17 Aug 2020 07:29
NEITHER THIS ANNOUNCEMENT NOR THE INFORMATION CONTAINED HEREIN IS FOR PUBLICATION, DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR TO ANY PERSON IN ANY OF THOSE JURISDICTIONS OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION
Press Release 17 August 2020
PJSC Polyus
Consolidation of Lenzoloto assets
PJSC Polyus (LSE, MOEX - PLZL) ("Polyus", the "Company") and its wholly-owned subsidiary JSC Polyus Krasnoyarsk ("Polyus Krasnoyarsk") announce that, as part of consolidation of the Polyus group's assets, Polyus Krasnoyarsk intends to offer eligible holders of ordinary and preferred shares of PJSC Lenzoloto (MOEX - LNZL) ("Lenzoloto"), an indirect subsidiary of the Company, to either sell their shares in Lenzoloto to Polyus Krasnoyarsk for cash or to exchange them for ordinary shares of Polyus (the "Offer"), in each case subject to certain exceptions and requirements to be set out in the terms and conditions of the Offer.
The purpose of the Offer is to provide Lenzoloto minority shareholders with an access to a more liquid equity instrument as well as to streamline Polyus's corporate structure and reduce administrative costs at Lenzoloto.
The Offer will be conditional on the approval by the extraordinary general shareholders' meeting of Lenzoloto ("EGM"), which is scheduled for 21 September 2020, of the sale and transfer by Lenzoloto of 94.4% of shares in JSC GMC Lenzoloto ("GMC Lenzoloto"), a subsidiary of Lenzoloto and an indirect subsidiary of Polyus Krasnoyarsk and Polyus, to Polyus Krasnoyarsk, as a result of which Polyus Krasnoyarsk would acquire and directly own 100% of shares in GMC Lenzoloto, for the total purchase price of RUB 19,899,726,000. The price payable for the GMC Lenzoloto shares in the transaction is equal to the market value of such shares determined by an independent appraiser. The sale of GMC Lenzoloto is subject to approval by a majority of disinterested minority shareholders of Lenzoloto present at the EGM. If the sale is approved, holders of Lenzoloto ordinary shares, who vote against or do not participate in voting on the matter, will be entitled to submit their shares for redemption by Lenzoloto at a price of RUB 19,567, which is the higher of the price of one Lenzoloto ordinary share determined by an independent appraiser and the volume weighted average price of Lenzoloto ordinary shares on the Moscow Exchange for six months preceding the date of convocation of the EGM. The amount of funds that can be spent by Lenzoloto on such redemption may not exceed 10% of Lenzoloto's net assets value.
Lenzoloto shareholders that elect to tender their Lenzoloto shares in the Offer will be entitled, subject to certain requirements of the terms and conditions of the Offer, to elect to receive either (1) ordinary shares of Polyus in the amount determined pursuant to the terms of the Offer ("Equity Conversion"), or (2) cash at a price of RUB 19,567 per one ordinary share of Lenzoloto, which is equal to the redemption price payable by Lenzoloto, and RUB 3,607 per one preferred share of Lenzoloto, or (3) a combination of the ordinary shares of Polyus and cash, pursuant to the terms of the Offer, provided that where application of the exchange ratio in the Equity Conversion or the combined option results in a fractional Polyus share, Lenzoloto shareholders electing to receive Polyus shares will receive a whole number of Polyus shares calculated using the relevant exchange ratio and an amount in cash in lieu of any fractional entitlement, calculated pro-rata to the respective price of the Polyus share.
The Offer, when made and if and when it becomes effective, will remain open until 21 December 2020.
The cash price payable for Lenzoloto ordinary and preferred shares in the Offer was determined based on the market value of such shares determined by an independent appraiser. The Offer price for one ordinary share of Lenzoloto represents a 100% premium to the volume weighted average price of Lenzoloto ordinary shares on the Moscow Exchange for the six-months period preceding the date of this announcement, and the Offer price for one preferred share of Lenzoloto represents a 7% discount to the volume weighted average price of Lenzoloto preferred shares on the Moscow Exchange for the six-months period preceding the date of this announcement.
The number of Polyus shares to be transferred to Lenzoloto shareholders electing Equity Conversion will be determined using exchange ratios for ordinary and preferred shares of Lenzoloto, which will be calculated based on the price of RUB 19,567 per one ordinary or RUB 3,607 per one preferred share of Lenzoloto, and the market price of one Polyus ordinary share calculated as volume weighted average price per one Polyus share on the Moscow Exchange for three consecutive business days, including two business days immediately preceding each of 05 November 2020, 30 November 2020 and 21 December 2020 (each, a "Record Date") and each such Record Date, less a 5% discount, provided that exchange ratios so determined will not in any event exceed a maximum of 1.26x and 0.23x for ordinary and preferred shares of Lenzoloto, respectively. The number of Polyus shares that may be transferred to Lenzoloto shareholders if all Lenzoloto shareholders elect to participate in the Offer and elect the Equity Conversion shall constitute approx. up to 0.2% of total number of Polyus shares.
