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Disi - sorry to hear about your situation. I'm in with over 100k shares too.

Let's see what actually happens next month before we give up on this. You never know...

Https://www.morganlewis.com/pubs/2023/08/update-russia-adopts-law-removing-unfriendly-state-holding-companies-from-shareholding-in-certain-russian-companies

Source: Consolidated Financial Statements as at 31 December 2021

Assuming the entities meet the criteria specified in the new law, these are the subsidiaries in Russia that are at risk of being classified as ESOs and transferred away from Evraz PLC into the direct ownership of Russian investors:

EVRAZ Nizhny Tagil Metallurgical Plant (EVRAZ NTMK") (Steel production) 100% owned

EVRAZ Consolidated West-Siberian Metallurgical Plant ("EVRAZ ZSMK") (Steel production) 100% owned

Raspadskaya (Coal mining) 93.24% owned

Yuzhkuzbassugol (Coal mining) 93.24% owned

EVRAZ Kachkanarsky Mining-and-Processing Integrated Works (Ore mining & processing) 100% owned

Outside of the scope of ESO classification are the following non-Russian subsidiaries:

EVRAZ Inc. NA (Steel production) 100% owned

EVRAZ Inc. NA Canada (Steel production) 100% owned

Had to Google that one Coggy as I've not come across that one before. Plus one from me :)

I'm surprised there isn't a queue of Russian people on here a mile long looking to buy the shares OTC at a discount. Easy money for them if they're likely to be getting shares in ESOs.

BizTech - Evraz PLC is a parent company. It's assets comprise of majority owned and wholly owned subsidiaries. Once these subsidiaries get classed as ESOs, they will be taken away from Evraz PLC and redistributed to Russian investors such as RA. Evraz will no longer own the subsidiaries and it will therefore be devalued as a result.

Russian investors such as RA will be no worse off. Yes, their Evraz PLC shares will be devalued but in return they receive a direct holding in the ESO to balance out the loss. Non-Russian investors only get to keep their shares in the devalued Evraz PLC. There is no set off for us in terms of shares in the ESO.

The new law doesn't envisage Russia paying compensation. I'm not sure where you're getting that from.

Steven's video states (around 10 mins in) that the ESO may itaelf issue compensation for shares not alloted to foreign investors. Presumably the ESO would then redistribute those shares among the Russian investors.

BizTech - thank you for the video. You've put a lot of time and effort in. Some of your conclusions, however, are questionable.

Nobody is concerned about having their shares in the foreign PLC appropriated. I'm sure we will all still own all our shares in Evraz PLC. The concern is which, if any, of Evraz PLC's majority or wholly owned subsidiaries will be classed as ESOs and transferred over to Russian investors thus devaluing Evraz PLC in the process.

Article 1 may well say that the new law is not aimed at the unjust infringement of foreign shareholders. Doesn't mean it won't happen. If you consider that the aim of the "special militarily operation" was the de-natzification of Ukraine (or something like that) and not the killing of Ukrainian citizens or the theft of property, you kind of get the picture. It doesn't need to be an aim in order for it to happen.

Suspension of corporate rights until December 2024 is no comfort. Before then, shares in the ESO will be reallocated. So what if the law is not then extended, the damage can be done in the intervening 16 month period.

Compensation for loss of shares or dividends to non-Russian investors would have to go to Evraz PLC, as it is the non-Russian holder. As all Russian investors get to keep their Evraz PLC shares as well as the new direct holdings in ESOs, they too get a share of any successful claim. Russians get two bites of the cherry. We get to keep a fraction of the fraction that gets given to Evraz PLC as compensation.

In conclusion, if the law wanted to prevent unjustified infringement of foreign holders rights then it would have expressly done so. It hasn't. Evraz PLC may be able to claim compensation but any compensation will be heavily diluted among all Evraz PLC shareholders. The only way to prevent dilution is for Evraz PLC to ensure that compensation is only shared among non-Russian shareholders and, if even possible, that would be a matter for the Evraz Board.

Let's see how this all pans out over the coming weeks and months. Thanks again for all the time and effort you put into the video.

