SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody July 5, 2018 Issue No. 2018/24 Company News MTS owners elect board, nod to pay bonuses to management with shares On June 28, 2018 shareholders of major Russian mobile operator MTS elected the board of directors, changing its three members, and decided to pay remuneration to the board with stock instead of cash. The new members on the board are MTS President Alexei Kornya, who headed the company in March, Alexei Katkov, a managing partner at Sistema, MTS’ main shareholder, and independent director Wolfgang Schussel. MTS’ shareholders also approved a new wording of a statement on remuneration of the board members, which stipulates payments in shares, not in money. The board members will not sell the shares for three years. TGC-2 can buy Quadra for RUB 18 bln in September-October 2018 On June 29, 2018 it was reported that Russian power producer Territorial Generating Company-2 (TGC-2) was making due diligence of Quadra to buy it from Onexim of Mikhail Prokhorov in September-October for RUB 18 bln. Onexim bought 48.6% in Quadra, then known as TGC-4, in 2008 during a split of RAO UES of Russia, for RUB 26 bln. Onexim’s stake grew to 49.99% after that. Businessinform of Prokhorov owns 24.74% in the power producer and brokerage company Region 6.4%. A source said that TGC-2 plans to spin off some Quadra assets after the purchase, leaving only generation. Global Ports says appoints Delo Group’s Bychkov as new CEO On June 29, 2018 it was announced that Russian container terminal operator Global Ports appointed Vladimir Bychkov, an executive of one of companies of businessman Sergei Shishkaryov’s Delo Group, as CEO starting from July 16. Current CEO of the company Mikhail Loganov will stay and act as an adviser to Bychkov during a transition period until September 30. Bychkov has been the CEO of Ruscon, a key transport and logistics asset of Delo Group, since 2010. Delo Group acquired a 30.75% stake in Global Ports from founders Nikita Mishin, Konstantin Nikolayev and Andrei Filatov in April. FGC UES board approves selling 10% in Inter RAO On June 29, 2018 the board of directors of Russia’s Federal Grid Company of Unified Energy Systems (FGC UES) approved selling 10% of its 18.57% stake in power holding Inter RAO. Rosseti, which controls FGC UES, said the stake could be sold at a price of RUB 3,3463 per share, but not below the market value defined by an independent appraiser. Uralkali board of directors reelects Rostec CEO as chairman On July 3, 2018 the board of directors of Russian fertilizer producer Uralkali reelected CEO of state industrial holding Rostec Sergei Chemezov as the chairman. Chemezov has been working in the position since 2014. TGC-1 board of directors reelects Seleznyov as chairman On July 3, 2018 the board of directors of Russian power producer Territorial Generating Company-1 (TGC-1) reelected a top manager of gas giant Gazprom Kirill Seleznyov as the chairman. Denis Fyodorov, CEO of Gazprom Energoholding, was appointed deputy chairman of the board. Bank Trust says merger with Rost Bank completed On July 3, 2018 it was reported that the legal procedure of a merger of Russia’s Rost Bank with National Bank Trust was over. Bank Trust has become a legal successor to Rost Bank, and it will fulfill all liabilities 1 and requirements under Rost Bank’s contracts with its clients. Central Bank Deputy Chairman Vasily Pozdyshev said in early April that a bank of bad and non-core assets will be created on the basis of Bank Trust and will comprise assets of Rost Bank, Avtovazbank and Promsvyazbank. RusHydro board agrees to sell 4.9% in InterRAO at RUB 3.3463 per share On July 3, 2018 the board of directors of Russian hydropower company RusHydro approved the sale of a 4.915% stake in power producer Inter RAO to Inter RAO Capital for RUB 3.3463 per share. In May, media reported that Inter RAO may buy back 23.5% in the company from Federal Grid Company of Unified Energy Systems (FGC UES) and RusHydro for up to RUB 100 bln, but Inter RAO denied it. FGC UES CEO Andrei