11 May 2022 15:35

Sberbank explains process for converting of its receipts into shares

MOSCOW. May 11 (Interfax) - Holders of Sberbank depositary receipts can convert them into ordinary shares at a ratio of 1 to 4 (one receipt certifies the right to four shares), the lender said on its website.

The depositary bank for Sberbank receipts since 2017 is JPMorgan Chase. On March 15, 2022, it notified Sberbank that it was withdrawing its status as the depositary of Sberbank securities. Holders of the bank's receipts can convert them into shares within 90 days of that date, the lender said.

The blocking sanctions against Sberbank make it impossible to maintain the program of depositary receipts (even if Russian authorities allowed it), the bank said.

The register of Sberbank's receipt holders closed on April 27, 2022 (the effective date of the federal law on delisting of receipts of Russian companies from foreign exchanges).

The order book for the conversion of Sberbank's receipts into shares by the JPMorgan Chase depositary is open.

Holders of Sberbank's receipts deposited with the National Settlement Depository (NSD) submit to their broker an application for conversion specifying their depository account with the Russian depositary bank. After the broker processes the application and performs all necessary corporate actions, the common shares will be credited to the account specified in the application.

Sberbank notes that currently the execution of orders for the conversion of depositary receipts into an account with the NSD is limited to the European clearing systems Euroclear and Clearstream pending clarification from the European regulators in respect to the sanctions imposed. For holders of receipts holding securities in accounts with Euroclear, Clearstream or the U.S. DTC, the conversion process is similar to that described above (without any restrictions from Euroclear or Clearstream), according to the Sberbank website.

"To open a depo account, a foreign holder of depositary receipts should apply to the global depositary bank where their securities are held or to a broker that has an account with a foreign depositary bank and find out their policy on holding ordinary shares of Russian issuers," Sberbank said. If there are restrictions that do not permit the holding and accounting of Russian shares, a depo account may be opened with any Russian broker or depositary bank that provides such services to foreign clients.

For holders of depositary receipts who are not Russian residents, Sberbank common shares will be transferred to the type C account specified in the conversion application. Nonresidents from countries that do not commit unfriendly acts against Russia are entitled to subsequently transfer the bank's ordinary shares to a regular account with any Russian depositary.

Due to sanctions, nonresidents may be restricted in transactions with the bank's shares, Sberbank said. The lender is asking investors to independently verify the effect of restrictions on its securities.

Sberbank said in late April that it would not apply with the Russian government to retain its depositary receipt program, as restrictions imposed by foreign regulators make it impossible to retain the program.

The U.S. imposed blocking sanctions on Sberbank on April 6. These sanctions provide for the freezing of assets in the US, as well as a ban on any transactions with the bank by U.S. citizens. Some other countries imposed similar restrictions on Sberbank.

Sberbank's American Depositary Receipts (ADRs) are traded on the London Stock Exchange (from March 2, 2022 trading in them, as well as on other securities of Russian issuers, has been suspended). Deutsche Borse (operator of the Frankfurt Stock Exchange) delisted Sberbank's depositary receipts on March 17.

Sberbank previously had two programs of receipts - global and American, and converted GDRs to ADRs in December 2012.