Page 76 - RusRPTJul19

fall of the Soviet Union.
Russian banking group TCS Group successfully placed 16.7mn GDRs
(Class A shares, or 9% of the total amount) at $18.0/GDR (only a 2% discount to Wednesday’s closing price) and raised $300mn in an SPO on June 27, with management claiming high book oversubscription. The lock-up period for any of TCS's shares and GDRs held directly or indirectly by Oleg Tinkov or by the Group is YE19, subject to the customary exceptions. As a result of the SPO, the share of Oleg Tinkov in the total capital (economic rights) is to decline to 40.4% vs. the current 43.8%, though he will still have more than 80% voting rights.
Karyo Holdings, a company belonging to Mikhail Prokhorov, has sold its entire 15.625% stake in OR, the parent company of Russia’s shoe retailer Obuv Rossii Group, the company said in a statement on Wednesday. The company owned 727 stores as of the end of 2018. Anton Titov holds a 50% stake in OR.
Russian online media major Rambler controlled by Alexander Mamut is considering holding an IPO, RBC business daily reported citing the head of the company Raphael Abramyan, who sees the company listed in two-three years. In April Russia's largest bank Sberbank acquired 46.5% in Rambler Group and said it would invest in the media holding. Most recently the bank said that it will promote online cinema Okko in its branches, and will grant Rambler Group access to acquiring and ID systems of its client base.
TMK’s European division SPO postponed. TMK postponed 59.4% SPO of TMK-Artrom, due to the company’s lower than expected valuation, according to TMK Deputy Director for Development and Strategy Shmatovich. He stressed that TMK does not plan to sell the European asset and will keep the controlling stake. In the beginning of May, TMK announced the postponement of TMK-Artrom’s 59.4% SPO due to “market conditions”. The postponement was already announced beg-May and the latest comments provided no new details. The SPO was expected to have a limited effect on TMK’s debt, while ownership in Artrom would have declined from 93% to 59%.
The shares of Russian independent oil major Lukoil made it to the global top 10 of 2019 Value Creators Rankings by the Boston Consulting Group (BCG), bringing investors returns of 27.1% for the period of 2014 to 2018. Three Russian companies made it to the top 50, with another private gas company Novatek (23.5% return) and Russia's largest bank state-controlled Sberbank (16.6%). The rankings are headed by Nvidia (54.4%), Broadcom (39.5%), Netflix (38.5%), Chinese Tencent Holdings (43.5%) and Kweichow (29.3%). In the industry rankings of BCG Russian, diamond major Alrosa was fourth among the mining companies, while Evraz, Magnitogorsk Iron and Steel Works (MMK) and Severstal were in the metals top 10 (3rd, 5th, and 10th, respectively). Analysts surveyed by Vedomosti daily attributed the growth in Lukoil's share value to improved dividend policy and the share buyout programme launched last year. The company is seen as generating strong cash flow at low leverage and capex, making a positive dividend outlook. Russian stocks are doing well this year and the market has returned about 25% YTD – its best performance in a decade. However, Russian stocks are still heavily undervalued, despite the gains, as bne IntelliNews reported in “Why are Russian stocks so cheap?”
76 RUSSIA Country Report July 2019 www.intellinews.com