RUSSIAN AQUACULTURE ANNOUNCES INTENTION TO CONDUCT SECONDARY PUBLIC OFFERING OF SHARES

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RUSSIAN AQUACULTURE ANNOUNCES INTENTION TO CONDUCT SECONDARY PUBLIC OFFERING OF SHARES

Moscow, 9 November 2017. Russian Aquaculture ("Russian Aquaculture" or "the Company"), Russia's largest aquaculture company, announces its intention to conduct a secondary public Offering (the "Offering") of new ordinary shares of the Company (the "Shares")

DETAILS OF THE OFFERING

  • Shares will be placed on Moscow Exchange
  • The Company has already registered the issue of 32,769,223 new shares with the Central Bank of the Russian Federation. This represents the maximum potential volume of shares to be placed, and a final decision on the size of the Offering will be taken following the marketing period.
  • Shareholders as of 10 July 2017 will have pre-emptive rights to purchase additional shares, proportional to the number of shares that they owned as of that date. These shareholders must announce the exercise of this right within eight working days following the Company's announcement online of the ability to exercise pre-emptive rights to buy shares, at the following websites: http://www.e-disclosure.ru/portal/company.aspx?id=17531
    and www.russaquaculture.ru.
  • The placement price will be determined by the Board of Directors of the Company, which will take into consideration an analysis of demand, and will be announced after the end of the period when shares may be purchased under pre-emptive rights. Pricing is expected to be announced before the end of November 2017.
  • Funds from the Offering will be used by the Company for general corporate needs and for implementation of the Company's investment programme aimed at creating Russia's leading aquaculture company
  • Russian Aquaculture's core shareholders are committed to the long-term growth of the Company and do not currently plan to sell their shares.
  • Following the placement of the newly-issued shares, an additional independent director may join the Board of Directors to represent the interests of new investors
  • Otkritie Bank and Gazprombank are acting as the joint global coordinators and bookrunners for the Offering. Otkritie Bank is also acting as the broker for the Offering

Russian Aquaculture CEO Ilya Sosnov said:

"In recent years, we have successfully restructured the business and optimised our platform for growth. The management of Russian Aquaculture is focused on implementing our strategy, which aims to create long-term, sustainable growth and further improve the Company's operating efficiency.

"Russian Aquaculture's financial results serve as proof that our new business model is the right one. I have full confidence that our unique experience in the production of high-quality salmon in Russia, and the business's significant potential for growth will be interesting for a wide array of domestic and international institutional and private investors."

COMMITMENT TO STRENGTHENING RUSSIAN AQUACULTURE'S STATUS
AS A PUBLIC COMPANY

The Company remains committed to high standards of corporate governance and information disclosure. The Board of Directors already has two independent directors, including an expert on the aquaculture business.

The Company is in an active growth phase and intends to expand its access to high-quality sources of financing that are available only to open and transparent issuers. The SPO is an important step in the future development of Russian Aquaculture as a publicly listed company, diversification of the shareholder structure, and increasing liquidity and strengthening the Company's investment case.

INVESTMENT HIGHLIGHTS

  • Focus on the high-margin aquaculture sector. 2016 was a watershed in the history of Russian Aquaculture: the business was entirely restructured, the composition of the Board of Directors and shareholders changed, and a new long-term strategy was approved. As part of the transformation plan, the Company sold its distribution business in order to concentrate on the most profitable segment, i.e., aquaculture.
  • Leader on the Russian chilled fish market. Russian Aquaculture is currently the only company in Russia that farms Atlantic salmon in maritime conditions. The Company has about 20% market share of the market for chilled salmon in Russia. Thanks to its developed infrastructure, close proximity to sales markets, and quality control, the Company Offerings one of the best products on the Russian market in the chilled fish segment in terms of quality for consumers.
  • Well-considered long-term growth strategy. The Company has adopted a new long-term growth strategy that aims to create Russia's leading aquaculture company, with its own production of feedstock and fry, as well as facilities for primary processing and a diversified base of biological assets. As part of the strategy the Company plans to increase production volumes to 25-30 thousand tonnes in the next few years, to build a smolt plant in Russia in the long term, and also to become one of the world's largest producers of Atlantic salmon by volumes. Company's core shareholders fully share and support Russian Aquaculture's drive to build a high-quality new business and for the Company's long-term future as a publicly listed company.

