Moscow, April 27, 2021 — Nornickel, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper, announces that the Board of Directors of Nornickel approved a buyback of up to 5,382,865 shares of the Company, representing 3.4% of its issued outstanding shares, for a total amount of approximately USD 2 bn.
The buyback will be carried out by Nornickel by way of the repurchase of up to 5,382,865 of its shares (the “Maximum Number of Shares”) pursuant to Article 72, para. 2 of the Russian Joint-Stock Companies Law (the “Buyback”). The repurchase price is RUB 27,780 per one share (the “Purchase Price”).
The holders of the Company’s shares may participate in the Buyback by submitting applications to sell their shares from May 20, 2021 to June 18, 2021, inclusive. The Purchase Price will be paid in Russian rubles in cash, and the payment is expected to be made by July 3, 2021.
All holders of the Company’s ordinary shares are able to participate in the Buyback. Holders of the American depositary receipts representing rights to the Company’s ordinary shares (“ADRs”) will have to cancel their ADRs and receive the underlying ordinary shares in order to be able to tender such shares in the Buyback, as outlined in the information letter addressed to ADR holders of the Company, which will be available at https://www.nornickel.com/ on the Investors page.
If the aggregate number of all shares in respect of which shareholders submit applications to sell exceeds the Maximum Number of Shares, the number of shares which will be repurchased by the Company will be determined on a pro rata basis (with downward adjustments where necessary to avoid the purchase of fractional shares).
The shares which will be repurchased by Nornickel will not grant voting rights or rights to receive dividends and will not be taken into account during the voting at a general shareholders’ meeting. It is expected that all shares repurchased by Nornickel will be cancelled in accordance with the procedures set forth in the Russian law following receipt of necessary corporate approval, except for the shares representing 0.5% of Nornickel’s issued and outstanding shares, which are expected to be used for the employee incentive purposes.
For more details on the procedure for submission of applications to sell shares in the Buyback, pro-ration and payment of the Purchase Price please refer to the notice on the Buyback addressed to the Company’s shareholders and the information letter on tax matters, which will be available on the Company’s website at https://www.nornickel.com/ on the Investors page together with other information in respect of the Buyback.
In the course of its evaluation of the Buyback, the Board of Directors considered Nornickel’s performance and financial condition, market quotations of Nornickel’s shares on the Moscow Exchange, analysts’ projections of Nornickel’s financial indicators and estimated price targets, potential effects of the Buyback and other relevant materials. UBS acted as an exclusive financial adviser and provided a fairness opinion to Nornickel in connection with the Buyback. Debevoise & Plimpton LLP acted as legal adviser.
The Board Chairman, Gareth Penny, commented on the Buyback: “The Board of Directors believes that the Company is currently undervalued by the market, which presents a good opportunity to run a share buyback. As it is customary for this type of transactions, most of the shares will be canceled afterwards with the exception of the stock to be used for the employee incentive purposes. The Board additionally welcomes the initiative to use shares to incentivize the employees as this is in line with the best international standards”.