MGNT.L Regulatory News (MGNT)

PJSC MAGNIT - Results of BoD Meeting

PR Newswire

London, May 30

Press-release

Krasnodar

May 30, 2017

Magnit Announces the Results of the BOD Meeting

Krasnodar, May 30, 2017: 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 held on May 29, 2017.

Please be informed that on May 29, 2017 the BOD meeting was held (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of May 29, 2017).

The meeting agenda:

Making a decision for approval of the execution of major transactions.

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: K. Pombukhchan, V. Gordeychuk, S. Galitskiy 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 ofA. 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:

A. Aleksandrov - “for”, S. Galitskiy – “for”, V. Gordeychuk – “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 approve the execution of the major transaction – the guarantee agreement which PJSC “Magnit” (hereinafter – the Guarantor) plans to execute in future with Public Joint Stock Company ROSBANK (hereinafter – the Creditor) as a security for obligations of Joint Stock Company “Tander” (beneficiary) (hereinafter – the Borrower) to the Creditor under the agreements on the revolving and (or) non-revolving credit lines (hereinafter – the Credit agreements), which the Borrower plans to execute in future, with the following essentials:

1. The Guarantee agreement shall secure the fulfillment of obligations by the Borrower under the Credit agreements concluded with the Creditor with the following essentials:

1.1. the Creditor shall provide the Borrower with monetary funds in Russian rubles, in US dollars and in Euros;

1.2. the aggregate debt limit (maximum possible amount of debt under the principal debt) under the Credit agreement No. KRD/RK/008/16 of 11.11.2016 previously concluded between the Creditor and the Borrower and the new Credit agreements on any day within the validity period of these agreements shall not exceed 27,000,000,000 (Twenty seven 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;

1.3. the credit shall be provided in the form of individual credits under the Credit agreements. The terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the Credit agreements;

1.4. the final repayment date under any Credit agreement shall not be later than in 12 (Twelve) months from the date of signing the corresponding Credit agreement;

1.5. each individual credit under any Credit agreement shall be provided for the period not exceeding 12 (Twelve) months;

1.6. the interest rate for the credits use under the Credit agreements shall be determined by the Borrower and the Creditor according to the procedure specified in the Credit agreements, and the interest rate (adjusted for the increase of the interest rate amount allowed by the Credit agreements at the discretion of the Creditor) shall not exceed 30% (Thirty) percent per annum.

2. The Guarantor shall be solidarily liable for the Borrower’ obligations incurred from the Credit agreements (including obligations which may incur in future), or related to them, including, but not limited to, the obligations to pay the principal debt amount, interest, any other charges, fees and refunds, including, if applicable, the reimbursement (payment) of documented expenses, and interest, forfeit (penalties) of the Creditor incurred due to the protection and observance of the Creditor’s rights under the Credit agreements and/or the delay in fulfillment.

The guarantee also ensures the repayment (or reimbursement) of funds payable to the Creditor according to the Credit agreement, as well as related to the interest payment arising by operation of law, if the Credit agreement or any of its provisions is acknowledged invalid (including, if applicable, claims for reimbursement, arising out of the Article 167 and/or Chapter 60 of the Civil Code of the Russian Federation).

In any case, the maximum price (amount) of all obligations of the Guarantor under the guarantee agreement, including for the guarantees issued by the Guarantor for the obligations of the Borrower under the Credit agreements, shall not exceed 35,100,000,000 (Thirty five billion one hundred million) rubles.

3. The validity period of the guarantee agreement shall not exceed 3 (three) years from the date of conclusion of the guarantee agreement.

The price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the guarantee agreement, can comprise 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.

Hereby to provide the Chief Executive Officer of PJSC “Magnit” (person authorized by him by a letter of attorney) with the right to sign the guarantee agreement with the essentials specified above, and additional agreements to it related to the change of terms and conditions of the guarantee agreement (several related guarantee agreements) due to the change of terms and conditions of the Credit agreements, including but not limited to the change of the interest rates, the credit amount and the period of the credit provision within the limits hereof”.

Item 2.1 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 realization of the voting right on JSC “Tander” shares owned by PJSC “Magnit”:

“1. To approve the annual report, annual accounting statements of JSC “Tander” for 2016, and the following allocation of JSC “Tander” profit following the 2016 reporting year results:

1.1. To pay dividends on ordinary certified shares of JSC “Tander” in the amount of 32,500,000,000 (Thirty two billion five hundred million) rubles, which accounts for 3.25 rubles (Three rubles twenty five kopecks) per ordinary share.

Payment of dividends shall be executed as follows:

a. to pay dividends in monetary funds;

b. to pay dividends in accordance with the procedure and within the time limit established by the legislation of the Russian Federation;

c. To appoint the following dividend record date: June 15, 2017.

1.2. Not to pay the remuneration to the members of the Revision Commission of JSC “Tander”.

1.3. To leave the remaining part of the net profit unallocated.

2. To elect the following candidates to the Revision commission of JSC “Tander”:

Roman Efimenko;

Irina Tsyplenkova;

Vitaliy Kalashnikov.

3. To approve the Limited Liability Company Audit firm “Faber Leks” (Taxpayer Id. Number 2308052975, location: 144/2 Krasnykn Partizan street, Krasnodar, 350049, Krasnodar region) as the auditor of JSC “Tander” in accordance with the Russian accounting standards.

4. To determine remuneration for the services of the auditor in accordance with the Russian Accounting Standards for the conduction of the audit of the JSC “Tander” accounting (financial) reports for the year 2017 in the amount of not more than 5,700,000 (five million seven hundred thousand) rubles excl. VAT”.