Settlements with Lenzoloto shareholders who elect to receive the purchase price for Lenzoloto shares in cash will be carried out throughout the term of the Offer, as will be detailed in the Offer. Polyus Krasnoyarsk will be accepting, executing and settling applications of Lenzoloto shareholders electing the Equity Conversion and combined settlement option within the time frame that will be set forth in the Offer following each respective Record Date, in each case subject to receipt of Lenzoloto shares from Lenzoloto shareholders.
The Polyus shares that will be used in the Offer are not and will not be registered under the United States securities laws and will be transferred outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and within the United States to "qualified institutional buyers" (as defined in Rule 144A under the U.S. Securities Act). EACH HOLDER OF LENZOLOTO SHARES THAT WILL ELECT TO SELL ITS LENZOLOTO SHARES FULLY OR PARTIALLY IN EXCHANGE FOR POLYUS SHARES WILL BE DEEMED TO MAKE THE ACKNOWLEDGEMENTS, REPRESENTATIONS AND AGREEMENTS THAT WILL BE SET FORTH IN THE OFFER. HOLDERS OF LENZOLOTO SHARES THAT WILL BE UNABLE TO MAKE THE ACKNOWLEDGEMENTS, REPRESENTATIONS AND AGREEMENTS THAT WILL BE SET FORTH IN THE OFFER WILL NOT BE ENTITLED TO RECEIVE POLYUS SHARES AND WILL ONLY BE ENTITLED TO SELL THEIR LENZOLOTO SHARES FOR CASH. In particular, a Lenzoloto shareholder that is a resident of, or is registered in, the United States of America, will not be eligible to receive Polyus shares if it is not a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act).
Polyus currently owns 953,532 Lenzoloto ordinary shares, representing 83.62% of Lenzoloto outstanding ordinary shares.
It is expected that following completion of the Offer Polyus Krasnoyarsk will consolidate GMC Lenzoloto, and Lenzoloto will distribute the entire remaining amount of cash on its balance sheet, including proceeds from the transaction (less cash reserved for maintenance of the legal structure), in the form of dividend in 2021. Subsequently, Lenzloto may be liquidated, subject to receipt of all necessary corporate approvals.
The Offer described in this announcement will be subject to certain conditions, including the approval of the sale of GMC Lenzoloto by Lenzoloto shareholders at the EGM, and there can be no assurances that such approval will be obtained or other conditions satisfied. This announcement is not an offer of, or a solicitation to make offers for, any securities The terms of the Offer will be contained in a memorandum or similar document, which is expected to be published or otherwise disseminated by Polyus Krasnoyarsk in due course prior to the date of the EGM. Lenzoloto shareholders wishing to participate in the Offer are urged to evaluate carefully all information in the relevant memorandum or document containing the terms of the Offer, when it becomes available, and other related materials, consult their own investment, legal and tax advisers and make their own decisions whether to participate in the Offer.
Polyus
Polyus is the largest gold producer in Russia and one of the top 5 gold miners globally with the lowest cost position. At the time of reporting, the Polyus group's 2019 Ore Reserves estimates rank third by attributable gold reserves among the world's largest gold mining companies.
The Polyus group's principal operations are located in Krasnoyarsk, Irkutsk and Magadan regions and the Republic of Sakha (Yakutia).
Enquiries
Investor and Media contact
Victor Drozdov, Director
Communications & Investor Relations (CIR) Department
+7 (495) 641 33 77
drozdovvi@polyus.com
Forward looking statement
This announcement may contain "forward-looking statements" concerning Polyus and/or Polyus group. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus' and/or Polyus group's operations. Many of these risks and uncertainties relate to factors that are beyond Polyus' and/or Polyus group's ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.
IMPORTANT NOTICE
NEITHER THIS ANNOUNCEMENT NOR THE INFORMATION CONTAINED HEREIN IS FOR PUBLICATION, DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR TO ANY PERSON IN ANY OF THOSE JURISDICTIONS OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION.
Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions), Canada, Australia, Japan, South Africa or to any person in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The offer of shares and the distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement or any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Canada, Australia, Japan, South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.
The securities to which this announcement relates have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any regulating authority or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States or to U.S. persons unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. There will be no public offer of the securities in the United States. The securities referred to herein have not been registered under the applicable securities laws of Canada, Australia, Japan or South Africa and, subject to certain exceptions, may not be offered or sold within Canada, Australia, Japan or South Africa or to any national, resident or citizen of Canada, Australia, Japan or South Africa.
In member states of the European Economic Area and in the United Kingdom, this announcement and any offer, if made subsequently, is sent and addressed to and directed only at persons who are "qualified investors" within the meaning of the Prospectus Regulation (Regulation 2017/1129/EU, as amended or superseded) ("Qualified Investors"). In the United Kingdom this announcement is sent and distributed to and directed exclusively at Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) who fall within Article 49(2)(A) to (D) of the Order, or (iii) to whom it may otherwise lawfully be communicated, and the shares will only be available to, and any investment activity to which this announcement relates will only be engaged in with, such persons and it should not be relied on by anyone other than such persons.