SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody October 24, 2019 Issue No. 2019/40 Company News German ruler clears Freight One to buy 50% in TransContainer On October 18, 2019 it was reported that the Federal Cartel Office of Germany cleared rail cargo operator Freight One, part of businessman Vladimir Lisin’s Fletcher Group, to buy a 50% plus two shares stake in container shipping company TransContainer. The company attained a permit for the deal from the Russian antitrust on October 11. An auction for a controlling stake in TransContainer belonging to Russian Railways is scheduled for November 27, with a starting price of RUB 36.159 bln. VTB Capital is the organizer. Bids are accepted from August 8 until November 15. A competitor for the stake must make RUB 3.616 bln initial payment. Several companies, including Freight One and Yenisei Capital expressed interest in the stake in TransContainer. Yenisei Capital affiliated with co-owners of Evraz Alexander Abramov and tycoon Roman Abramovich already holds 24.5051% in TransContainer. Uralkali to mull merger with unit, cancelation of treasury shares On October 21, 2019 it was announced that Russian fertilizer producer Uralkali scheduled an extraordinary general meeting of shareholders for December 4 to discuss a merger of the company with subsidiary Uralkali-Technology and cancelation of a quasi-treasury stake owned by the subsidiary. During the merger of the company with Uralkali, company’s own shares owned by the company will be canceled, the shares of the company owned by Uralkali will be canceled, and the shares of Uralkali owned by the company will be canceled. The shareholders that disagree with the reorganization or the shareholders that won’t vote at the meeting will be able to submit their shares for a buyback. Uralkali will buy back the shares at RUB 118.21 per common share and RUB 102.29 per preferred share. According to the materials of the company as of October 20, 2017, Uralkali’s core owners were fertilizer producer UralChem with a 20% stake, Rinsoco Trading Co. Limited with a 20% stake, while quasi-treasury shares accounted for 54.77% of the equity and 5.23% was free-float. Amur Shipbuilding Plant starts RUB 11 bln additional share issue On October 21, 2019 it was announced that Russia’s Amur Shipbuilding Plant, part of United Shipbuilding Corporation (USC), started to issue RUB 11 bln of shares for USC. In August, the Industry and Trade Ministry asked the government for capital injections into Amur Shipbuilding Plant and Khabarovsky Shipbuilding Plant, another subsidiary of USC. Kommersant business daily reported that the ministry asked for RUB 7.1 bln for the Amur shipyard and RUB 1.5 bln for the Khabarovsk one. But the Finance Ministry opposed the proposal and did not include the injections in the 2020–2022 budget draft. USC also said in October that the capital injections wouldn’t be enough to solve financial problems of the plants, which they would need subsidies amounting to 15–20% of a price of each contract. Owners vote to reregister Lenta in Cyprus from Virgin Islands On October 22, 2019 it was stated that the shareholders of Russian retailer Lenta approved reregistration of the company in Cyprus from the British Virgin Islands. The headquarters of the company will be relocated to the city of Limassol and the name will be changed for Lenta PLC. Russian Railways’ unit Gefco not to float shares in 2019 On October 23, 2019 Luc Nadal, Chairman of the board of directors of France’s logistic group Gefco, 75% owned by Russian Railways and 25% by Peugeot-Citroen (PSA), said that the company had no plans to hold initial public offering (IPO) until the end of 2019. He mentioned that the company launched all internal 1 procedures to take Gefco to the IPO on request by its shareholders, Russian Railways and PSA, in 2018D The staff met with investors to present the project at the beginning of the year. .ut investors think that the car (market) is at a high point and they do not understand really well why the company would hold an IPO. Be said that the shareholders decided to return to consideration of the issue when market conditions change. Dividends/coupons Severstal may pay RUB 27.47 per share in dividends for July–September 2019 On October 1,, 2019 the board of directors of Russian steelmaker 2everstal recommended paying R-. 2,.7, per share, or a total of about R-. 23 bln, in dividends for EulyA2eptember. The shareholders will discuss the recommendation at an e4traordinary general meeting scheduled for November 22. The record date for the dividends is 8ecember 3. Previously, the company paid R-. 