MGNT.L Regulatory News (MGNT)

PJSC MAGNIT - BoD Meeting Results

PR Newswire

London, August 2

Press Release

Krasnodar

August 2, 2016

PJSC “Magnit” Announces the Results of the BOD Meeting, Including the Decision to Call the EGM and Determination of the Record Date

Krasnodar, August 2, 2016: PJSC “Magnit”, Russia’s largest food retailer (the “Company”, “Issuer”; MOEX and LSE: MGNT), is pleased to announce the results of the BOD meeting.

Please be informed that on August 1, 2016 the Company held the BOD meeting (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of August 1, 2016).

The meeting agenda:

Calling of the extraordinary general shareholders meeting (“the EGM”) of PJSC “Magnit”.

Approval of the form of holding of the EGM of PJSC “Magnit”.

Determination of the voting ballots acceptance deadline.

Determination of the postal address to send the filled voting ballots.

Determination of the PJSC “Magnit” EGM record date.

Approval of the agenda of the EGM of PJSC “Magnit”.

Determination of the procedure of notification of shareholders of the holding of the EGM of PJSC “Magnit”.

Determination of the list of information (materials) provided to shareholders to prepare to the EGM of PJSC “Magnit”, and the procedure of its provision.

Determination of the form and the text of the voting ballots on the items to be considered at the EGM of PJSC “Magnit”.

Approval of recommendations to the EGM on the dividend amount on PJSC “Magnit” shares following the results of the 1H 2016, the procedure of its payment and the dividend record date.

Determination of the recommended price for major related party transactions to be approved by the EGM of PJSC “Magnit”.

Determination of the position of the PJSC “Magnit” representative at the exercise of the voting right on the JSC “Tander” shares owned by the Company.

The following BOD members were present: V. Gordeichuk, S. Galitskiy, K. Pombukhchan and A. Shkhachemukov.

A. Aleksandrov, A. Zayonts and A. Pshenichniy provided their written opinions on the items of the agenda of the BOD meeting of PJSC “Magnit”.

The number of the BOD members participating in the meeting, including written opinions of A. Aleksandrov, A. Zayonts and A. Pshenichniy, amounts to not less than half of the number of the BOD members determined by the Charter of the Company.

Quorum to hold the BOD meeting with this agenda is present.

Voting Results:

Items 1 – 10, 12:

V. Gordeichuk – “for”, A. Aleksandrov - “for”, S. Galitskiy – “for”, A. Zayonts - “for”, K. Pombukhchan - “for”, A. Pshenichniy – “for”, A. Shkhachemukov – “for”.

The decisions were made.

Items 11.1 – 11.2:

V. Gordeichuk – “for”, A. Aleksandrov - “for”, S. Galitskiy – did not participate in voting, A. Zayonts - “for”, K. Pombukhchan - “for”, A. Pshenichniy – “for”, A. Shkhachemukov – “for”.

The decisions were made.

Content of the decisions and voting results:

Item 1 on the agenda:

“To call the EGM of PJSC “Magnit”.

Item 2 on the agenda:

“To hold the EGM in the form of the absentee voting”.

Item 3 on the agenda:

“To determine September 8, 2016 as the deadline of voting ballots acceptance”.

Item 4 on the agenda:

“To determine the postal address to send the filled voting ballots: 15/5 Solnechnaya street, Krasnodar, 350072, Russia”.

Item 5 on the agenda:

“To determine August 15, 2016 as the PJSC “Magnit” EGM record date.

Item 6 on the agenda:

“To ratify the following agenda of the EGM of PJSC “Magnit”:

1. “Payment of dividends on PJSC “Magnit” shares following the results of 1H 2016”.

2. “Approval of the major related party transactions”.

3. “Approval of the Charter of PJSC “Magnit” in a new edition”.

