Page 107 - RusRPTSept22

recommendation of a Rb52.5/sh dividend back on June 30, the market understandably took it very seriously: A major theme in the investment case for GAZP up to that point had been the “dividend revolution”, which saw the Ministry of Finance, over the course of nearly a decade, push through a sea change in the dividend policies of Gazprom and other state-owned enterprises, raising them from often pittance levels to 50% of consolidated net income. The AGM’s rejection of the 2021 dividend – and the near-simultaneous imposition of a one-off tax levy of a similarly-sized cRb1.25bn – severely undermined investor confidence in both the dividend policy and the company’s tax regime, the latter of which had been relatively stable in recent years. In response to that disappointment, the company’s stock immediately collapsed by 30%, from cRb207/sh to cRb193/sh.
Big interim dividend – The best-possible decision to resolve the profound dividend uncertainty: Given the situation, we think the decision to pay the company’s first-ever interim dividend now, and to do with a dividend almost perfectly matching “the one that got away” on June 30, is about the best possible way management could have gone about addressing the impairment to GAZP’s investment case. Mr. Sadygov’s follow-up statement pledging adherence to the 50% dividend policy going forward is welcome, but by itself it would have carried little to no weight with investors. However, when such a statement backs up a concrete decision to pay a very large dividend now – rather than in 10 months’ time – it is another thing entirely.
8.3.3 ECM news
Russian steelmaker Novolipetsk Steel (NLMK) will carry out a mandatory conversion of global depositary receipts (GDRs) of foreigners and of investors, whose actions are limited by the sanctions into ordinary shares after October 12, the company said in a statement on Tuesday. If a GDR owner wishes to partake in the conversion, he has to file a request to Raiffeisenbank before the deadline. The Russian owners of GDRs will have access for an automatic conversion mechanism, NLMK said.
Russian steel producer Severstal delisted its global depositary receipts (GDRs) from the London Stock Exchange (LSE) on August 22, the Russian company announced the same day. "At 8:00 a.m. London time on 22 August 2022, the Financial Conduct Authority announced that the GDRs are cancelled from its Official List effective from that time. The LSE also announced at that time on 22 August 2022 that the GDRs are cancelled from admission to trading on the LSE with effect from that time," the company said in a statement. The company decided to withdraw from the London market after its owner Alexander Mordashov was placed on the international sanctions lists. The company itself has not been sanctioned and most of Russia’s metallurgical companies have been exempted as Russia remains deeply embedded in the international metals markets.
Brokers are starting to offer unqualified investors to invest in Russian startups at the pre-IPO stage. Alfa Investments is the first to launch such an
107 RUSSIA Country Report September 2022 www.intellinews.com