SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody April 8, 2021 Issue No. 2021/13 Market News Finance Ministry places RUB 54.7 bln of OFZ bonds at auction On April 7, 2021 it was stated that Russia’s Finance Ministry had placed RUB 54.688 bln of OFZ 26235 government bonds with fixed coupon, maturing in March 2031, at an auction on April 7. The cut-off price amounted to 90.9814% of a face value and the weighted average price to 91.0614%. The cut-off yield stood at 7.31% annually and the weighted average yield at 7.30% annually. Demand totaled RUB 73.408 bln. Company News Region Group buys 100% in private pension fund Safmar On April 2, 2021 it was stated that investment company Leningrad Adagio of Region Group’s majority owner Sergei Sudarikov, had bought 100% in private pension fund Safmar. In March the pension fund’s owner Safmar Financial Investments said that Region planned to buy the fund for RUB 20–24 bln. The Federal Antimonopoly Service gave its permission on March 9. Safmar is Russia’s largest private pension fund with assets exceeding RUB 270 bln and the amount of clients under a mandatory pension insurance program standing at 3.8 mln people. Legenda sets RUB 4 bln bond coupon guidance at 9.95% On April 2, 2021 it was reported that Russian real estate developer Legenda had set the final guidance for the first coupon of RUB 4 bln 4-year bonds at 9.95% annually. Bids were accepted from March 22 until April 2 and the technical placement took place on April 6. The issue carries quarterly coupons and shall be redeemed in amortizing parts. Alfa-Bank, Aton, SKB-Bank, Sovcombank and Expobank are the organizers. Alfa-Bank to offer 3-year exchange bonds on Apr 9–14 On April 2, 2021 it was reported that Russia’s Alfa-Bank plans to collect bids for 3-year exchange bonds from April 9 through April 14. The potential amount of the issue will be defined after bookbuilding. The first coupon rate’s guidance is 6.60–6.80% annually, which corresponds to a yield to maturity of 6.71–6.92% annually. The issue carries semiannual coupons. The bank will organize the placement on its own, the technical placement is scheduled for April 16. MTS’ unit Bastion buys back 0.02% of shares for management On April 2, 2021 it was stated that Bastion, a wholly-owned subsidiary of major Russian mobile operator MTS, had acquired 430,000 ordinary shares of the parent company, or 0.02% of the share capital. The shares were acquired for MTS’ long-term incentive program for senior management. Rosgeo may delay bond offerings due to tough market situation On April 5, 2021 CEO of Russian state geological exploration company Rosgeo Sergei Gorkov told reporters in a news briefing that the company may delay its debut bond offerings until September–November from the end of May as the current market situation is tough. The CEO added that the company still planned to offer 3- year bonds in 2021. Gorkov said that Rosgeo wanted to spend the money on investment program until 2025 and refinancing of current debt. He also mentioned that the company planned to do geologic exploration on the shelf of Vietnam in 2021, and finish seismic exploration on the shelf of India ahead of schedule. 1 AliExpress Russia potentially ready for IPO, holders to decide On April 7, 2021it was reported that AliExpress Russia may hold an initial public offering (IPO) if the company’s shareholders decide on the move. It was added that the IPO may be held next year or later. AliExpress Russia is a joint venture of Chinese giant Alibaba Group, the Russian Direct Investment Fund, Internet company Mail.ru Group, and mobile operator MegaFon. MTS approves buying shares for RUB 3.2 bln from opposing holders On April 7, 2021 it was disclosed that Major Russian mobile operator MTS had approved purchasing 9.8 mln shares for RUB 3.2 bln from the shareholders opposing the company’s reorganization. An MTS spokesperson said the final settlements will be done by May 1. MTS said in December 2020 that it would buy back shares from the shareholders who would vote against or would not vote at all about the company’s reorganization at a price of RUB 328.18 per ordinary share. The reorganization was about the incorporation by the company of some of its units. Sovcombank closes deal to buy Orient Express Bank, to boost capital On April 8, 2021 it was stated that Russia’s Sovcombank had closed a deal to buy shares in Orient Express Bank from its key shareholders - Baring Vostok funds, Finvision company and Sherzod Yusupov, and plans to inject RUB 7 bln into the bank’s capital using