PLZL.L Regulatory News (PLZL)

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

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") to be published by Polyus (as defined below) in due course in connection with the proposed admission of Level I American depositary shares and global depositary shares, in each case representing Polyus' ordinary shares, to the Official List of the UK Listing Authority (the "UKLA") and to trading on the Main Market of the London Stock Exchange plc (the "London Stock Exchange") (together, the "Admission"). A copy of the Prospectus will, following its publication, be available at its registered office and on Polyus' website (www.polyus.com), subject to applicable securities laws.

30 June 2017

Public Joint Stock Company Polyus

("Polyus" or the "Company" and, together with its subsidiaries, the "Group")

Polyus Prices Offering on the London Stock Exchange and the Moscow Exchange

Following its announcement on 15 June 2017 regarding its indicative price range for its offering on the London Stock Exchange and the Moscow Exchange, Polyus, the 8th largest gold producer globally with the second largest reserve base and the lowest cost position among the top-10 largest gold mining companies globally, today announces the price for the Offering (as defined below).

Offering Highlights:

· The offer price has been set at US$33.25 per global depositary receipt (the "GDS"), corresponding to a price of US$66.50 per ordinary share of the Company with a nominal value of 1.00 rouble (each, a "Share") (the "Offer Price"), with two GDSs representing an interest in one Share.

· The total size of the Offering is US$879 million, including the over-allotment option, or US$799 million, excluding the over-allotment option.

· This will result in a market capitalisation of US$8,882 million on a post-money fully-diluted basis (including treasury shares).

· The Offering (including the over-allotment option) will increase the free float in the share capital of the Company from 6.76% to 16.4% on a post-money fully-diluted basis.

· The Shares may be paid for in US$ or in roubles at the official Central Bank of the Russian Federation RUB/US$ exchange rate of 59.0855 effective on 30 June 2017.

· The offering comprises an offering by Polyus Gold International Limited ("PGIL") of 6,005,404 Shares and by Polyus Gold plc ("Polyus Gold"), a subsidiary of PGIL, of 5,915,979 Shares, in each case in the form of Shares and GDSs. Also in connection with the Offering, Polyus PJSC expects to issue 6,015,038 new Shares in the open subscription.

· The Offering comprises total number of 12,020,442 Shares (in the form of Shares and GDSs) which equates to 9.0% of the issued share capital of the Company, inclusive of $400 million of primary proceeds (6,015,038 Shares) and with US$399 million as secondary (6,005,404 Shares), excluding the Over-allotment Option (as defined below).

· The Offering includes an offering of Shares in Russia and an offering of Shares and GDSs representing such Shares to institutional investors internationally, outside the US in reliance on Regulation S and within the US to certain qualified institutional buyers in reliance on Rule 144A.

· In connection with the Offering, PGIL has granted to Goldman Sachs International as stabilizing manager an option (the "Over-allotment Option"), exercisable at the Offer Price within 30 days after the announcement of the Offer Price, to purchase up to 1,202,044 additional Shares or GDSs representing up to 10% of the securities sold in the Offering solely to cover over-allotments, if any, in the Offering.

· In connection with the Offering, the Company has approved for issuance 28,594,162 newly-issued Shares (each, a "New Share") to be placed through an open subscription under Russian law (the "Open Subscription"). Holders of Shares as of 26 December 2016 (the "Record Date") had statutory pre-emptive rights to subscribe for the New Shares pro rata to their holdings of existing Shares on the Record Date. The Company has received applications from eligible shareholders of the Company (other than PGIL, which held 116,999,862 existing Shares on the Record Date) to subscribe in aggregate for 1,046 New Shares (the "Pre-emption Shares") at the Offer Price. In addition to the Pre-emption Shares, the Company is offering in the Open Subscription (i) 98,809 New Shares through the facilities of Public Joint Stock Company "Moscow Exchange MICEX-RTS", a part of the Moscow Exchange Group to certain Russian institutional investors and other investors at the Offer Price and 250 New Shares subscribed for by an investor outside of the facilities of MOEX and (ii) 5,915,979 New Shares at the Offer Price to Polyus Gold pursuant to a subscription application submitted by Polyus Gold.

