NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM AUSTRALIA, CANADA AND JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
PJSC Polyus (LSE, MOEX — PLZL) (“Polyus” or the “Company”) announces the decision by the Board of Directors (the “Board”) to approve a programme to purchase up to an aggregate of 1,428,571 ordinary shares of the Company, including ordinary shares represented by depositary shares, to be carried out by the Company’s wholly-owned subsidiary, Polyus Service Limited Liability Company (“Polyus Service”).
All shareholders of the Company, including the controlling shareholder, Polyus Gold International Limited (“PGIL”), may participate in the programme.
Shares purchased are expected to be used for the on-going consolidation of Lenzoloto assets, tranches under the Company’s long-term incentive plan, as consideration for potential M&A transactions, and for other corporate purposes. For the time being the Company intends to keep the purchased shares as quasi treasury and not to exercise voting rights attributable to those shares.
Minority shareholders may participate in a tender offer (the “Tender Offer”), which will be launched today by Polyus Service, for up to 317,792 ordinary shares.
PGIL intends to sell to Polyus Service, following the expiration of the Tender Offer period, up to 1,110,779 ordinary shares, which corresponds to its pro rata stake in the Company, at the price that will be determined as a result of the Tender Offer. PGIL will not participate in the price setting process of the Tender Offer.
The Tender Offer will be implemented through a modified “Dutch auction” procedure and will expire on December 24, 2020. The programme will be carried out at a price range of USD 210 to USD 240 for each ordinary share and at a price range of USD 105 to USD 120 for each depositary share (together, the “Price Range”).
The maximum number of shares to be purchased amounts to 1.05% of the Company’s share capital. Following the completion of the programme, including the Tender Offer, the free-float is expected to stand at 21.84%.
The decision, including the Price Range, was approved by the Board taking into consideration the analysis of an indicative market value range prepared by an international reputable independent appraiser.
The overall transaction amount will approximate US$300 million at the bottom end of the range at USD 105 for each depositary share or USD 210 for each ordinary share.
The overview of the key terms of the purchase programme, including the Tender Offer, is provided below.
Key terms of the Tender Offer
Polyus Service is inviting holders of the issued and outstanding ordinary shares of the Company (“Ordinary Shares”), including Ordinary Shares represented by Regulation S and Rule 144A Global Depositary Shares (“GDSs”) and Level I American Depositary Shares (“ADSs” and, together with the GDSs, “DSs”, and the Ordinary Shares and DSs, together, the “Securities” and each a “Security”, and the holders, individually or together, the “Securityholders” and each a “Securityholder”) to tender for cash up to an aggregate of 317,792 Ordinary Shares, including Ordinary Shares represented by DSs (the “Maximum Number of Securities”), at a purchase price not less than US$210 and not greater than US$240 for each Ordinary Share (the “Minimum Ordinary Share Price” and the “Maximum Ordinary Share Price,” respectively) (the “Ordinary Share Price Range”), to be paid in Russian rubles based on the U.S. dollar / Russian ruble exchange rate of the Central Bank of Russia (the “CBR”) effective on the date of the announcement of the results of tenders pursuant to the Tender Offer, and at a price not less than US$105 and not greater than US$120 for each DS (the “Minimum DS Price” and the “Maximum DS Price,” respectively) (the “DS Price Range”), to be paid in U.S. dollars, unless otherwise set forth in the Tender Offer Memorandum dated November 24, 2020 (“Tender Offer Memorandum”), in each case upon the terms and subject to the conditions set forth in the Tender Offer Memorandum (the “Tender Offer”) and, in the case of Ordinary Shares, in the related Ordinary Shares Letter of Transmittal (the “Ordinary Shares Letter of Transmittal”), and, in the case of DSs, the DS Corporate Action Notice (the “DS Corporate Action Notice”).
The period for submission of tenders pursuant to the Tender Offer commences on November 24, 2020 and will expire at 4:00 p.m., Luxembourg/Brussels time (6:00 p.m., Moscow time, 3:00 p.m., London time, 10:00 a.m., New York time) on December 24, 2020 (“Expiration Time”), unless extended by Polyus Service.
