Press Release
Krasnodar
December 16, 2016
Magnit Announces the Results of the BOD Meeting
Krasnodar, Russia (December 16, 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 December 15, 2016 the Company held the BOD meeting (minutes of the BOD meeting of PJSC "Magnit" are w/o No. of December 15, 2016).
The meeting agenda:
Ratification of the business plan of PJSC "Magnit" Internal audit department for the year 2017.
Approval of the related party 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.
Ratification of the Regulations on the committees of PJSC "Magnit" Board of Directors.
The following BOD members were present: S. Galitskiy, K. Pombukhchan and A. Shkhachemukov.
A. Aleksandrov, V. Gordeichuk, 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, V. Gordeichuk, 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, 3.1-3.3, 4:
A. Aleksandrov - "for", S. Galitskiy - "for", V. Gordeichuk - "for", A. Zayonts - "for", K. Pombukhchan - "for", A. Pshenichniy - "for", A. Shkhachemukov - "for".
The decisions were made.
Items 2.1 - 2.5:
A. Aleksandrov - "for", S. Galitskiy - did not participate in voting, V. Gordeichuk - "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 ratify the business plan of PJSC "Magnit" Internal audit department for the year 2017".
Item 2.1 on the agenda:
"To approve the conclusion of the additional agreement to the real estate lease agreement w/o No. of 01.04.2014, which the Company executed with JSC "Tander" and which is the related party transaction based on the following terms and conditions of the lease agreement including changes introduced by the additional agreement:
Parties of the transaction: Lessor - PJSC "Magnit", Lessee - JSC "Tander".
Subject of the transaction: the Lessor shall provide the following real property to the Lessee for a fee for temporary possession and use: non-residential premises No. 39 with the total space of 31.1 sq. m. and a part of the non-residential premises No. 40 with the space of 22.6 sq. m., located on the 1st floor of the non-residential administrative building with the total space of 8,193.9 sq. m., letter B, B1, number of floors: 6, number of underground floors: 1, located at the following address: 15/5 Solnechnaya street Prikubanskiy district, Krasnodar, Krasnodar region, Russia.
Lease fee: 31,683 (Thirty one thousand six hundred and eighty three) rubles per month including VAT.
Lease period: 360 (Three hundred and sixty) calendar days. In case if neither party declares their intention to terminate the agreement before it expires, upon expiration of its term the agreement shall be considered extended for an indefinite term.
The price (money value) of the Company's property, which can be directly or indirectly disposed by the Company under the lease agreement, amounts to less than 2 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 2.2 on the agenda:
"To approve the conclusion of the additional agreement to the real estate lease agreement w/o No. of 01.04.2014, which the Company executed with JSC "Tander" and which is the related party transaction based on the following terms and conditions of the lease agreement including changes introduced by the additional agreement:
Parties of the transaction: Lessor - PJSC "Magnit", Lessee - JSC "Tander".
Subject of the transaction: the Lessor shall provide the following real property to the Lessee for a fee for temporary possession and use, located at the address: 15/5 Solnechnaya street, Prikubanskiy district, Krasnodar, Krasnodar region, Russia:
- part of the non-residential administrative building, with the total space of 8,193.9 sq. m, letter B, B1, number of floors: 6, number of underground floors: 1, excluding the non-residential premises No. 39 (1st floor, total space of 31.1 sq. m.), part of the non-residential premises No. 40 (1st floor, space of 22.6 sq. m.), non-residential premises No. 26-30 (3rd floor, space of 129.8 sq. m), No. 2, No. 5 (5th floor, space of 49.3 sq. m), the total space of the leased premises is 7,961.1 sq. m;
- boiler house, purpose: non-residential, with the total space of 61.6 sq. m., letter G 12, number of floors: 1;
- garage, purpose: non-residential, with the total space of 337.5 sq. m., letter G 11, number of floors: 1.
Lease fee:
- building lease fee - 4,697,049 (Four million six hundred and ninety seven thousand forty nine) rubles per month including VAT,
- boiler house lease fee - 24,713.92 (Twenty four thousand seven hundred and thirteen rubles 92 kopecks) per month including VAT,
- garage lease fee - 135,405 (One hundred and thirty five thousand four hundred and five) rubles per month including VAT.