77.39 per share in dividends for EulyA2eptember 2018. 2everstal also paid R-. 35.73 per share or R-. 29.08 bln in dividends for EanuaryA March, and R-. 20.,2 per share or around R-. 22.387 bln in dividends for AprilAEune. The core owner of 2everstal is tycoon Ale4ei Mordashov with a stake of ,,.02%. Vice President says Evraz plans no changes to its dividend policy On October 18, 2019 Nikolai Ivanov, ice President for Finance at -.K.5based mining giant Evra1, which operates mainly in Russia, stated that the company had no plans to change its dividend policy. -nder the company"s dividend policy, it pays at least -28 300 mln in dividends per year if its ratio of net debt to earnings before interest, ta4es, depreciation, and amorti1ation (E.IT8A) stands below 34. In the materials for its investor day, the company said it had planned to maintain net debt below -28 7 bln and the net debt to E.IT8A ratio below 24. In EanuaryAEune 2019, net debt of Evra1 stood at -28 3.05 bln, with the ratio amounting to 1.14. Roman Abramovich holds 28.,,% voting shares in Evra1, while his partners Ale4ander Abramov and Ale4ander Frolov have 19.71% and 9.09%, respectively. Domodedovo to pay RUB 1.3 bln in dividends for January–June 2019 On October 18, 2019 it was reported that Russia"s 8omodedovo International Airport would pay R-. 1.25, bln, or 22.5% of the net profit, in dividends for EanuaryAEune. CEO says VTB board decides against paying interim dividends On October 23, 2019 Andrei Kostin, CEO of Russia"s second largest lender T., stated that the bank"s supervisory board turned down a proposal to pay interim dividends at the latest meeting. Kostin also said that the bank would actively return to the issue in the future. NLMK may pay RUB 3.22 per share in dividends for July–September 2019 On October 27, 2019 the board of directors of Russian steelmaker Novolipetsk 2teel (NLMK) recommended paying R-. 3.22 per share, or a total of R-. 19.298 bln, in dividends for EulyA2eptember. The shareholders will discuss the recommendation at an e4traordinary general meeting on 8ecember 20, the register for which closes on November 25. The record date for the dividends is Eanuary 9. The dividend payment accounts for 120% of the company"s free5cash flow in the period. Previously, NLMK paid R-. 0.07 per share in dividends for EulyA2eptember 2018. In 2019, the company paid R-. 3.08 per share, or a total of around R-. 22.00 bln, in dividends for AprilAEune, and R-. ,.37 per share or R-. 73.99 bln in dividends for EanuaryAMarch. ladimir Lisin holds around 81.7% in NLMK through Fletcher Group. Eurobonds / DRs Home Credit Bank plans road show of perpetual Eurobonds On October 21, 2019 a banking source stated that Russia"s Bome Credit .ank planned to hold a road show of perpetual Eurobonds in Moscow, Furich, and London from October 27 through October 29. 8epending on market conditions, the bank may offer Eurobonds with a call option in five years in order to replenish its tier51 capital. Alfa5.ank, .C2 Global Markets, E.P. Morgan, Renaissance Capital, -.2, and T. Capital will act as the organi1ers. Demand for Russia’s Norilsk Nickel Eurobonds exceeds USD 2 bln On October 22, 2019 Andrei 2olovyov, director of the fi4ed5capital market department of placement organi1er T. Capital, stated that investor demand for 55year Eurobonds of Russian metals giant Norilsk Nickel amounted to more than -28 2 bln. The company sold -28 ,50 mln Eurobonds at 3.3,5% on October 21. The initial guidance amounted to 3.025% and was lowered to 3.3A3.3,5% earlier in the day. A roadshow for the Eurobonds was held in Frankfurt, London, and New 3ork on October 10A18. Citi, E.P. Morgan, 2ociete Generale, Ga1prombank, ING, 2berbank CI. and T. Capital are the organi1ers. 2 TCS Group to offer GDRs on Moscow Exchange from October 28, 2019 On October 23, 2019 it was reported that Russia"s TC2 Group, which includes Tinkoff .ank and Tinkoff Insurance, listed its global depositary receipts (G8Rs) on the Moscow E4change, trading in the securities would begin on October 28. This listing is a secondary listing of the company"s G8Rs which have already been trading on the London 2tock E4change A neither TC2 Group Bolding, nor its e4isting shareholders sell the company"s G8Rs in connection with their listing on Moscow E4change. This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities of TC2 Group Bolding. Tinkoff G8Rs will be denominated in rubles and available under the TC2G ticker. 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.