Please note that The Depository Trust Company (“DTC”), Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream” and, together with DTC and Euroclear, the “Clearing Systems”), their respective participants and the brokers or other securities intermediaries through which DSs are held will establish their own cut-off dates and times for the tender of the DSs, which will be earlier than the Expiration Time.
Structure of the Tender Offer
A modified “Dutch auction” allows each Securityholder to select the price, within the Ordinary Share Price Range for Ordinary Shares and within the DS Price Range for DSs, subject to certain increments, at which the Securityholder is willing to sell its Securities, or submit a Strike Price Tender (as defined below).
Upon the terms and subject to the conditions set forth in the Tender Offer Memorandum, the Ordinary Shares Letter of Transmittal and the DS Corporate Action Notice, including the DS Letter of Transmittal, Polyus Service will select the Ordinary Share Strike Price as the single lowest purchase price within the Ordinary Share Price Range and the DS Strike Price as the single lowest purchase price within the DS Price Range that will allow it to purchase the Maximum Number of Securities (in any combination of Ordinary Shares and DSs) at such price or, if fewer Ordinary Shares and
DSs are properly tendered, all Ordinary Shares and DSs that are properly tendered and not withdrawn prior to the Expiration Time.
Securityholders can tender their Securities in the following ways:
- submit a tender at whatever is determined by Polyus Service to be the Ordinary Share Strike Price for Ordinary Shares or the DS Strike Price for DSs (a “Strike Price Tender”);
- submit a tender at a single price within the Ordinary Share Price Range for Ordinary Shares or the DS Price Range for DSs; or
- submit a tender at different prices, subject to set increments, within the Ordinary Share Price Range for Ordinary Shares or the DS Price Range for DSs.
Any tender other than a Strike Price Tender must be expressed in whole U.S. Dollars per Ordinary Share (payable in Russian rubles based on the U.S. dollar / Russian ruble exchange rate of the CBR effective on the date of the announcement of the results of tenders pursuant to the Tender Offer) or per DS, as applicable.
Tenders may be made within the Ordinary Share Price Range for Ordinary Shares, in increments of US$2.00 only, and within the DS Price Range for DSs, in increments of US$1.00 only.
If a Securityholder wants to participate in the Tender Offer and wishes to maximize the chance of having its Securities accepted for purchase, the Securityholder should submit its Securities for purchase as a Strike Price Tender. Securityholders should take into account that this election may have the effect of lowering the Ordinary Share Strike Price or the DS Strike Price and could result in their Ordinary Shares or DSs being purchased at the Minimum Ordinary Share Price or the Minimum DS Price, respectively.
Purchase from Polyus Gold International Limited (“PGIL”)
Polyus Service and PGIL, the controlling shareholder of the Company, have signed an indicative letter of intent (the “PGIL LoI”) pursuant to which PGIL undertook not to participate in the Tender Offer through tendering any Securities it owns in the Tender Offer but indicated that it may following the expiration of the Tender Offer period, sell to Polyus Service up to a maximum amount of 1,110,779 Ordinary Shares held by it. Any such sale, if it is implemented, is expected to be on the same terms as the share purchase agreements that will be signed by holders of Ordinary Shares under the terms of the Tender Offer and will be at a purchase price equal to the price per Ordinary Share as will be determined and paid as the Ordinary Share Strike Price in the Tender Offer. Pursuant to the PGIL LoI, any share purchase agreement with PGIL on these terms may only be entered into during the Execution Period (as defined in the Tender Offer Memorandum) and, accordingly, if such share purchase agreement is signed, the purchase of Ordinary Shares from PGIL could occur at any time starting with, and including, the date when the results of tenders pursuant to the Tender Offer, the Ordinary Share Strike Price and the DS Strike Price are announced. The provisions of PGIL LoI, other than PGIL’s undertaking not to tender any Ordinary Shares in the Tender Offer, are indicative and non-binding and, accordingly, PGIL may, at any time prior to the Expiration Time, notify Polyus Service that it will not be selling any Ordinary Shares to Polyus Service or that it proposes to sell a smaller number of Ordinary Shares under the share purchase agreement.
