Page 77 - bne IntelliNews Russia Country report May 2017

Mosenergo's balance sheet, as free cash flow [FCF] would be either reinvested into the aging fleet or paid out in dividends, Interfax also reported. VTB Capital estimated on May 31 that if 100% of FCF or about RUB22bn goes to dividends, the dividend per share would be RUB0.54 giving a dividend yield of 23% in 2017-18F. The bank believes that out of a possible 23% dividend yield for 2017-18F, from 5-10% could go into capital expenditure. VTB Capital also reminded that from 2019 Mosenergo's FCF is set to drop from about RUB22bn in 2017 to about RUB16bn, "leaving less room for dividends in light of the possible capex needs".
The board of Russian oil company Bashneft has recommended that the annual general meeting withholds any dividends on common shares and declares dividends of RUB100 ($1.77) per preferred share, paying a total of RUB3bn in dividends for 2016, Interfax reported on May 25. Bashneft, in which Rosneft acquired a controlling stake last October, is reportedly postponing dividend payments for last year until the end of 2017. This is due to increased capex for recovery of the economic potential of refining facilities following an accident at the company's hydrocracking unit in the summer of 2016, as well as to enhance health safety and environment (HSE) at its refineries in 2017.
The private Russian oil company RussNeft will not pay dividends on ordinary shares freefloated in Moscow , the company said on May 29. The board of RussNeft recommends paying a total of about $40mn for 2016 for preferred shares only, held by structures affiliated with billionaire Mikhail Gutseriev. About 60% of the company is held by the Gutseriev family, 25% by Glencore oil trader, and 15% are in the free float. The company will revise the dividend policy and might increase the payout to at least 50% of net profit on preferred shares, Reuters reported on May 26, citing unnamed sources close to the company. Previously Gutseriev assumed that RussNeft could start paying dividends to investors starting from 2018, Reuters reminds. Gutseriev, 58, is worth an estimated $6.7bn and raked in $500m from the successful IPO of RussNeft in November 2016. Since the IPO on Moscow Exchange, the transparency and disclosure standards of the company have improved, Moody’s Investors Service said in April .
8.3.2 ECM news
Heads of Russian state and private oil companies Surgutneftegas, Transneft, Tatneft, Lukoil, and the Rostec state technology agency have asked President Vladimir Putin to agree to limiting information that is legally available to different types of shareholders, Vedomosti reported on May 29, citing unnamed officials and a letter sent to the Kremlin chief in April. Currently the law does not discriminate in terms of available information between minority shareholders and strategic investors, which fosters conflicts, the head of oil majors argue. They reportedly urged to establish a “just balance between availability of information and the guaranties and information security of Russian corporations” by amending the limited liability companies law. The companies seek to limit the access to any internal documents apart from registration documents, charter, annual reports, lists of affiliated entities, shareholder agreements, and others.
Etalon Group conducts SPO at $3.58 per GDR, placing 36.9mn GDR.
Etalon stakeholders Baring Vostok and the Zarenkov Family propose placing around 36.9mn GDRs in the form of an accelerated book building. The sales split will be approximately 50% each. There is a 180-day lock-up period after the placement. T he size of the placement is $140mn (12.5% of total capital). After the placement, the company's free float will increase to 53.5%. We like Etalon and think that it might be an attractive buying opportunity at the
77 RUSSIA Country Report May 2017 www.intellinews.com