought 26% of the issue, investors from North Africa, Middle East and Asia 15%, from U.K. 11%, from U.S. 7%. On September 16, Sibur offered 5-year U.S. dollar-denominated Eurobonds for USD 500 mln at a yield of 3.45% annually. Gazprombank, Goldman Sachs, J.P. Morgan, and Sberbank CIB acted as organizers.

Sovcombank to hold road shows for dollar Eurobonds September 18-26, 2019 On September 17, 2019 a banking source said that Russia’s Sovcombank would hold meeting with investors, devoted to the possible offering of subordinated U.S. dollar-denominated Eurobonds, from September 18 through September 26. The road shows will take place in Moscow, Europe and the U.S. Citi, J.P. Morgan, UBS, Gazprombank, Sberbank CIB and VTB Capital are the organizers.

STLC to hold road shows for dollar Eurobonds from September 23, 2019 On September 18, 2019 a banking source stated that Russia’s State Transport Leasing Company (STLC) would hold meetings with investors from September 23 devoted to a possible offering of U.S. dollar- denominated Eurobonds maturing in six to seven years. The road shows will be held in London, Zurich and Frankfurt. Gazprombank, J.P. Morgan, Renaissance Capital and VTB Capital are the organizers.

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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