Strike Price
Upon the terms and subject to the conditions set forth in the Tender Offer Memorandum, Polyus Service will select the lowest price, not greater than US$240 nor less than US$210 per Ordinary Share (the “Ordinary Share Strike Price”), and a corresponding single lowest price not greater than US$120 nor less than US$105 per DS (the “DS Strike Price” and, together with the Ordinary Share Strike Price, the “Strike Price” or the “Purchase Price”), that will allow it to purchase the Maximum Number of Securities (in any combination of Ordinary Shares and DSs) or, if fewer Ordinary Shares and DSs are properly tendered, all Ordinary Shares and DSs that are properly tendered and not withdrawn prior to the Expiration Time.
Securityholders who tender their Securities at a price below or at the Ordinary Share Strike Price for Ordinary Shares, or below or at the DS Strike Price for DSs, or as Strike Price Tenders, will receive the Ordinary Share Strike Price or the DS Strike Price, as applicable, for all properly submitted and accepted tenders, subject, where applicable, to pro-ration.
Polyus Service will not purchase any Ordinary Shares and DSs tendered at a price above the Ordinary Share Strike Price and the DS Strike Price, respectively.
Pro-ration
If the aggregate number of all validly tendered Securities (in any combination of Ordinary Shares and DSs) exceeds the Maximum Number of Securities, the number of Ordinary Shares and DSs, which will be accepted and purchased in the Tender Offer, will be determined on a pro rata, or proportional, basis according to the number of Securities tendered (or deemed to have been tendered) by the tendering Securityholders at or below the Ordinary Share Strike Price or the DS Strike Price, as applicable (with downward adjustments where necessary to avoid the purchase of fractional Securities).
Any pro rata allocation pursuant to the Tender Offer will not differentiate between Ordinary Shares or DSs, except that it will be taken into account that one Ordinary Share is represented by two DSs.
In these circumstances, the number of Securities that will be purchased from each Securityholder that has properly tendered and not withdrawn its Securities, prior to the Expiration Time, will be as described in the Tender Offer Memorandum.
Circumstances in which the Tender Offer may not proceed
The Tender Offer is not conditioned on any minimum number of Securities being tendered or on Polyus Finance obtaining additional financing. The Tender Offer is, however, subject to certain other conditions set forth in the Tender Offer Memorandum, such as no material adverse change or certain other events occurring prior to the Expiration Time of the Tender Offer.
Full details of the Tender Offer, including the terms and conditions on which it is made, are set out in the Tender Offer Memorandum.
Timetable
| DAY | EVENT |
| On November 24, 2020 | Announcement of the Tender Offer and commencement of the Tender Offer period |
| 4:00 P.M., Luxembourg/Brussels time (6:00 P.M., Moscow time, 3:00 P.M., London time, 10:00 A.M., New York time) on December 24, 2020 (Expiration Time) |
Deadline for submission of tenders
Please note that Clearing Systems, their respective participants and the brokers or other securities intermediaries through which DSs are held will establish their own cut-off dates and times for the tender of the DSs, which will be earlier than the Expiration Time. |
| On or about December 28, 2020 | Announcement on the results of tenders pursuant to the Tender Offer, the Ordinary Share Strike Price, the DS Strike Price and pro-ration (if any) |
| On or about December 29, 2020 |
Transfer of the aggregate DS Strike Price for DSs purchased from Non-Russian DS Holders (as defined in the Tender Offer Memorandum) in U.S. dollars to the DS Tender Agent. The DS Tender Agent will, as soon as practicable, transfer the aggregate DS Strike Price for DSs purchased from Non-Russian DS Holders to the Clearing Systems for further distribution to Non-Russian DS Holders who have validly tendered their DSs in the Tender Offer and whose DSs have been accepted for purchase in the Tender Offer
Transfer of DSs accepted for purchase to Polyus Service from Non-Russian DS Holders |
| December 29, 2020 — January 14, 2021 | Transfer of DSs accepted for purchase from DS holders who are Russian Currency Residents (as defined in the Tender Offer Memorandum) to Polyus Service ( within seventh (7) Russian business days following the date of the announcement on the results of tenders pursuant to the Tender Offer) |