Lease period: 11 (eleven) months. If neither party declares their refusal to extend the agreement before it expires, upon expiration of its term the agreement shall be considered automatically extended for the same term and under the same conditions.
The price (money value) of the Company's property, which can be directly or indirectly disposed by the Company under the lease agreement, amounts to less than 2 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 2.3 on the agenda:
"To approve the conclusion of the Agreement to the contract No. 069 of 18.07.2016 for the services of the assessment of the market value with Joint Stock Company "Tander" (hereinafter - the Client) and Limited Liability Company "Nizhnevolzhskoe agentstvo otsenki" (office 4, 16 Maskakovoy street, Astrakhan, 414056, Taxpayer Id. Number 3015058986, Principal State Registration Number 1023000872311) (hereinafter - the Assessor), which is the related party transaction based on the following terms and conditions of the contract for the services of the assessment of the market value (hereinafter - the Contract) and the Agreement:
1) JSC "Tander" transfers and PJSC "Magnit" accepts all rights and obligations of the "Client" under the Contract.
2) Terms and conditions of the Contract:
a) The Client orders, and the Assessor performs the following services by order of the Client:
- assessment of the market value of the land plot as of the preceding date, cadastral number 30:12:030833:137, with the space of 2,215 sq. m., located at the address: 55 Zvezdnaya street, Sovetskiy district, Astrakhan,
- expert review of the assessor's reports by the self-regulatory organization and provision of the expert finding containing the conclusion of the compliance of the report with the legislation of the Russian Federation related to assessment, standards and rules of assessment, and confirmation of cost of a subject of assessment, determined by the assessor in the report.
b) cost of work under the Agreement: 60,000(Sixty thousand) rubles.
The price (money value) of the Company's property, which can be directly or indirectly disposed by the Company under the Contract, amounts to less than 2 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 2.4 on the agenda:
"To approve the guarantee agreement which is a related party transaction and which the Company (hereinafter - the Guarantor) plan to execute in future as security for obligation of Joint Stock Company "Tander" (beneficiary) (hereinafter - the Borrower) to Public Joint Stock Company ROSBANK (hereinafter - the Creditor) under the additional agreement to the Bank account agreement No. 0249018/RUB of 25.10.2007 (hereinafter - the Agreement), based on the following essentials:
According to the terms and conditions of the Agreement, the Creditor provides credits to the Borrower within the period determined by the Agreement by execution of payment orders of the Borrower, regardless of the lack or deficiency of monetary funds on the account (account crediting), given that the aggregate debt of the Borrower under the provided credits does not exceed the maximum possible amount of debt to the Bank determined by the Agreement and arising in the result of the Borrower's account crediting, which the Borrower may have on any date within the period determined by the Agreement (hereinafter - overdraft limit).
The overdraft limit amounts to 365,000,000 (Three hundred and sixty five million) rubles;
The maximum payment period of each credit received under the Agreement: 30 (Thirty) calendar days from the date of provision of the corresponding credit but not later than the overdraft closure date.
The overdraft closure date (the last date of the period during which the Borrower's account is served in overdraft terms) - August 1,2017.
The interest rate (including the Bank's margin) shall not exceed 30 (Thirty) percent per annum (maximum interest rate).
In case of missing the deadline for credits repayment the Borrower pays a penalty for the amount not paid on the due date which is equal to the dual key rate of the Bank of Russia effective during the corresponding period of the amount not paid on the due date per each overdue day.
The terms and procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the Agreement.
Under the guarantee agreement the Guarantor and the Borrower shall be jointly liable to the Creditor.
9. The limit price (amount) of the guarantee: the aggregate amount of liabilities of the Guarantor shall not exceed 474,500,000 (Four hundred and seventy four million five hundred thousand) rubles.