Hey, Ranjm. Talking about history do you remember how WWI started. The heir to the Austro-Hungarian empire was assassinated by a Bosnian Serb and rather than leave Austria and Serbia to sort things out, Russia decides it needs to step in to support Serbia. It could have stayed clear but no, decided to drag the world into a bloody war. WWI then lead to WWII.

Just saying, Russians have always fancied a bit of meddling and it has lead to terrible consequences. It's still trying to destabilise the world today, in almost every region.

My guess is that if Russia stayed in Russia and minded its own business, then the world would be a much better place.

In terms of countermeasures, the US and Canadian governments could pass laws allowing Evraz NA to be ceased and non-Russian holders awarded shares in the NA entities on a pro-rata basis. Russian holders would have their rights "suspended" and reallocated. Then we could trade and receive dividends. Same for other non-Russian subsidiaries.

It's asking a lot but not beyond the realms of possibility. Nothing unfair, just mirroring what Moscow is doing.

An up to date copy of the shareholders register probably wouldn't be forthcoming from the registrar (Evraz itself) but hopefully Computershare kept a copy on transfer.

I'll put in a call to President Biden this evening; he'll get it sorted.

There is going to be a lot of anger and a lot of blame on here. The blame should be aimed squarely at Russia for invading Ukraine in the first place and for introducing laws allowing such asset stripping in response to the sanctions. The risk to the Russian subsidiaries has not changed so this new law is simply about freeing up the assets so they can be traded by Russians and so they can receive dividends.

The sanctions are an inevitable consequence of the invasion. We should be looking to our government to see what countermeasures or compensation can be put in place. Ceased Russian assets will be used to compensate Ukraine but some of it should be made available to eligible (non-Russian) claimants IMHO.

Moscow will determine what an ESO is based on given parameters. It's not a question of Evraz having a choice in deciding which of its subsidiaries are ESOs. Evraz's honour and integrity are irrelevant. However, the cynic in me wouldn't be surprised if the lawyers on the Board of Evraz had contributed to discussions on what the ESO parameters should be so that they could ensure that all the valuable assets were taken out of Evraz PLC.

RA knew full well that this scenario was a likely outcome. If you recall, RA mysteriously transferred his holding from an offshore company to his own name just before the Russian invasion took place. That's no coincidence. Evraz then recommended that all other shareholders go down the certified route and get their name and address on the register. That was a recommendation aimed at benefitting Russian PIs in this scenario. Sure, the odd non-Russian PI with a certificate could also transfer shares in the meantime but the bigger picture was always in the background. Russians enjoy their chess and like to think 2, 3, 4 steps ahead. That's all we're watching unfold here.

RA is a ruthless business man and a bit of a shady character. He may well help repatriate Ukrainian POWs and children but that's a lot of good free PR for him. It doesn't cost him a penny. On the other hand you see that the proceeds of the Chelsea FC sale have not been sent to Ukraine because RA hasn't signed off on the transfer. Says it all really.

Consider everything that's actually happened and what will probably happen going forward. Any decent asset will be stripped from Evraz and given to Russian investors (such as RA) together with our share of those assets. None of Evraz's debt will transfer to Russian investors under the new law, they just get the cream. Evraz will be left with all the debts and enough overseas assets to cover those debts. If we're left with anything, and it's a big IF, it won't be much.

I'd transfer my shares now to a poor Russian peasant so that they could have a better life, rather than let RA andd his mob get their hands on it. However, the poor peasant would probably have the police knocking on their door within days and throwing them in jail for 20 years for not being able to prove they had acquired the shares legitimately...

Apologies ESC = ESO

It seems Moscow will decide which of the parent companies in unfriendly states (probably Evraz PLC) own Economically Significant Organisations as subsidiaries (probably even RASP) and then reregister those ESOs away from the parent on a pro-rata basis to existing Russian Evraz holders. Any pro-rata holdings in ESOs held by non-Russian investors will be reallocated to Russian investors.