| December 29, 2020 — January 25, 2021 | Transfer by Polyus Service of the DS Strike Price for the DSs purchased from DS holders who are Russian Currency Residents in Russian rubles to the bank accounts of the DS holders, who are Russian Currency Residents and have validly tendered their DSs in the Tender Offer and whose DSs have been accepted for purchase in the Tender Offer, with authorized Russian banks ( by no later than on the seventh (7th) Russian business day following receipt of the tendered DSs by Polyus Service ) |
| December 28, 2020 — January 18, 2021 | Execution of the share purchase agreements in respect of tendered Ordinary Shares |
| December 28, 2020 — January 27, 2021 | Transfer of Ordinary Shares accepted for purchase to Polyus Service ( by no later than on the seventh (7th) Russian business day following execution of the applicable share purchase agreement) |
| December 28, 2020 — February 5, 2021 | Payment for Ordinary Shares accepted for purchase and transferred to Polyus Service (less any applicable taxes) ( by no later than on the seventh (7th) Russian business day following receipt of the tendered Ordinary Shares by Polyus Service pursuant to the applicable executed share purchase agreement) |
| On or about January 28, 2021 | Announcement of the Tender Offer completion ( upon completion of the settlement procedures with respect to the sale and purchase of Ordinary Shares and DSs accepted for purchase by Polyus Service) |
Amendments and termination
Polyus Service expressly reserves the right, in its sole discretion, at any time and from time to time, to extend the period during which the Tender Offer is open for any reason, including the failure to satisfy any of the conditions set forth in the Tender Offer Memorandum. Polyus Service also expressly reserves the right, in its sole discretion, at any time and from time to time, to waive, in whole or in part, any condition or amend the Tender Offer in any respect, in each case by making a public announcement thereof. Polyus Service also expressly reserves the right at any time to terminate the Tender Offer prior to the Expiration Time and not accept for purchase, or pay for, any Securities for any reason or if any of the conditions referred to in the Tender Offer Memorandum has not been satisfied or upon the occurrence and during the continuance of any of the events specified in the Tender Offer Memorandum.
Any extension, termination or amendment will be followed as promptly as practicable by a press release by Polyus Service announcing the extension, termination or amendment. Notwithstanding the foregoing, Polyus Service will have no obligation to publish, advertise or otherwise communicate any such press release other than by issuing the press release and publishing it on the dedicated website at: www.polyus-service.com.
Tender Procedures
Securityholders must follow all applicable procedures outlined in the Tender Offer Memorandum, and, in the case of Ordinary Shares, in the Ordinary Shares Letter of Transmittal and, in the case of DSs, in the DS Corporate Action Notice, including the DS Letter of Transmittal, that accompany the Tender Offer Memorandum.
The specific procedures for tendering Securities will vary depending on whether the Securityholder is tendering Ordinary Shares or Regulation S GDSs, Rule 144A GDSs or Level I ADSs and, for the DS holders, whether the tendering DS holder is a Non-Russian DS Holder or a Russian Currency Resident (each as defined in the Tender Offer Memorandum).
Questions and requests for assistance or copies of the Tender Offer Memorandum, the Tax Information Memorandum, the Ordinary Shares Letter of Transmittal and the DS Corporate Action Notice may be directed to CMi2i Ltd (the “Information Agent”) on 0800 029 4287 (toll free from within the UK), +44 (0) 208 187 1439 (London local call), 1-866 458 4519 (toll free from within the US), +1 929 999 5141 (New York local call) or at the following e-mail address: polyus@cmi2i.com.
Questions about the tendering procedures for DSs held by Non-Russian DS Holders should be directed to the DS Tender Agent at the following e-mail address: drprojectarrow@bnymellon.com.
Questions and requests for assistance in connection with the tendering procedures for the Ordinary Shares or DSs held by Russian DS Holders should be directed to IRC-R.O.S.T. during business hours at: Joint Stock Company Independent Registrar Company R.O.S.T., 18 bldg. 5B, Stromynka Street, Moscow, Russian Federation, info@rrost.ru, 8-800-700-94-47 (from within the Russian Federation).
