25 May 2022 18:06

MMK's request to maintain listing abroad turned down, co terminating DR agreement

MOSCOW. May 25 (Interfax) - Magnitogorsk Iron & Steel Works (MMK) is terminating its depositary receipts program.

"MMK submitted the application to the Russian Government to continue its depositary receipts trading outside of the Russian Federation in accordance with Federal Law No. 114-FZ, but the application was rejected on May 13, 2022, which MMK was notified of on May 19, 2022," the company said in a statement.

"MMK has notified Citibank, N.A. about the termination of the Depositary Agreement in accordance with its terms and conditions and requested Citibank, N.A. to notify the GDR holders of the DR program's termination and to take all necessary actions under the Deposit Agreement," the company said.

"GDR holders have the right to convert their GDRs into the ordinary shares of MMK, where each MMK GDR represents 13 ordinary shares of MMK, in accordance with the Depositary Agreement," it said.

The company notified FCA (Financial Conduct Authority, UK Financial Services Authority) about its intention to cancel GDR listing in the official price listing of London Stock Exchange and asked LSE to cancel admission of receipts to trading on the main market.

"MMK expects (but in no way guarantees or undertakes to procure) that the cancellation will become effective on the 21st business day from the date of notification of FCA and LSE," the company said in the statement.

Law No. 114-FZ "On Amending the Federal Law On Joint Stock Companies and Certain Legislative Acts of the Russian Federation" published on April 16, provides that circulation of depositary receipts on foreign platforms will be prohibited 10 days from the date of publication of the law. After publication, companies have 5 working days to take "necessary and sufficient" steps to terminate depositary receipts agreements. The same timeframe is provided for the submission of supporting documents to the Central Bank of Russia (CBR). The issuers had five working days - from April 27 to May 5 inclusive - to submit applications to the Russian Finance Ministry with a request to maintain the listing. The decision to keep the listing or to cancel it was made by a subcommittee of the Russian Government Commission on Monitoring Foreign Investment.