Item 2.2 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 realization of the voting right on JSC “Tander” shares owned by PJSC “Magnit”:

“Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion of the two General agreements on the opening of the revolving framework credit line with the tiered interest rates (hereinafter – the Agreements) by JSC “Tander” (hereinafter – the Borrower), which the Borrower plans to execute in future with Public Joint Stock Company “Sberbank of Russia” (hereinafter – the Creditor), and which are related to acquisition, disposal and possible direct or indirect company's disposal of the property, the cost of which amounts to 5 and more percent 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 consolidated statements 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 transaction (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 30,000,000,000 (Thirty billion) rubles;

3. the validity period of the credit limit under each Agreement 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 amount of fee for the provision under each Credit transaction shall not exceed 0.35 (Zero point three five) percent of the Credit transaction amount;

7. the terms, procedure of provision and repayment of credit amounts, interest and other payments shall be determined by the Agreements.

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 Agreements, 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 2.3 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 realization of the voting right on JSC “Tander” shares owned by PJSC “Magnit”:

“Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion 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 agreements) by JSC “Tander” (hereinafter – the Borrower), which the Borrower plans to execute in future with Public Joint Stock Company ROSBANK (hereinafter – the Creditor) as transactions related to acquisition, disposal and possible direct or indirect Borrower's disposal of the property, the cost of which amounts to 5 and more percent of the balance sheet value of assets of the company, its subsidiaries, the principal company (in relation to which the Borrower is a subsidiary), as well as other subsidiaries of the principal company (the “Group”), determined on the basis of the latest available consolidated statements 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 debt limit (maximum possible amount of debt under the principal debt) under the Credit agreement No. KRD/RK/008/16 of 11.11.2016 previously concluded between the Creditor and the Borrower and the new Credit agreements on any day within the validity period of these agreements shall not exceed 27,000,000,000 (Twenty seven 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 agreements. The terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the Credit agreements;

4. the final repayment date under any Credit agreement shall not be later than in 12 (Twelve) months from the date of signing the corresponding Credit agreement;

5. each individual credit under any Credit agreement shall be provided for the period not exceeding 12 (Twelve) months;

6. the interest rate for the use of credits under the Credit agreements shall be determined by the Borrower and the Creditor according to the procedure specified in the Credit agreements, and the amount of the interest rate (adjusted for the increase of the interest rate amount allowed by the Credit agreements at the discretion of the Creditor) shall not exceed 30% (Thirty) percent per annum.

Hereby to provide the Chief Executive Officer of JSC “Jander” (JSC “Tander” representative by a power of attorney) with the right to sign the additional agreements which change the terms and conditions of the Credit agreements and which are related to (including but not limited to) the change of the interest rates, the credit amount and the period of the credit provision within the limits hereof”.

Item 2.4 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 realization of the voting right on JSC “Tander” shares owned by PJSC “Magnit”:

“Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion of the additional agreement to the Agreement No.17939-KRD of 07.09.2016 on the terms and procedure of opening of the outstanding limit facility (hereinafter – the Agreement) between JSC “Tander” (hereinafter – the Borrower) and Joint Stock Company “Raiffeisenbank” (hereinafter – the Creditor), which is related to acquisition, disposal and possible direct or indirect company's disposal of the property, the cost of which amounts to 5 and more percent 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 consolidated statements of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

1. the Agreement defines the general terms and procedure of monetary funds provision within the credit line (maximum amount of credits which can be provided under the Agreement);

2. the aggregate date amount (the debt limit) shall not exceed 30,000,000,000 (Thirty billion) rubles;

3. the Creditor shall be entitled to provide credits within the period starting from the date of the Agreement conclusion and ending not later than September 30, 2019 inclusive (availability period);

4. the Borrower’s obligations for the repayment of credits provided within the credit line shall be fulfilled not later than October 1, 2019 inclusive (repayment date);

5. the credit amount shall not be less than 50,000,000 (fifty million) Russian rubles. The minimum credit period shall be 1 (One) working day, the maximum credit period – 90 (Ninety) calendar days;

6. the interest rate used for each credit shall not exceed 35 (Thirty five) percent per annum;

7. the terms, procedure of provision and repayment of 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 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 – additional agreement to the Bank guarantee agreement No. KRD/GAR/012/16 of 16.12.2016 (hereinafter – the Agreement) between Retail Import LLC (hereinafter – the Client) and Public Joint Stock Company ROSBANK (hereinafter – the Bank) with the following essentials of the Agreement (as amended by the additional agreement):

1. at the Client’s request the Bank shall provide the bank guarantees (hereinafter – the Guarantees/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 commissions due to the Bank and fulfill other obligations under the Agreement in full.

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

3. the period of Guarantees issue under the Agreement – until June 13, 2018;

4. the validity period of each Guarantee shall not exceed 12 (twelve) months from the effective date of the Guarantee, and shall not expire on the date later than April 30, 2019 (inclusive);

5. the Client shall pay commission to the Bank for the obligation on each issued Guarantee calculated on the basis of the rate in percent per annum which shall not exceed 10 (ten) percent per annum of the issued Guarantee amount;

6. the terms, procedure of the Guarantees issue, amount of the commission for the Guarantee issue, for the amendment of the Guarantee terms, and the amount of liability of the Client for the nonfulfillment and improper fulfillment of obligations shall be determined by the Agreement;

7. the Agreement shall come into effect from the date on which it is signed and remain in effect until all obligations under the Agreement are properly and fully performed 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 amount of the Guarantees, the period of the Guarantees issue, the validity period of the Guarantees, amounts of commissions within the limits hereof”.

For further information, please contact:

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 March 31, 2017, Magnit operated 35 distribution centers and 14,089 stores (10,540 convenience, 427 hypermarkets and 3,122 drogerie stores) in 2,494 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the audited IFRS results for 2016, Magnit had revenues of RUB 1,075 billion and an EBITDA of RUB 108 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.