Dealer Manager and other agents
Polyus Service has engaged J.P. Morgan Securities Plc to act as a dealer manager with respect to the Tender Offer. The Dealer Manager and its affiliates may contact and communicate with institutional Securityholders regarding the Tender Offer and may request brokerage houses, custodians, nominees, fiduciaries and others to forward the Tender Offer Memorandum and related materials to such Securityholders.
Polyus Service has also entered into a services agreement with IRC-R.O.S.T. with respect to tenders of Ordinary Shares and DSs tendered by DS holders who are Russian Currency Residents pursuant to the Tender Offer and agreements with NRC Stock Market Limited Liability Company (“NRC Stock Market”) to act as depository and broker (authorized representative) with respect to acquisition of Ordinary Shares and DSs in the Russian Federation.
In addition, Polyus Service, represented by NRC Stock Market, has engaged The Bank of New York Mellon to act as tender agent (the “DS Tender Agent”) with respect to tenders of DSs pursuant to the Tender Offer.
Polyus Service has appointed CMi2i Ltd to act as the Information Agent for the Tender Offer.
Russian tax and currency matters
Holders of Ordinary Shares and holders of DSs who are Russian Currency Residents (as defined in the Tender Offer Memorandum) should note that the Ordinary Share Strike Price for the Ordinary Shares and the DS Strike Price for the DSs tendered by DS holders who are Russian Currency Residents will be fixed and paid in Russian rubles at the CBR U.S. dollar / Russian ruble exchange rate in effect on the date of the announcement of the results of tenders pursuant to the Tender Offer and that the exchange rate of the U.S. dollar against the Russian ruble is volatile. No assurance can be given as to the CBR U.S. dollar / Russian ruble exchange rate that will be in effect on such date.
Securityholders should note that the Purchase Price does not take account of applicable fees, expenses, taxes or other charges and the net proceeds that will be actually received by tendering Securityholders may be lower, perhaps significantly. In particular, as required by Russian law, where Securities are not tendered through a Russian broker or a Russian trustee acting as a tax agent for Russian law purposes, Polyus Service will act as a tax agent and withhold an applicable amount in respect of tax with respect to the payment of the Ordinary Share Strike Price in relation to Ordinary Shares sold by holders of Ordinary Shares who are individuals (that is, natural persons and not corporations or other legal entities) and the DS Strike Price in relation to DSs sold by DS holders who are individuals (natural persons) that are Russian tax residents. The applicable tax rate will depend on whether the relevant individual Securityholder is resident or non-resident for tax purposes in Russia and the applicable tax base will depend on whether there are any exemptions available or whether the relevant Securityholder can confirm the costs at which it acquired the Securities that are tendered in the Tender Offer. Please refer to the information memorandum on certain tax matters (the “Tax Information Memorandum”) that accompanies the Tender Offer Memorandum for more information as to applicable procedures, including the indicative list of required documents, and consult with your professional tax advisers as to the amount and the procedure for any tax payment, including with respect to the applicable tax consequences in any other jurisdiction.
Further information
Copies of the Tender Offer Memorandum, the Tax Information Memorandum, the Ordinary Shares Letter of Transmittal, DS Corporate Action Notice, DS Letter of Transmittal, other accompanying documents and other related materials are or will be made available at a dedicated website at: www.polyus-service.com.
For information and documentation regarding the Tender Offer, please contact:
CMi2i Ltd
21-26 Garlick Hill, London EC4V2AU
E-mail: polyus@cmi2i.com
London local: +44 (0)208 187 1439
UK toll free: 0800 029 4287
New York local: +1 929 999 5141
US toll free: 1-866 458 4519
The Bank of New York Mellon
(with respect to the tender procedures for DSs held by Non-Russian DS Holders)
E-mail: drprojectarrow@bnymellon.com
IRC-R.O.S.T.
(with respect to the tender procedures for Ordinary Shares and DSs held by Russian DS Holders)
E-mail: info@rrost.ru
Tel.: 8-800-700-94-47 (from within the Russian Federation)
The decision whether to tender Securities in the Tender Offer may entail certain risks and considerations. In deciding whether to tender their Securities in the Tender Offer, holders of Ordinary Shares and DSs are urged to consider the information that is contained in the Tender Offer Memorandum and seek independent financial, legal and tax advice.
