Pjsc Tatneft Regulatory News (ATAD)

28 October 2016

TATNEFT's stake in the share capital of PJSC Bank ZENIT exceeded 50%

As a result of the mandatory offer carried out by PJSC Tatneft in accordance with the Federal Law on "Joint-Stock Companies", Tatneft Group's stake in the share capital of PJSC Bank ZENIT exceeded 50%.

As a result of additional issue of Bank ZENIT's shares completed in June 2016 the participation of PJSC Tatneft and its subsidiary in the share capital of the Bank amounted to 48.79%, and increased to 50.4% due to the purchase of shares under the mandatory offer.

The Republic of Tatarstan is one of the main regions where Bank ZENIT and ZENIT Banking Group have a presence and offer a full range of banking services to a large number of customers, including Tatneft's entities and employees. Tatneft's investments in ZENIT Banking Group contribute to the parties' long-term strategic partnership aimed at successful development of ZENIT Banking Group's business and value creation.

In the past several years, Bank ZENIT has intensified efforts to increase the Bank's capital. In particular, in 2015, Bank ZENIT received federal loan bonds (OFZs) worth 9.933 billion rubles from the Deposit Insurance Agency (DIA) under the relevant governmental programme, which were used as a source of additional capital for the Bank. In addition, in November 2015, the shareholders converted two long-term subordinated deposits placed with Bank ZENIT worth RUB 5.1 billion into perpetual deposits. In June 2016, Bank ZENIT completed a RUB 8 billion increase of its share capital, bringing the total to RUB 19.545 billion in accordance with RAS.

Due to the increase of Tatneft's stake in the Bank's share capital, Tatneft will assess the need for Bank ZENIT's consolidation into Tatneft Group's financial statements prepared in accordance with IFRS beginning from the moment or recording title to the Bank's shares following the mandatory offer; Tatneft's management believes that the probability of establishing control over the Bank under IFRS and, accordingly, the potential for its consolidation are high.

Information note

ZENIT Banking Group

ZENIT Banking Group was established in 2005 following Bank ZENIT's acquisition of a controlling stake in JSB Devon-Credit. In 2007, the Banking Group acquired Lipetskcombank and Sochigazprombank LLC (later renamed Bank ZENIT Sochi). Spiritbank (based in the city of Tula) joined the Group in December 2008. According to the consolidated financial statements prepared in accordance with IFRS for the period ended 30 June 2016, the Group's capital calculated based on the requirements of the Basel Committee amounted to RUB 36.4 billion and its assets amounted to RUB 302.1 billion. The Group provides a full range of banking services: comprehensive services for corporate clients, retail services, Private Banking, investment banking and inter-bank services. ZENIT Banking Group maintains a presence in 26 Russian regions and has a sales network of 161 outlets. The Group has an extensive network of international correspondent banks, partnering with more than 100 international institutions in Europe, America and Asia. Bank ZENIT is currently rated B1 by Moody's and BB- by Fitch.

TATNEFT Group

PJSC TATNEFT is one of the largest Russian public joint-stock companies with the current market capitalization of approximately 750 billion rubles. Tatneft Group is a vertically integrated oil and gas production, refining and petrochemicals holding. Tatneft Group's core entities are located in the Republic of Tatarstan. Tatneft's strategic priorities are to effectively develop oil and gas fields and grow production, including with the use of advanced enhanced oil recovery techniques, expand own high-margin crude oil refining, develop the petrochemicals segment and increase sales of its own oil and gas production equipment and services. PJSC TATNEFT was one of the founders of Bank ZENIT. Tatneft has always retrained a stake in Bank ZENIT's capital throughout the history of ZENIT Banking Group.

Contacts:

Vladimir Sisoev 

Head of PR

ZENIT Banking Group

Tel.: +7 (495) 937-07-37, ext. 3161

E-mail: pr@zenit.ru

PJSC TATNEFT's Press Center

Tel.: +7 (8553) 37-37-51

E-mail: alparova@tatneft.ru 

This material contains inside information.

Forward-looking statements: These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. PJSC TATNEFT and Bank ZENIT assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.