ABOUT RUSSIAN AQUACULTURE

Russian Aquaculture is one of the leaders in the production of Atlantic salmon and trout in Russia. Development of aquaculture is one of the Company's strategic priorities.

The Company's core business areas are:

  • Commercial farming of Atlantic Salmon in the Barents Sea in the Murmansk region
     
  • Commercial farming of trout in lakes of the Republic of Karelia
     
  • The Company currently owns cultivation rights for 29 sites for the farming of salmon and trout

The Company's long-term development strategy involves the creation of the largest player in Russia's aquaculture segment, including production of own fry and primary processing of the Company's own products.

OPERATING AND FINANCIAL INDICATORS

RUB mln 1H 2017 1H 2016 Change LTM[1]
Sales volumes, tonnes 6,936.3 833.1 8.3x 13,417.6
Revenue 3,343.4 295.8 11.3x 6,650.0
Operating profit 1,651.2 13.8 119.5x 3,332.2
Operating EBIT 1,363.1 -88.0 - 2,828.4
EBIT/kg 196.5 - - 210.8
Operating EBITDA 1,516.0 -55.0 - 3,092.7
Net profit from continuing operations 57.7 -88.0 - 2,783.8

Source: Company IFRS financial statements for 1H 2017, management accounts

Contacts for media

Moscow
Denis Denisov
Mobile: +7-985-410-3544
denisov@em-comms.com

Moscow/London
Tom Blackwell
Mobile: +7-919-102-9064, +44-7432-680606
blackwell@em-comms.com

London
Maria Levitov
Mobile: +44 7553 092 429
levitov@em-comms.com

New York
Sergii Pershyn
Mobile: +1 929 855 8188
pershyn@em-comms.com

This document (the "Document") has been prepared for the purpose of the proposed open subscription offering of securities of PJSC Russian Aquaculture, OGRN 1079847122332, INN 7816430057 (also the "Company") in the form of thirty-two million, seven hundred sixty-nine thousand, two hundred twenty-three (32,769,223) newly issued uncertificated registered ordinary shares with a par value of one hundred roubles (RUB 100) each, state registration number 1-01-04461-D of 05 October 2017 (also the "shares", "securities", "securities of PJSC Russian Aquaculture").

This Document is published for information purposes, solely and only in connection with the potential future offering of the securities of PJSC Russian Aquaculture.

This Document is not a prospectus, a resolution to issue securities, an offer to buy securities or any assets or to subscribe to securities or to sell the securities or any assets, is not a public offer or invitation to make offers, is not an advertisement of securities, guarantee or promise to sell securities or any assets or to offer securities or enter into any agreement, and should not be interpreted as such.

This Document must not be treated as and is not a recommendation to acquire securities of PJSC Russian Aquaculture or any other securities or assets mentioned herein.

This Document is not intended to serve as a basis for making any investment decisions.

The information contained in this Document may change considerably. This Document does not provide exhaustive information about PJSC Russian Aquaculture required for examining the Company, making any conclusions or investment decisions.

PJSC Russian Aquaculture and lead managers reserve the right to change, at any time and to any extent, any information in this Document without giving reasons or notice.

By serving this Document, neither the lead managers, nor PJSC Russian Aquaculture accept any responsibility, including responsibility for changing or updating this Document or correcting any inaccuracies found therein. Transfer, distribution or publication of this Document does not in any manner oblige the lead managers or PJSC Russian Aquaculture to effect any transactions. No information provided or mentioned in this Document gives rise to any contractual obligations.