So contrary to my earlier post, all may not be lost. Any Russian subsidiaries of Evraz that do not meet the ESO criteria would remain with Evraz, as would any non-Russian entity (i.e. Evraz NA). That means the Russian investors (such as RA) would benefit from getting a pro-rata share of ESOs, a pro-rata share of non-Russian investors shares in those ESOs and then retain their shares in Evraz PLC so that they keep their interest in the Russian companies that aren't ESOs and the non-Russian assets. While UK PIs would simply retain an interest in the Russian companies that aren't ESOs and non-Russian companies.

If this is the case then we are looking at a smaller version of Evraz with a lower valuation. However, some value may be retained which is good news.

There has to be a way to stop this becoming a win/win situation for Russian shareholders in Evraz PLC. One response would be for our government(s) to take similar action in response. Basically, set our own (Western) ESC criteria and ban Russians from owning any Western ESC shares before reregistering them away from the parent. I would be okay with taking a pro-rata share of RAs holding in Evraz NA, if he is getting a pro-rata share of my ESOs in Russia. It's only fair :)

Anyway, let's wait and see what actually comes out in the following weeks. It may not be as bad as it looks. If many of the Evraz subsidiaries avoid ESC categorisation we can all let out a collective breath of relief.

In short I think that non-Russian PIs (like myself) stand to lose everything. Between them, Russian politicians and Russian lawyers have found a way around the suspension.

It's fairly safe to assume the Evraz PLC will be categorised as an Economically Significant Company (ESC), as referred to in the Morgan Lewis article. Once that happens, any non-Russian PIs may have their rights diluted or taken away.

It's not clear exactly what will happen to holdings of non-Russian PIs. Rights suspended (no doubt) but in reality lost forever. I'm sure that the Russian lawyers who comprise the Board of Evraz PLC will tell us in the coming weeks, once Evraz has been categorised as an ESC.

Call me cynical but I'm suspect Evraz's letter to shareholders has already been written and they are just hovering over the "SEND" button pending official notice of designation of ESC status. As has been said, nothing is a given but that is my view of the situation we are facing.

Icecool - the article you posted is dated 4 August 2022 (last year) and concerned measures in place until the end of 2022. The Sky article is about a different law.

There is more about the new law on the link below.

https://www.morganlewis.com/pubs/2023/08/update-russia-adopts-law-removing-unfriendly-state-holding-companies-from-shareholding-in-certain-russian-companies

If the UK imposed similar laws, Evraz shareholders could end up with a share of the oligarchs holdings. No ideal but better than ending up with nothing.

This is what we should be petitioning Government about IMHO.

From Sky News Ukraine War Live 4 August 2023 @ 18.45

Russia bans 'unfriendly' foreigners from owning firms

President Putin has signed new laws allowing certain major Russian companies and banks to ban people from "unfriendly" countries from holding stakes.

State media said the government would draw up a list of Russian firms to be covered by the law, including "systemically important" banks and firms that are above a certain threshold for employee numbers, revenue, taxes and assets.

It's not yet clear exactly which countries will be officially classed "unfriendly" - but it's safe to say they will be countries that have imposed sanctions on Russia.

The law would mean investors from those countries could have their rights to own shares suspended, with those shares being distributed proportionally among Russian owners.

Https://www.reuters.com/world/europe/russian-billionaire-abramovich-challenges-eu-sanctions-against-him-2023-07-12/

Shares in Evraz were suspended "in the first place" because the largest shareholder (R Abramovich) became sanctioned in the UK. The FCA didn't know what affect that had on dealing in Evraz shares, so the shares were temporarily suspended in order to protect shareholders.

The UK government then decided to sanction Evraz itself for supplying steel that could have been used to produce tanks. That was the steel sold to UralVagonZavod. However, shares had already been suspended prior to Evraz becoming sanctioned.

While that reason was arguably open to challenge (not therefore "nonsense") due to express provisions in the contract with UralVagonZavod, the UK government later clarified that the suspension was more generally due to Evraz's role in the railway industry thus bypassing any arguments about how UralVagonZavod actually uses steel supplied by Evraz. Russia is heavily reliant on the railways for both military and civilian use and its clear to everyone that Evraz supplies steel to the railway industry in Russia.

So, suspended because of R Abramovich, then sanctioned later ensuring that the shares remain suspended regardless of the status of individual shareholders.