its own funds. Globaltruck unit buys back 56,990 shares in parent firm in March On April 8, 2021 it was stated that Globaltruck Logistic, a subsidiary of Russian cargo carrier Globaltruck, had bought back 56,990 shares in the parent company in March, which amounts to 0.1% of the parent company’s shareholder equity. The RUB 386 mln buyback program has been in force since November 11, 2019 and will last until May 31, 2021 or until the limit is reached in price or the amount of shares. Under the program, the company buys its shares at no more than RUB 132 per security. Segezha Group can announce IPO next week On April 8, 2021 it was reported that timber holding Segezha Group can announce an initial public offering (IPO) on the Moscow Exchange next week. Parent holding Sistema said in January that Segezha Group planned to hold an IPO in 2021 if market conditions are favorable. Media reported that Segezha Group planned to attract USD 400–500 mln. Safmar Financial Investments buys 7.8% in RussNeft On April 8, 2021 it was disclosed that Russia’s Safmar Financial Investments had acquired a 7.8% stake in oil company RussNeft as a result of several market deals signed between April 1 and April 6. The holding did not have a stake in RussNeft before. The shares were bought from several large minority holders of RussNeft who agreed to sell their stakes. The sellers were not disclosed. Government proposes Deputy Energy Minister Sorokin to Transneft board On April 8, 2021 it was stated that the Russian government had proposed Deputy Energy Minister Pavel Sorokin as a candidate for the board of directors of oil pipeline monopoly Transneft. Sorokin is the only new candidate as other candidates proposed by the government are already in Transneft’s board of directors. Dividends PIK Group can pay RUB 22.51 per share in dividends for 2020, RUB 22.92 for January–March 2021 On April 5, 2021 it was stated that the board of directors of Russian developer PIK Group had recommended paying RUB 22.51 per share in dividends for 2020. The board also recommended paying RUB 22.92 per share, or a total of RUB 15.14 bln in dividends for January–March 2021. The shareholders will consider the recommendations at an annual general meeting scheduled for May 7. The record date is May 17. M.Video board recommends paying RUB 38 per share in 2020 dividends On April 5, 2021 it was reported that the board of directors of Russian electronic goods and household appliances retailer M.Video had recommended paying RUB 38 per share in dividends for 2020. The board had recommended spending the entire 2020 net profit of RUB 4.9 bln and undisbursed net profit of previous years in the amount of RUB 1.9 bln on the dividend payment. The shareholders will consider the recommendation at an annual general meeting on May 7. The register for the meeting will close on April 13. The company is controlled by Mikhail Gutseriyev’s Safmar group. 2 Lenta’s board of directors recommends no dividends for 2020 On April 6, 2021 it was reported that the board of directors of Russian grocery retailer Lenta had recommended paying no final dividends for 2020. The shareholders will consider the recommendation at an annual general meeting scheduled for June 10. The register for the meeting closes on May 16. In February, the company finished re-domiciliation from Cyprus to the special administrative zone in the Oktyabrsky Island of the Kaliningrad Region. In November 2020, the shareholders of Lenta approved a new edition of the company’s charter and conversion of the shareholder equity into rubles, and the new charter includes an article on dividend payments. The company is allowed to decide on dividends payments for a first quarter, for a half a year, for nine months, or for a full year, and it may use its net profit calculated either under International Financial Reporting Standards (IFRS) or Russian Accounting Standards (RAS) as the basis for dividends. In mid-March 2021, CFO Rud Pedersen said that the company might start paying dividends in 2022. Severgroup of Russian tycoon Alexei Mordashov owns 77.99% in Lenta. TransContainer may pay RUB 3 bln in final dividends for 2020 On April 6, 2021 it was stated that the board of directors of Russia’s leading railway container operator TransContainer had recommended paying RUB 215.91 per ordinary share, or a total of RUB 3 bln, in final dividends for 2020. Delo Group is the only shareholder of TransContainer. In December 2020, TransContainer paid RUB 39.823 bln in dividends to Delo for January–September 2020 and for previous years.