MGNT.L Regulatory News (MGNT)

PJSC MAGNIT - BoD Meeting Results

PR Newswire

London, October 31

Press Release

Krasnodar

October 31, 2016

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

Krasnodar, Russia (October 31, 2016): Magnit PJSC, one of Russia’s leading retailers (the “Company”, “Issuer”; MOEX and LSE: MGNT), is pleased to announce the results of the BOD meeting.

Please be informed that on October 31, 2016 the Company held the BOD meeting (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of October 31, 2016).

The meeting agenda:

The following BOD members were present: S. Galitskiy, V. Gordeichuk, 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 – 11, 13 – 15:

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 12.1 – 12.2:

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 of PJSC “Magnit” in the form of a meeting (joint presence of shareholders to discuss the agenda items and make decisions on the voting items with preliminary submission of voting ballots prior to the holding of the EGM)”.

Item 3 on the agenda:

“To appoint the EGM of PJSC “Magnit” on December 8, 2016 at 11:00 AM, to appoint the registration of the meeting participants on December 8, 2016 at 10:00 AM.

Venue: 3-rd floor, conference hall, 15/5 Solnechnaya street, Krasnodar, Russia”.

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 November 14, 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 the nine months of the 2016 reporting year”.

2. Early termination of the authorities of the members of the PJSC “Magnit” Revision commission.

3. Election of the members of the PJSC “Magnit” Revision commission.

4. Approval of the major related party transactions”.

Item 7 on the agenda:

“To approve the text of the announcement of the EGM 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 November 7, 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:

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

2) information on the candidates to the PJSC “Magnit” Revision commission, including availability or lack of their written consent to stand for election;

3) information on transactions to be approved by the EGM;

4) 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 November 17, 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 nine months of the 2016 reporting year, the procedure of its payment and the dividend record date”.

The recommendations of the PJSC “Magnit” BoD include:

Item 11 on the agenda:

“To approve the following list of candidates to be elected to the PJSC “Magnit” Revision commission at the EGM of the Company:

- Roman Efimenko;

- Anzhela Udovichenko;

- Lyubov Shaguch”.

Item 12.1 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): not more than 58,000,000,000 (Fifty eight 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 12.2 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 Stock Company “Tander” (beneficiary) (hereinafter – the Borrower) to Public Joint Stock Company “Sberbank of Russia” (hereinafter – the Creditor) under the agreements on the opening of the revolving/non-revolving credit line and (or) under the General agreements on the opening of the revolving framework credit line with tiered interest rates (hereinafter – the Agreements), which the Borrower plans to execute in the future, is a major 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 Agreements, the guarantee agreement (several related guarantee agreements):

2. The total credit limit under the Agreements shall not exceed 30,000,000,000 (Thirty billion) rubles;

3. The validity period of the credit limit under the Agreements shall not exceed 5 (Five) years;

4. The credit term under any Credit transaction shall not exceed 36 (Thirty six) months;

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

6. The terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the Agreements;

7. The maximum price (amount) of the guarantee agreement: the total amount of obligations of the Guarantor shall not exceed 57,000,000,000 (Fifty seven one billion) 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 13 on the agenda:

“To determine the amount of remuneration for the auditor’s services – Ernst & Young LLC – for the audit of the consolidated financial statements for the year 2016 prepared in accordance with IFRS (including the consolidated financial statements prepared in accordance with the Federal law as of 27.07.2010 No. 208-FZ "On consolidated financial statements") in the amount equivalent to 1,067,003 (one million sixty seven thousand three) US dollars (incl. VAT) at the exchange rate of the Central bank of the Russian Federation as of the date of payment”.

Item 14 on the agenda:

“To approve the Code of business ethics of PJSC “Magnit” in a new edition”.

Item 15.1 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 Joint Stock Company “ALFA-BANK” (hereinafter – the Creditor) of the Additional agreement to the Credit agreement No. 013P3L as of 29.04.2014 on the opening of a revolving credit line in Russian rubles, or a new credit agreement (hereinafter – the Credit agreement 1), the Additional agreement to the Credit agreement No. 01CC5L as of 12.01.2015 on the opening of a revolving credit line in Russian rubles, or a new credit agreement (hereinafter – the Credit agreement 2), which are related transactions and 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 (as amended by the additional agreement):

Credit agreement 1:

1.1. The Creditor shall provide the Borrower with monetary funds in Russian rubles (hereinafter – the “Credits”) in the form of the revolving credit line (hereinafter – the “Credit line”);

1.2. Within the limits of the Credit line the Borrower shall be entitled to receive credits, on which the maximum amount of the aggregate debt on any day of the term of the Credit line shall not exceed 13,000,000,000 (Thirteen billion) rubles (“Limit of indebtedness”);

