Page 15 - RusRPTNov20

The offer has already been registered the placement via open subscription of 2.5% with the Central Bank of Russia (CBR). The money raised will be used to buy new land plots and fund the ongoing construction business, the company said in a statement.
The Russian state-owned bank VTB Capital is acting as sole global coordinator and joint bookrunner for the offering, with ​BCS Global Markets​ as joint bookrunner.
Samolet has the largest private land bank among its peer group, which is a key factor in the company’s consistent delivery of outstanding results, according to Elistratov.
Russian companies in general have adopted generous dividend policies as owners have on the whole decided to take the cash rather than invest into the business, due to the uncertain long-term outlook. But in the meantime generous dividends have become a general feature of Russian listed companies as they can see the appeal it has to investors and it has become necessary to invest into a companies equity with dividend payments as a way to counter the traditional perceived “Russia risk.” Samolet will IPO with a new dividend policy that has a fixed minimum payout of RUB5bn ($64mn) annually, the company said. “The policy takes into account the company’s leverage and aims to increase the amount and regularity of payments.
The formula Samolet is proposing to calculate the size of the dividend pay-outs depends on the debt to earnings ratio and proposes to share any profits with the investors once the debt is taken care of.
If the net debt/adjusted EBITDA ratio is below 1, then the dividend payment for the previous financial period would be not less than 50% of net income, in accordance with IFRS. If the net debt/adjusted EBITDA ratio is equal to or above 1 but below 2, then dividend payment would represent not less than 33% of net income. And if the net debt/adjusted EBITDA is equal to or above 2, or if the payment of dividends would result in a breach of covenants under the company’s material undertakings, Samolet may choose not to pay dividends at all other than the guaranteed RUB5bn.
As of June 30, 2020, the Company’ s net debt amounted to RUB13.2bn, up from RUB11.4bn as of December 31, 2019.
Mortgage subsidies driving the sector As ​bne IntelliNews​ reported in an interview with the company, ​Samolet residential real estate business is flying on the back of the state-subsidised mortgage programme. The Kremlin has always been keen to promote home-ownership as it sees it as a “social stabiliser” as well as an effective means of supporting economic growth by indirectly supporting construction. The government’s scheme has brought the effective interest rates down to 6.5% for would be home-owners vs the central bank’s 4.5% prime rate and the programme has just been extended into 2021. The economic uncertainty caused by the multiple crises and the threat of new sanctions last led Russians to put their cash into property as a value store and the share of mortgage funder transactions has soared as a result.
15 ​RUSSIA Country Report​ November 2020 www.intellinews.com