None of Polyus, Polyus Service, their respective management or Board of Directors of Polyus, the DS Tender Agent, the DS Depositary, the Dealer Manager, the Information Agent, IRC-R.O.S.T., NRC Stock Market, or any of the professional advisers makes any recommendation as to whether a Securityholder should or should not tender Securities pursuant to the Tender Offer. You must make your own decision as to whether to tender your Securities and, if so, how many Securities to tender. In doing so, you should consult your own financial, legal and tax advisers, and carefully read and evaluate the information in the Tender Offer Memorandum.
Enquiries
Polyus
Polyus is the world’s fourth-largest gold mining company by production volumes and one of two gold miners with the largest attributable gold reserves. The company demonstrates the lowest production costs among major global gold producers. Its principal operations are located in Siberia and the Russian Far East: Krasnoyarsk, Irkutsk and Magadan regions and the Republic of Sakha (Yakutia).
Enquiries
Investor and Media contact
Victor Drozdov, Director Communications & Investor Relations (CIR) Department
+7 (495) 641 33 77
drozdovvi@polyus.com
Forward looking statement
This announcement may contain “forward-looking statements” concerning Polyus and/or Polyus group. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “continue”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus’ and/or Polyus group’s operations. Many of these risks and uncertainties relate to factors that are beyond Polyus’ and/or Polyus group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.
Information in this announcement may constitute inside information.
Important notice to investors
THIS ANNOUNCEMENT IS NOT INTENDED TO, AND DOES NOT CONSTITUTE, OR FORM PART OF, AN OFFER TO SELL OR AN INVITATION TO PURCHASE, EXCHANGE OR SUBSCRIBE FOR ANY SECURITIES IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR A PROSPECTUS EQUIVALENT DOCUMENT.
THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IN JURISDICTIONS MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS SHOULD INFORM THEMSELVES ABOUT THE LAWS OF THEIR JURISDICTION, AND OBSERVE ANY APPLICABLE REQUIREMENTS.
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (“SEC”) NOR ANY U.S. STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED OF THE TENDER OFFER MEMORANDUM, PASSED UPON THE FAIRNESS OR MERITS OF THE TENDER OFFER OR DETERMINED WHETHER THE TENDER OFFER IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT AND THE TENDER OFFER MEMORANDUM IS ADDRESSED EXCLUSIVELY TO THE HOLDERS OF ORDINARY SHARES AND DSs REPRESENTING ORDINARY SHARES OF POLYUS. NEITHER THE TENDER OFFER MEMORANDUM NOR THE TENDER OFFER DESCRIBED THEREIN NOR ANY INFORMATION CONTAINED HEREIN AND THEREIN CONSTITUTE AN OFFER (“OFERTA”) PURSUANT TO RUSSIAN LAW, OR AN ADVERTISEMENT, OR AN OFFER OF SECURITIES TO AN UNLIMITED NUMBER OF PERSONS WITHIN OR OUTSIDE THE TERRITORY OF THE RUSSIAN FEDERATION, OR A VOLUNTARY TENDER OFFER OR MANDATORY TENDER OFFER UNDER RUSSIAN LAW, OR AN AUCTION UNDER ARTICLES 447-449 OF THE CIVIL CODE OF
THE RUSSIAN FEDERATION AND APPLICABLE RUSSIAN LAW. NEITHER THE TENDER OFFER MEMORANDUM NOR THE TENDER OFFER DESCRIBED HEREIN CONSTITUTE OR ARE INTENDED FOR PLACEMENT OR PUBLIC CIRCULATION OF SECURITIES OF FOREIGN ISSUERS IN THE RUSSIAN FEDERATION. GDSs AND ADSs, TO WHICH THE TENDER OFFER RELATES, ARE NEITHER REGISTERED IN THE RUSSIAN FEDERATION NOR ADMITTED TO PLACEMENT, PUBLIC PLACEMENT OR PUBLIC CIRCULATION IN THE RUSSIAN FEDERATION IN ACCORDANCE WITH ARTICLE 51.1 OF RUSSIAN FEDERAL LAW NO. 39 FZ “ON THE SECURITIES MARKET”, DATED APRIL 22, 1996 (AS AMENDED) (THE “RUSSIAN SECURITIES MARKET LAW”). THE TENDER AND PURCHASE OF DSs WILL BE CARRIED OUT EXCLUSIVELY IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE TENDER OFFER MEMORANDUM. ANY INFORMATION IN THE TENDER OFFER MEMORANDUM AND RELATED DOCUMENTS IN RESPECT OF DSs IS ADDRESSED IN THE RUSSIAN FEDERATION SOLELY TO PERSONS WHO ARE “QUALIFIED INVESTORS” AS DEFINED IN THE RUSSIAN SECURITIES MARKET LAW.