· Additionally, in connection with the Offering, PGIL concluded a securities lending agreement with Polyus Gold dated 30 June 2017 (the "Securities Lending Agreement"), pursuant to which PGIL has loaned 5,915,979 Shares to Polyus Gold in order to allow Polyus Gold to sell Shares and GDSs in the Offering. Polyus Gold has committed to use all proceeds it receives in the Offering to subscribe for New Shares in the Open Subscription (the "Committed Shares"), and consequently the Company has received an application from Polyus Gold to subscribe for the Committed Shares. Pursuant to the Securities Lending Agreement, following completion of the Offering, Polyus Gold will deliver the Committed Shares acquired by it to PGIL in satisfaction of Polyus Gold's obligations under the Securities Lending Agreement.

· The Company intends to use the proceeds from the issuance of the New Shares to repay a portion of the Group's outstanding indebtedness; finance the operating activities and development projects of the Group; finance capital expenditure; and for other general corporate purposes of the Group.

· Conditional trading in the GDSs on the main market for listed securities of the London Stock Exchange plc (the "LSE") through its International Order Book (regulated market segment) (the "IOB") is expected to commence at 8:00 am (London time) on 30 June 2017 under the symbol "PLZL". Admission to the official List maintained by the United Kingdom Financial Conduct Authority is expected to become effective, and unconditional trading in the GDSs on the LSE through the IOB are expected at 8:00 am (London time) on 5 July 2017.

· Following the Offering, PGIL and Polyus Gold will be subject to a lock-up in respect of Shares for a period of 180 days.

Goldman Sachs International, J.P. Morgan, Sberbank CIB and VTB Capital are acting as Joint Global Coordinators and Joint Bookrunners and BMO Capital Markets, Gazprombank and Morgan Stanley are acting as Joint Bookrunners.

Pavel Grachev, Polyus's Chief Executive Officer, commented:

"We are most pleased with the level of support and interest Polyus has received from the investment community. I am delighted to welcome our new shareholders onto the register, who comprise a broad range of investors. We had nearly 100 investment funds participating in the transaction, representing some of the largest names on the market, including emerging markets and sector specialists.

The Company remains narrowly focused on the shareholder value creation and is well placed to build on its position as one of the largest and lowest cost producers of gold globally with a clear strategy for long term, sustainable growth and an attractive dividend profile."

Update to the Preliminary Prospectus

On 7 June 2017, 68 countries and jurisdictions, including the Russian Federation, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the "Multilateral Convention"). The Multilateral Convention sets forth additional requirements for the purposes of application of the reduced tax rates on dividend payments (for example, in certain cases a minimum holding period of shares may be introduced). Currently, it is not entirely clear how each individual double tax treaty to which the Russian Federation is a party will be affected by the Multilateral Convention with respect to the taxation of dividends. However, it is likely that additional requirements for the application of double tax treaties might be introduced. In some cases, it is possible that the Multilateral Convention may no longer allow the application of reduced withholding tax rates to dividends paid on the Shares and GDSs, where such reduced rates might have been applicable previously. Consequently, there is a risk that upon payment of dividends on the Shares and GDSs, the Russian tax agents might apply the Russian income tax withholding at the standard tax rate of 15 per cent for non-resident holders.

Polyus Enquiries: 

Investor Contact

Victor Drozdov, Director Investor Relations

+7 (495) 641 33 77 drozdovvi@polyus.com 

Media contact

Victoria Vasilyeva, Director Public Relations

+7 (495) 641 33 77 vasilevavs@polyus.com 

Important Notice

The information contained in this announcement is for background purposes only and does not purport to be full or complete. It is also subject to change. Before subscribing for or purchasing any Shares or GDSs, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The value of the Shares and GDSs and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. The price and value of securities can go down as well as up, and investors may get back less than they invested or nothing at all. Potential investors should consult an independent financial advisor as to the suitability of the securities referred to in this advertisement for the person concerned.

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 GDSs pursuant to the Offering 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 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 any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") other than the United Kingdom, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive ("Qualified Investors").