1.3. The term of the Credit line – on or before 31.12.2020. The Borrower shall repay all received credits by the maturity date of the Credit line (inclusive);

1.4. The Credits within the term of the Credit Line shall be provided for not more than 36 (Thirty six) months;

1.5. The interest rate: not more than 35 (Thirty five) percent per annum;

1.6. In case of undue repayment of Credits, the Creditor is entitled to charge the Borrower a penalty in the amount of 0.1 percent of the amount of the outstanding liability per each overdue day, but not lower than the dual key interest rate of the Bank of Russia effective on the day for which the penalty is charged;

1.7. The terms and procedure of granting and repayment of the Credit amounts (including the amount of any remuneration paid to the Creditor by the Borrower), other penalties for the non-fulfillment/improper fulfillment of obligations by the Borrower under the Credit agreement 1 shall be determined by the Credit agreement 1.

Credit agreement 2:

1.1. The Creditor shall provide the Borrower with monetary funds in Russian rubles (hereinafter – the “Credits”) in the form of the revolving credit line (hereinafter – the “Credit line”);

1.2. Within the limits of the Credit line the Borrower shall be entitled to receive Credits, on which the maximum amount of the aggregate debt on any day of the term of the Credit line shall not exceed 8,000,000,000 (Eight billion) rubles (“Limit of indebtedness”);

1.3. The term of the Credit line – on or before 31.12.2020. The Borrower shall repay all received Credits by the maturity date of the Credit line (inclusive);

1.4. The Credits within the term of each Credit line shall be provided for not more than 36 (Thirty six) months;

1.5. The interest rate: not more than 35 (Thirty five) percent per annum;

1.6. In case of undue repayment of Credits, the Creditor is entitled to charge the Borrower a penalty in the amount of 0.1 percent of the amount of the outstanding liability per each overdue day, but not lower than the dual key interest rate of the Bank of Russia effective on the day for which the penalty is charged;

1.7. The terms and procedure of granting and repayment of the Credit amounts (including the amount of any remuneration paid to the Creditor by the Borrower), other penalties for the non-fulfillment/improper fulfillment of obligations by the Borrower under the Credit agreement 2 shall be determined by the Credit agreement 2.

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 Credit agreement 1, the Credit agreement 2, 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”.

Item 15.2 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 ROSBANK (hereinafter – the Creditor) of the agreement on the revolving and (or) non-revolving credit lines (several related agreements on the revolving and (or) non-revolving credit lines) (hereinafter – the Credit 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. The Creditor shall provide the Borrower with monetary funds in Russian rubles, in US dollars and in Euros;

2. The aggregate amount of debt (the maximum possible amount of debt) shall not exceed 20,000,000,000 (Twenty billion) rubles or the equivalent of this amount in US dollars or Euros at the exchange rate of the Bank of Russia as of the date of financing provision;

3. The credit shall be provided in the form of individual credits under the Credit agreement;

4. Each individual credit shall be provided for the period not exceeding 12 (Twelve) months;

5. The credits shall be provided to the Borrower within the period not exceeding 12 (Twelve) months from the date of conclusion of the Credit agreement;

6. The interest rate for the credits use including charges shall not exceed 35 (Thirty five) percent per annum;

7. The terms and procedure of granting and repayment of the credit amounts, interest and other penalties shall be determined by the Credit 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 Credit 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”.

Item 15.3 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 agreement on the opening of the revolving/non-revolving credit line and (or) the General agreement on the opening of the revolving framework 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. Within the Agreements the Creditor and the Borrower shall execute separate credit transactions (hereinafter – the Credit transactions) by signing confirmations containing essentials of the Credit transaction;

2. The total credit limit under the Agreement shall not exceed 10,000,000,000 (Ten billion) rubles;

3. The validity period of the credit limit under the Agreement shall not exceed 5 (Five) years;

4. The term of the credit under any Credit transaction shall not exceed 48 (Forty eight) months;

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

6. The rate for reservation for each Credit transaction shall not exceed 0.35 (Zero point three five) percent of the Credit transaction amount;

7. 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”.

Item 15.4 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:

“To approve the JSC “Tander” charter in a new edition “.

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 Securities Identification Number (ISIN) RU000A0JKQU8.

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Company description:

Public Joint Stock Company “Magnit” is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of September 30, 2016, Magnit operated 33 distribution centers and 13,364 stores (10,138 convenience, 407 hypermarkets and 2,819 drogerie stores) in 2,436 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the reviewed IFRS consolidated financial statements 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 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.