THE TENDER OFFER IS BEING MADE TO SHAREHOLDERS OF POLYUS RESIDENT IN THE UNITED STATES IN RELIANCE ON, AND COMPLIANCE WITH, SECTION 14(E) OF THE U.S. SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”) AND REGULATION 14E THEREUNDER. THE TENDER OFFER IS BEING MADE IN THE UNITED STATES BY POLYUS SERVICE AND NO ONE ELSE.
NEITHER THE COMPANY, POLYUS SERVICE NOR ANY MEMBER OF THE POLYUS CONSOLIDATED GROUP EXPECTS TO PURCHASE SECURITIES, OTHER THAN PURSUANT TO THE TENDER OFFER, DURING THE PERIOD IN WHICH THE TENDER OFFER IS OPEN FOR SUBMISSION OF TENDERS, EXCEPT THAT THE COMPANY AND SUCH OTHER COMPANIES MAY USE SECURITIES IN CONNECTION WITH FINANCING, REFINANCING AND ACQUISITION TRANSACTIONS, PURCHASE SUCH SECURITIES IN CONNECTION WITH SUCH TRANSACTIONS AND SELL AND PURCHASE SECURITIES TO AND FROM OTHER MEMBERS OF THE POLYUS CONSOLIDATED GROUP, AND PURCHASE SECURITIES PURSUANT TO REPURCHASE AND SIMILAR TRANSACTIONS ENTERED INTO PRIOR TO ANNOUNCEMENT OF THE TENDER OFFER. IN ADDITION, IN ACCORDANCE WITH RUSSIAN LAW AND PURSUANT TO RULE 14E-5 UNDER THE EXCHANGE ACT, AFFILIATES OF THE COMPANY THAT ARE NOT MEMBERS OF THE POLYUS CONSOLIDATED GROUP AND OVER WHICH POLYUS DOES NOT EXERCISE CONTROL AND THEIR RESPECTIVE NOMINEES OR BROKERS (ACTING AS AGENTS), AND ANY ADVISER TO THE COMPAY OR ANY OF ITS AFFILIATES AND THE DEALER MANAGER IN THE TENDER OFFER OR ANY OF ITS AFFILIATES, AND ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, IN CONCERT WITH ANY SUCH PERSONS, MAY FROM TIME TO TIME MAKE PURCHASES OF, OR ARRANGEMENTS TO PURCHASE, SECURITIES OTHER THAN PURSUANT TO THE TENDER OFFER, BEFORE OR DURING THE PERIOD IN WHICH THE TENDER OFFER IS OPEN FOR SUBMISSION OF TENDERS, SO LONG AS THOSE ACQUISITIONS OR ARRANGEMENTS COMPLY WITH APPLICABLE RUSSIAN LAW AND THE PROVISIONS OF THE EXEMPTION PROVIDED UNDER RULE 14E-5 UNDER THE EXCHANGE ACT. ANY OF THE PURCHASES REFERRED TO IN THIS PARAGRAPH MAY OCCUR EITHER IN THE OPEN MARKET AT PREVAILING PRICES OR IN PRIVATE TRANSACTIONS AT NEGOTIATED PRICES. INFORMATION ABOUT SUCH PURCHASES WILL BE DISCLOSED AS AND IF REQUIRED BY APPLICABLE SECURITIES LAWS.