This announcement is only addressed to and directed at qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC as amended, including by Directive 2010/73/EC) ("Qualified Investors") in the United Kingdom who (i) are persons 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"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) are persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

This announcement is not, and under no circumstances is to be construed as, a public offer or advertising or an invitation to make offers to sell, purchase, exchange or otherwise transfer or dispose of any securities, including securities of foreign issuers, or other financial instruments in the Russian Federation within the meaning of Russian securities laws or to or for the benefit of any persons or entities resident, incorporated, established or having their usual residence in the Russian Federation, or to or for the benefit of any person located within the territory of the Russian Federation, who, in respect of depositary shares, is not a "qualified investor" within the meaning of Article 51.2 of the Russian Federal Law "On the Securities Market" No. 39-FZ dated 22 April 1996, as amended, and must not be distributed or circulated into the Russian Federation or made available in the Russian Federation, to any persons who are not qualified investors, unless and to the extent the recipients are otherwise permitted to access such information under Russian law. The depositary shares referred to in this announcement have not been registered in Russia or admitted to placement and/or public circulation in the Russian Federation and the information contained in this announcement is not to be made publicly available in the Russian Federation or passed on to third parties in the Russian Federation, unless otherwise permitted under Russian law. The securities are not intended for "offering", "placement" or "circulation" (each as defined in Russian securities laws) in the Russian Federation, except as permitted by Russian law.

Goldman Sachs International, J.P. Morgan Securities plc, VTB Capital plc, Morgan Stanley & Co. International plc and BMO Capital Markets Limited are each authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, JSC Sberbank CIB is authorised and regulated by the Central Bank of Russia, SIB (Cyprus) Limited is authorised and regulated by the Cyprus Securities and Exchange Commission and Bank GPB International S.A. is authorised and regulated by the Commission de Surveillance du Secteur Financier of Luxembourg (each a "Manager" and collectively the "Managers").

The Managers are acting exclusively for the Company and no one else in connection with the Offering and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to its client nor for providing advice in relation to the proposed Offering.

In connection with the Offering, each of the Managers or any of their respective affiliates, acting as investors for their own account(s), may subscribe for or purchase Shares and GDSs and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for its or their own accounts in such Shares and GDSs and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the Prospectus, once published, to the Shares and GDSs being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, each of the Managers or any of their respective affiliates acting as an investor for its or their own account(s). None of the Managers or any of their respective affiliates intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Managers or any of their respective subsidiary undertakings, affiliates or any of their respective directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever, or makes any representation or warranty, express or implied, for the contents of this announcement, including its truth, accuracy, completeness, verification or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Selling Shareholders, the Company and each of their respective subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offering, a stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, effect transactions with a view to supporting the market price of the Shares and GDSs at a higher level than that which might otherwise prevail in the open market. The stabilising manager will not be required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the announcement of the Offer Price and ending no later than 30 calendar days thereafter. However, there will be no obligation on the stabilising manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares and GDSs above the offer price. Save as required by law or regulation, neither the stabilising manager nor any of its agents intends to disclose the stabilisation transactions conducted in relation to the Offering.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. All information presented or contained in this announcement is subject to verification, correction, completion and change without notice. However, the Company does not undertake to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies.

The GDSs have not been and will not be registered in Japan pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the "FIEA") in reliance upon the exemption from the registration requirements since the offering constitutes the small number private placement as provided for in "ha" of Article 2, Paragraph 4, Item 2 of the FIEA.

Forward-looking statements

Certain statements contained in this announcement, including any information as to the Company's strategy, plans or future financial or operating performance constitute "forward looking statements". These forward-looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "aims", "plans", "predicts", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors of the Company concerning, amongst other things, the Company's results of operations, financial condition and performance, prospects, growth and strategies and the industry in which the Company operates.

By their nature, forward looking statements address matters that involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward looking statements are not guarantees of future performance and the Company's actual results of operations and financial condition, and the development of the business sector in which the Company operates, may differ materially from those suggested by the forward looking statements contained in this announcement.

In addition, even if the Company's results of operations and financial condition, and the development of the industry in which the Company operates, are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.

The forward-looking statements contained in this announcement speak only as of the date of this announcement. The Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward- looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law.