The price (money value) of the Company's property, which can be directly or indirectly disposed by the Company under the guarantee agreement, amounts to less than 2 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" with the right to sign the additional agreements on the change of the terms and conditions of the guarantee agreement due to the change of the terms and conditions on 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 2.5 on the agenda:
"To approve the loan agreement (several related loan agreement), which the Company plans to execute in future with Limited Liability Company "Selta" and which is a related party transaction with the following essentials:
1. Parties of the transaction (transactions): the lender - PJSC "Magnit", the borrower - LLC "Selta".
2. Subject of the transaction (transactions): loan of monetary funds;
3. Maximum price (amount) of the transaction (transactions): not more than 680,000,000 (Six hundred and eighty million) 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 by the Borrower).
The price (money value) of the Company's property, which can be directly or indirectly disposed by the Company under the loan agreement, amounts to less than 2 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" with the right to sign the additional agreements to the loan agreement (several related loan agreements) changing the loan terms, including but not limited to the change of the interest rates, the loan amount and the term of the loan 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 JSC "Tander", to make the following decision at the exercise of the voting right on the JSC "Tander" shares owned by the Company:
"To pay dividends on ordinary registered shares of JSC "Tander" following the results of the nine months of 2016 reporting year in the amount of 4,000,000,000 (Four billion) rubles, which amounts to 0.40 (Zero point four zero) rubles per one ordinary share.
To determine the following record date: December 27, 2016.
To pay dividends in monetary funds in accordance with the procedure and within the time limit established by the legislation of the Russian Federation".
Item 3.2 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 Credit agreement on the opening of the credit line (hereinafter - the Credit agreement) by JSC "Tander" (hereinafter - the Borrower) with "Gazprombank" (Joint Stock company) (hereinafter - the Creditor), 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 consolidated statements of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:
1. The Creditor shall open the Credit line for the Borrower and provide the credit tranches (part of the credit provided within the credit line) in the amount and under the terms and conditions specified in the Credit agreement, and the Borrower shall repay the credit received under the credit line, pay interest and fulfill other obligations under the Credit agreement;
2. The debt limit under the credit line (maximum amount of the aggregate debt under the credit line) shall amount to not more than 30,000,000,000 (Thirty billion) rubles;
3. The term of provision of each credit tranche shall amount to not more than 36 (Thirty six) months;
4. The interest rate for the credit use shall amount to not more than 35% (Thirty five) percent per annum;
5. Final date of debt repayment under the credit line - December 31, 2020 (inclusive).
6. Terms, procedure of provision and repayment of the credit amounts, interest and other payments 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 3.3 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 additional agreement to the Agreement #17939-KRD of September 7, 2016 on the conditions and the procedure of the opening of the credit line with the debt limit (hereinafter - the Agreement) by JSC "Tander" (hereinafter - the Borrower) with "Raiffeisen bank" (Joint Stock company) (hereinafter - the Creditor), 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:
The Agreement determines the general conditions and the procedure of the provision of monetary funds under the credit line (maximum credit amount which can be provided under the Agreement);
the amount of aggregate debt (the debt limit) shall not exceed 20,000,000,000 (Twenty billion) rubles;
the Creditor is entitled to provide credits during the period starting from the date of the Agreement conclusion and terminating on September 5, 2017 inclusive (the availability period);
the Borrower's obligations on the repayment of credits provided under the credit line shall be performed until September 6, 2017 inclusive (the repayment date);
the credit amount shall not be less that 50,000,000 (Fifty million) Russian rubles. The minimum credit term is 1 (One) business day, the maximum credit term is 90 (Ninety) calendar days;
the interest rate of every credit shall not exceed 35 (Thirty five) percent per annum;
the conditions, the procedure of provision and repayment of credit amounts, interest and other payments are 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 4 on the agenda:
"To ratify the Regulations on the committees of the Board of Directors of Public Joint Stock Company "Magnit".
For further information, please contact:
| Timothy Post | Head of Investor Relations Email: post@magnit.ru Office: +7-861-277-4554 x 17600 |
| Investor Relations Office | MagnitIR@magnit.ru Direct Line: +7-861-277-4562 Website: ir.magnit.com/ |
| Media Inquiries | Media Relations Department press@magnit.ru |
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.
