Retailer Magnit sent JPMorgan Chase Bank, NA a notice to terminate the custody agreement and the GDR program. In accordance with Law 114-FZ, the company sent an application to the Ministry of Finance to continue the circulation of GDRs outside the Russian Federation and on May 20 received a decision to refuse to satisfy the application, Magnit said in a statement. The retailer’s GDRs are traded on the London Stock Exchange, shares – on the Moscow Stock Exchange. GDR holders have the right to convert them into shares of PJSC “Magnit” in the manner prescribed by the depository agreement, and subject to the mandatory requirements stipulated by the legislation of the Russian Federation, the retailer noted. Law No. 114, which came into force on April 27, prohibits the placement of depositary receipts for securities of Russian companies on foreign exchanges and obliges issuers to delist existing ones. The law gave companies until May 5, inclusive, to take “necessary and sufficient” actions to terminate agreements on the placement of depositary receipts. Companies wishing to maintain the depository program had the right to apply to the Ministry of Finance until May 5 with a corresponding request, providing a rationale for the need for this decision. The decision to maintain the listing or to refuse is made by the subcommittee of the government commission on control over foreign investment. Previously, a refusal to apply for the preservation of the listing on foreign sites was received by Gazprom. Of the retailers registered in the Russian Federation, Lenta also has a listing on the LSE. On Thursday, the company announced that the government commission has allowed it to keep the GDR program. Magnit is the second largest retailer in Russia in terms of revenue and the largest in terms of the number of stores. The largest shareholder of the company is Alexander Vinokurov’s Marathon Group. In January, Marathon increased its stake in the retailer to 29.2% by purchasing shares from VTB. Magnit held an IPO on the MICEX and RTS in 2006, and in 2008 will place depository receipts on the LSE. Source: FINMARKET.RU

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