No information about any plans and any future events contained in this Document is definite; it may differ significantly from facts and events, which will actually occur in the future. Any recipient of this Document shall use the information contained herein at their own discretion and risk.

Recipients of this Document shall be aware that it does not contain any representations or warranties or assurances or obligations with regard to future events and facts, and any actual future results, events and facts may differ materially from the information presented herein. Consequently, neither the lead managers and PJSC Russian Aquaculture nor their affiliates, employees, officers, representatives, agents, advisors or consultants provide (or will provide in the future) any representations, warranties, assurances or obligations with regard to the occurrence, accuracy, feasibility or attainability of such plans or any future events or facts.

Neither the lead managers nor PJSC Russian Aquaculture and its affiliates, employees, officers, representatives, agents, advisors or consultants shall bear any liability for any losses, direct or indirect, arising as a result of the use of this Document or information contained herein, or for any faults or omissions contained herein. 

Neither PJSC Russian Aquaculture nor its shares have been registered or otherwise approved for issuance in jurisdictions other than the Russian Federation, and investors need to independently verify that these shares and their eligibility to buy such shares comply with the applicable laws of the jurisdictions of their incorporation and/or operations.

INFORMATION CONTAINED HEREIN IS NOT INTENDED FOR PUBLICATION OR DISTRIBUTION, DIRECT OR INDIRECT, IN THE USA, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTIONS WHERE THE OFFERING OR SALE OF SECURITIES IS PROHIBITED BY APPLICABLE LAWS. INFORMATION CONTAINED HEREIN MAY ONLY BE USED FOR INFORMATIONAL PURPOSES. IT IS NOT AND SHALL NOT BE TREATED AS THE OFFERING OF SECURITIES IN THE USA, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION.

NO SECURITIES OF PJSC RUSSIAN AQUACULTURE HAVE BEEN OR WILL BE REGISTERED IN ACCORDANCE WITH THE UNITED STATES SECURITIES ACT OF 1933 (AS AMENDED) (THE "SECURITIES ACT") OR IN ACCORDANCE WITH THE LAWS OF ANY STATE, AND THEY MAY NOT BE OFFERED OR SOLD IN THE USA.

THE OFFERING OF SECURITIES HAS NOT AND WILL NOT BE REGISTERED IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF AUSTRALIA, CANADA OR JAPAN.

In the United Kingdom, this Document is only intended for and addressed to (i) persons who are investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) high net worth companies and other persons that have the legal right to such information in accordance with Article 49(2)(a)-(d) of the Order, (iii) certified high net worth individuals, certified sophisticated investors or self-certified sophisticated investors pursuant to Articles 48, 50 and 50A, respectively, of the Order; and (iv) persons that are otherwise legally entitled to receive this Document (all such persons indicated in items (i), (ii), (iii) and (iv) shall be jointly referred to as the "relevant persons"). Any securities hereunder will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will only be sent to or signed with, the relevant persons. A person other than a relevant person shall not act or rely on this Document or any of its contents.

In any European Economic Area member state that has implemented Directive 2003/71/EC (including the Directive and amendments thereto to the extent they are implemented in the relevant member state - the "Prospectus Directive"), this Document is only intended for and communicated to qualified investors in that member state as defined in the Prospectus Directive, and other persons that have the legal right to receive this Document. No person other than a relevant person or a qualified investor may act or rely on this Document or any of its contents.

In some jurisdictions, the publication of this Document or any information contained herein may be restricted by the law or applicable regulations or prohibited altogether. This Document is not intended for communication to persons from jurisdictions where this Document, any information contained herein, its communication or receipt may be deemed unlawful. Recipients of this Document shall be deemed aware of the requirement to comply with the applicable restrictions and conditions.




[1] Last twelve months - starting from September 1, 2016 to August 31, 2017 basing on management accounts excl. revaluation of biological assets