Item 7 on the agenda:

“To approve the text of the announcement of the EGM of PJSC “Magnit” and, according to the clause 13.10 of the PJSC “Magnit” Charter, to publish this announcement on the official website of the Company on the information and telecommunications network “Internet” in the Russian version at http://ir.magnit.com/tsentr-aktsionera/sobraniya-aktsionerov/, in the English version at http://ir.magnit.com/en/shareholder-center/agm-egm-voting/ by August 8, 2016 inclusive”.

Item 8 on the agenda:

“To approve the following list of information (materials) to be presented to the shareholders entitled to participate in the EGM of PJSC “Magnit” to prepare for the Company’s EGM:

- recommendations of the Company’s Board of Directors on the dividend amount on PJSC “Magnit” shares following the results of 1H 2016, the procedure of its payment, and the dividend record date;

- information on transactions to be approved by the EGM;

- draft Charter of PJSC “Magnit” in a new edition;

- information on the changes included to the Charter of PJSC “Magnit”;

- draft decisions of the EGM on the agenda items.

To authorize the sole executive body to provide access to the above mentioned information materials starting from August 18, 2016 from 10:00 AM to 5:00 PM (break from 12:00 PM to 1:00 PM) in PJSC “Magnit” headquarters at the following address: 15/5 Solnechnaya street, Krasnodar, Russia, tel. (861) 210-98-10 x 14992”.

Item 9 on the agenda:

“To approve the form and the text of the voting ballots on the items to be considered at the EGM of PJSC “Magnit”.

Item 10 on the agenda:

“To approve recommendations to the General shareholders meeting of the Company on the dividend amount on PJSC “Magnit” shares following the results of the 1H 2016, the procedure of its payment and the dividend record date.

The recommendations of the PJSC “Magnit” BoD include:

Dividend payment on PJSC "Magnit" following the results of the 1H2016 in the total amount of 7,999,890,633, which accounts for 84.60 rubles per share.

Approval of the following procedure of dividend payment:

- payment of dividends shall be executed in monetary funds;

- the following date shall be determined as the dividend record date: September 23, 2016;

- payment of dividends shall be executed pursuant to the procedure and within the time limit established by the legislation of the Russian Federation”.

Item 11.1 on the agenda:

“Due to the fact that the loan agreement (several related loan agreements), which the Company plans to execute in future with Joint Stock Company “Tander”, is a major related party transaction, the price of the property, to the possible disposal of which the granting of the loan is related, is to be determined by the Company’s Board of Directors.

According to articles 77 and 83 of the Federal law as of December 26, 1995 # 208-FZ “On joint-stock companies” to decide that the price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the loan agreement (several related loan agreements), shall be determined on the basis of the following terms and conditions of the loan agreement(s), which the Company plans to execute in future:

1. Parties of the transaction (transactions): the lender – PJSC “Magnit”, the borrower – JSC “Tander”;

2. Subject of the transaction (transactions): loan of funds;

3. Maximum price (amount) of the transaction (transactions): up to 62,000,000,000 (Sixty two billion) rubles;

4. Loan interest rate (per annum): not more than 125 (One hundred and twenty five) percent of the key interest rate of the Bank of Russia (published on the official website of the Bank of Russia on the Internet (www.cbr.ru)) as of the loan issue date;

5. Time limit for the fulfillment of obligations under the transaction (transactions): up to 3 (Three) years from the time of its execution (the time of repayment of the loan amount and interest).

To decide that the price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the loan agreement (several related loan agreements), can amount to 25 and more percent of the book value of the Company’s assets, determined from the data of its accounting (financial) statements as of the last reporting date, but not more than 50 percent of the book value of the Company’s assets, determined from the data of its accounting (financial) statements as of the last reporting date”.

Item 11.2 on the agenda:

“Due to the fact that the guarantee agreement (several related guarantee agreements), which the Company (hereinafter – the Guarantor) plans to execute in future as security for obligation of Joint Sstock Company “Tander” (beneficiary) (hereinafter – the Borrower) to Public Joint Stock Company “Sberbank of Russia” (hereinafter – the Creditor) under the agreements on the opening of revolving and (or) non-revolving credit line and (or) under the General agreements on the opening of revolving credit line with tiered interest rates (hereinafter – the Agreements), which the Borrower plans to execute in the future, is a related party transaction, the price of the property, to the possible disposal of which the granting of the guarantee is related, is to be determined by the Company’s Board of directors.

