MGNT.L Regulatory News (MGNT)

PJSC MAGNIT - BoD Meeting Results

PR Newswire

London, September 30

Press Release

Krasnodar

September 30, 2016

Magnit Announces the Results of the BOD Meeting

Krasnodar, Russia (September 30, 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 September 29, 2016 the Company held the BOD meeting (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of September 29, 2016).

The meeting agenda:

Determination of PJSC “Magnit” business priorities.

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.

Determination of the position of the PJSC "Magnit" representative at the exercise of the voting right on the Retail Import LLC shares in the charter capital 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 – 3:

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.

Content of the decisions and voting results:

Item 1 on the agenda:

“To determine PJSC “Magnit” business priorities by means of ratification of the Company’s Plan of financial and economic activity for the fourth quarter of 2016”.

Item 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 “Sberbank of Russia” (hereinafter – the Creditor) of 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:

The Creditor shall open the revolving framework credit line for the Borrower. Under the Agreement 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 transactions;

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

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

4. The credit term under any Credit transaction shall not exceed 365 (Three hundred and sixty five) calendar days;

5. The maximum interest rate for the credit use shall not exceed 35 (Thirty five) percent per annum. The Creditor has a right to unilaterally increase/decrease the maximum interest rate under the Agreement and/or under the Credit transactions (with regard to the current maximum interest rate determined by the Agreement,), in particular, but not as a limitation thereof, due to the decision of the Bank of Russia on the increase/decrease of the key rate and/or the refinancing rate (discount rate);

6. 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 3.1 on the agenda:

“To recommend the sole executive body of PJSC “Magnit”, which is the sole shareholder of Retail Import LLC to make the following decision at the exercise of the voting right on shares in the charter capital of Retail Import LLC owned by the Company:

“To approve the future conclusion of the major transaction – Bank guarantee agreement (hereinafter – the Agreement) with the following essentials between Retail Import LLC (hereinafter – the Client) and Public Joint Stock Company ROSBANK (hereinafter – the Bank):

1. At the Client’s request the Bank shall provide the bank guarantees (hereinafter – the Guarantees) pursuant to the terms and procedures set forth in the Agreement, and the Client shall reimburse all amounts paid by the Bank under or in connection with the Agreement, pay fees to the Bank and fulfill other obligations under the Agreement in full.

2. The maximum total amount of Guarantees shall not exceed 1,000,000,000 (One billion) rubles;

3. The period of Guarantees issu under the Agreement - until 01.02.2017;

4. The Guarantee validity period shall not exceed 12 months from the effective date of the Guarantee and shall not end on the date later than February 1, 2018 (inclusive);

5. The Client shall pay the fee to the Bank for the obligation on each provided Guarantee at the rate in percent per annum which shall not exceed 10 (ten) percent per annum of the provided Guarantee amount;

6. The Agreement shall determine the terms, procedure of the Guarantees issue, the amount of a fee for the Guarantee issue, amendment fee and the amount of liability of the Client for the nonfulfillment or improper fulfillment of obligations;

7. The Agreement shall become effective as of the date of its execution and shall remain in force until full and proper fulfillment of obligations under the Agreement by the Client.

Hereby to provide the Chief Executive Officer of Retail Import LLC 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 maximum Guarantees amount, the period of Guarantees issue, the Guarantees validity period, the fee amount within the limits hereof”.

Item 3.2 on the agenda:

“To recommend the sole executive body of PJSC “Magnit”, which is the sole shareholder of Retail Import LLC to make the following decision at the exercise of the voting right on shares in the charter capital of Retail Import LLC owned by the Company:

 “To approve the future conclusion of the major transaction – General bank guarantee agreement (hereinafter – the Agreement) with the following essentials between Retail Import LLC (hereinafter – the Principal) and VTB Bank (Public Joint Stock Company (hereinafter – the Guarantor):

1. The Agreement shall regulate the legal relationship between the parties related to the issue/modification of terms of irrevocable bank guarantees in rubles (hereinafter – the Guarantee/Guarantees), reimbursement of amounts paid by the Guarantor under Guarantees arising in case of the Guarantee provision, modification of terms of the issued Guarantee under the terms and conditions specified in the Agreement, and the fulfillment of the obligations related to the Guarantees issue under the Agreement. The Guarantee shall be issued by means of acceptance by the Guarantor of the Offer provided by the Principal and containing all terms of the Guarantee and conditions of its issuance;

2. The maximum aggregate amount of the Guarantees shall not exceed 1,000,000,000 (One billion) rubles;

3. The period of Guarantees issue under the Agreement - until 01.05.2018;

4. The Guarantee validity period shall not exceed 365 (Three hundred and sixty five) calendar days from the date of the Guarantee issue (with regard to the Guarantee prolongation);

5. The Principal shall pay a fee for the issue of each Guarantee to the Guarantor in the amount not exceeding 5 (five) percent per annum of the Guarantee amount, but not less than 400 US dollars for the whole validity period of each Guarantee, and also in case of amendments to the Guarantee terms, a fee in the amount not exceeding 250 US dollars for each amendment. In case if the Principal maintains credit turnover in the amount which is less than the amount determined by the Agreement, the amount of a fee for the Guarantee issue may be increased, but not more than by 1/5 (One fifth) of the fee amount set forth in the Offer;

6. In case of the late reimbursement of the amount of payment under the Guarantee to the Guarantor by the Principal, the Principal shall pay the fee (penalty) to the Guarantor at the rate of 34 (Thirty four) percent per annum for the period from the date of payment under the Guarantee until the date of full and final reimbursement of such amount to the Guarantor;

7. The Agreement shall determine the terms, procedure of the Guarantees issue, the amount of liability of the Principal for the nonfulfillment or improper fulfillment of obligations;

8. The Agreement shall become effective as of the date of its execution and shall remain in force until full and proper fulfillment of obligations under the Agreement by the Principal.

Hereby to provide the Chief Executive Officer of Retail Import LLC 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 maximum Guarantees amount, the period of Guarantees issue, the Guarantees validity period, the compensation amounts within the limits hereof”.

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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 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 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.