Murov said at the end of June that the company would sell some of its 18.57% stake in Inter RAO. An Inter RAO spokesperson said that the company does not have to announce a buyout offer after the purchase of the FGC UES stake. Sberbank to offer RUB 1 bln 3.5-year structured bonds on July 19, 2018 On July 4, 2018 it was reported that Russia’s top bank Sberbank plans to offer RUB 1 bln 3.5-year structured bonds on July 19. The bank will offer the bonds at 103% of a face value publicly. In late June, the bank sold RUB 657.5 mln out of RUB 3 bln issue of structured exchange bonds linked to the price of the bank’s global depositary receipts (GDR). Dividends/coupons Surgutneftegas owners approve RUB 1.38 per preferred share in dividends for 2017 On June 29, 2018 shareholders of Russian oil and gas company Surgutneftegas approved paying RUB 0.65 per common share and RUB 1.38 per preferred share, or a total of RUB 33.851 bln, in dividends for 2018. The record date for the dividends is July 19. For 2016, the company paid RUB 0.60 per common and preferred share, or a total of RUB 26.507 bln, in dividends. Surgutneftegas’ charter capital amounts to RUB 43.428 bln and is split into 35.726 bln common shares and 7.702 bln preferred shares. T Plus shareholders approve paying RUB 2.9 bln in dividends for 2017 On June 29, 2018 shareholders of Russian power utility T Plus, part of Renova group of businessman Viktor Vekselberg, approved allocating RUB 2.9 bln, or 6.56 kopecks per common share, to dividends for 2017. The record date is July 12. The company paid no dividends for 2015 and 2016. Rosseti to pay no dividends for 2017, RUB 2.5 bln for January-March 2018 On June 29, 2018 shareholders of state-controlled power grid holding Rosseti approved paying no dividends for 2017 due to RUB 13.2 bln net loss and paying RUB 2.468 bln in dividends for January-March of this year. The dividends for January-March will amount to 1.1965 kopecks per common share and 4.287 kopecks per preferred share. The company’s net profit stood at RUB 21.5 bln in the period compared to a net loss of RUB 24.5 bln in January-March 2017, as calculated under Russian Accounting Standards. Rosseti did not pay dividends for 2013-2015, but paid RUB 1.79 bln for January-March 2016 and a total of RUB 3.785 bln for 2016. Russian unit of Fortum to pay RUB 12.2 bln debut dividends for 2017 On June 29, 2018 it was reported that Fortum, part of the Russian business of Finland’s power producer Fortum, would pay debut dividends for 2017, amounting to RUB 12.2 bln, or RUB 13.86 per common share. The record date is July 9. Gazprom holders approve paying RUB 190 bln in 2017 dividends On June 29, 2018 shareholders of Russian gas giant Gazprom approved paying RUB 8.04 per share, or a total of RUB 190.335 bln, in dividends for 2017. The payment will account for 26.6% of the company’s net profit calculated under International Financial Reporting Standards (IFRS). Gazprom’s dividends for 2016 amounted to RUB 190.327 bln, or 20% of the IFRS net profit for the year. Mechel holders approve paying RUB 2.3 bln on preferred shares in 2017 dividends On June 29, 2018 shareholders of Russian metals and mining group Mechel approved 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. 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. 2 Sovcomflot to pay RUB 1.7 bln in dividends for 2017 On July 2, 2018 shareholders of Russian state-owned shipping company Sovcomflot approved payment of RUB 1.7 bln in 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. M.Video shareholders decide against dividends for 2017 On July 2, 2018 it was announced that shareholders of Russian electronic goods and household appliances retailer M.Video decided against payment of dividends for 2017. The company paid RUB 4.854 bln in dividends for 2014 and RUB 3.595 bln for 2015; it paid no dividends for 2016. President Alexander Tynkovan said in March that the company might again discuss the dividend payments in around 18 months after RUB 45.5 bln deal to buy retail chain Eldorado from M.Video’s parent company Safmar.