RE: Impact of new Russian legislation15 Aug 2023 03:12
Hi usernames and apologies for the late reply.
I do interpret some of this differently but as you say, we'll see how it pans out in the next week / months.
I tried to copy your message below and add my view but the number of characters got to its limit so I've just referenced each of you paragraphs with the first 3 words. Hope this makes sense. Again, this is not in any way meant to argue, it's merely to share opinions and thoughts.
"Nobody is concerned ..."
BT - if an ESO is created from one / some / all of the Russian EVR entities I don't see where the devaluation comes from. All Russian indirect Evraz UK PLC holders must convert their shares into direct shares in the ESO. All foreign shareholders shares stay with the UK PLC (as you say). But the total number of outstanding shares i.e. ESO plus UK PLC is still the same is those outstanding in UK PLC today, thus no dilution. Unless the ESO issues more shares in the future, but this is not the debate here.
"Article 1 may ..."
BT - it's a fair point and I did mention that the law could be changed at any time by the Russian Government. I think this point can just be summed it by acknowledgment and that time will tell. I'm sure, like me, you hope this isn't the case.
"Suspension of corporate...
BT - Again, of course anything can happen through this time but my comments in the video were about my interpretation on the law as it stands. I'd also say that the shares in the ESO don't get "reallocated" per se. The original Russian citizen / resident shares in the UK PLC get converted into shares in the ESO (private or public company as the case may be). These new shares then get allocated to the Russian citizen / resident on a pro-rated and equal basis to that which they had ownership in the original UK PLC.
"Compensation for loss..."
BT - As I mentioned above, I do not interpret this as Russian citizens / residents keeping their shares in the UK PLC. They have to convert this into direct holdings in the new ESO. For me at least, there is no doubling up, and therefore dilution.
"In conclusion, if ..."
BT - I think the second statement in Article 1 is an express statement saying there is no "intent" in the legislation to prevent unjustified infringement of foreign holders rights. I think that is the best we will get. The Russian Government will certainly not create a law that protects foreign investor rights above local rights so whilst acknowledging what you say re they could just ignore this and do what they want, I still think this statement is great that it has at least been made. Regards the dilution part, I think I answered that above. I don't see the new legislation, as it's written today, does this.
Again, nothing here is meant to be an argument. I guess we just have slightly different interpretations of the document. It will be interesting to see what happens...
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