According to articles 77 and 83 of the Federal law as of December 26, 1995 # 208-FZ “On joint-stock companies” to decide that the amount of obligation of the Company and, subsequently, the price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the guarantee agreement (several related guarantee agreements), shall be determined on the basis of the following terms and conditions of the Credit agreements, which the Borrower plans to execute in future:

1. Under the Agreements the Creditor and the Borrower shall conclude separate credit transactions (hereinafter – the Credit transactions) by signing confirmations containing essential terms and conditions of the Credit transaction;

2. The total credit limit under the Agreements shall not exceed 28,000,000,000 (Twenty eight billion) rubles;

3. The credit term under each Credit transaction shall not exceed 4 (Four) years;

4. The interest rate for the credit use shall not exceed 30 (Thirty) percent per annum;

5. Terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the relevant Agreement;

6. Maximum price (amount) of the guarantee agreement: the total amount of obligations of the Guarantor shall not exceed 61,600,000,000 (Sixty one billion and six hundred million) rubles.

To decide that the price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the guarantee agreement (several related guarantee agreements), can amount to 25 and more percent of the book value of the Company’s assets, determined from the data of its accounting (financial) statements as of the last reporting date, but not more than 50 percent of the book value of the Company’s assets, determined from the data of its accounting (financial) statements as of the last reporting date”.

Item 12 on the agenda:

“To recommend the sole executive body of PJSC “Magnit”, which is the sole shareholder of JSC “Tander”, to make the following decision at the exercise of the voting right on JSC “Tander” shares owned by the Company:

“Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion by JSC “Tander” (hereinafter – the Borrower) with Public Joint Stock Company “Sberbank of Russia” (hereinafter – the Creditor) of the General agreement on the opening of a revolving credit line with tiered interest rates (hereinafter – the Agreement), which the Borrower plans to execute in the future, related to acquisition, disposal and possible direct or indirect company's disposal of the property, the cost of which amounts to 5 and more per cent of the balance sheet value of assets of the company, its subsidiaries, the principal company (in relation to which the company is a subsidiary), as well as other subsidiaries of the principal company (the “Group”), determined on the basis of the latest available IFRS consolidated report of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

1.Under the Agreements the Creditor and the Borrower shall conclude separate credit transactions (hereinafter – the Credit transactions) by signing confirmations containing essential terms and conditions of the Credit transaction;

2. The total credit limit under the Agreements shall not exceed 20,000,000,000 (Twenty billion) rubles;

3. The credit term under each Credit transaction shall not exceed 4 (Four) years;

4. The interest rate for the credit use shall not exceed 30 (Thirty) percent per annum;

5. Terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the Agreement.

Hereby to provide the Chief Executive Officer of JSC “Tander” with the right to sign the additional agreements, which change the terms and conditions of the Agreement, including but not limited to the change of the interest rates, the credit amount and the term of the credit provision within the limits hereof”.

Items of the agenda of PJSC "Magnit" Board of Directors are related to the exercise of rights on ordinary registered uncertified shares, state registration number 1-01-60525-P of 04.03.2004, International Stock Identification Number (ISIN) RU000A0JKQU8.

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Company description:

Magnit is Russia's largest food retailer. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2016, Magnit operated 34 distribution centers and 12,888 stores (9,902 convenience, 398 hypermarkets, and 2,588 drogerie stores) in 2,397 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the unaudited IFRS management accounts for 1H 2016, Magnit had revenues of RUB 522 billion and an EBITDA of RUB 52 billion. Magnit's local shares are traded on the Moscow Stock Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB+. Measured by market capitalization, Magnit is one of the largest retailers in Europe.