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Results of the voluntary tender offer for TMK ordinary shares made by Volzhsky Pipe Plant

PAO “TMK” (LSE: TMKS; MOEX: TRMK), one of the world’s leading producers of tubular products for the oil and gas industry (“TMK” or the “Company”), announces the initial results of the voluntary tender offer made by JSC Volzhsky Pipe Plant, a wholly-owned subsidiary of TMK (“VTZ”), to acquire up to 358,758,064, or 34.7%, of the ordinary shares of TMK at a cash price of RUB 61 per ordinary share (the “Voluntary Tender Offer”).

As previously announced, the Voluntary Tender Offer was received by TMK on 18 May 2020 and was open for acceptance from 19 May 2020 until 27 July 2020 (the “Expiration Date”). 

Based on the information received by VTZ from the Company’s registrar, 229,958,764 ordinary shares of TMK were tendered into the Voluntary Tender Offer prior to the Expiration Date, which represents approximately 22.3% of the total number of issued ordinary shares of TMK.

Pursuant to the Voluntary Tender Offer document and the Russian Joint-Stock Companies Law (the “JSC Law”), the ordinary shares of TMK that were tendered into the Voluntary Tender Offer prior to the Expiration Date were blocked in the accounts of the shareholders and will be transferred to VTZ following payment of the purchase price.

The purchase price must be transferred to the bank accounts of the shareholders or nominee holders registered in the shareholders’ register of TMK within 17 days of the Expiration Date (i.e. by 13 August 2020, inclusive). The period of transfer of the purchase price to the shareholders who hold tendered shares through nominee holders depends on the number of nominee holders through which the shares are held.

Following completion of settlements under the Voluntary Tender Offer, the remaining shares in free-float are expected to constitute approximately 12.5% of the total number of issued ordinary shares of TMK, including 2.9% represented by depositary receipts.

Additional information on the procedure for the transfer and payment for the tendered ordinary shares of TMK is set out in the Voluntary Tender Offer document and Articles 84.1, 84.2 and 84.3 of the JSC Law. A copy of the Voluntary Tender Offer document, together with the Information Letter in relation to the Voluntary Tender Offer, is available on the Company’s website at: www.tmk-group.ru, https://www.tmk-group.ru/voluntary_tender_offer, https://www.tmk-group.com/voluntary_tender_offer. 

Certain Russian Tax Considerations

As required under the Russian law, VTZ will, subject to limited exceptions, act as a tax agent with respect to the payment of the purchase price in relation to the ordinary shares of TMK sold by individual shareholders. In the event a shareholder fails to provide documents confirming the acquisition cost of the shares sold in the Voluntary Tender Offer or the applicability of an exemption, VTZ will be required to withhold Russian tax at the applicable rate from the entire amount of the proceeds paid by VTZ for the shares tendered by such shareholders. Shareholders who tendered their shares should carefully review the information letter on certain tax matters available at: www.tmk-group.ru, https://www.tmk-group.ru/voluntary_tender_offer, https://www.tmk-group.com/voluntary_tender_offer and consult with their 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.

Cancellation of the GDR listing

As previously announced, the Board of Directors of the Company, at its meeting on 8 April 2020, determined that retaining the Company’s listing of its global depositary receipts (the “GDRs”) on the London Stock Exchange is not a strategic priority for the Company and resolved to proceed with cancelling the GDR listing on the London Stock Exchange following the completion of the Voluntary Tender Offer. The Company will proceed with cancelling the listing of its GDRs on the London Stock Exchange, and will make further announcements as required under the UK Listing Rules and other applicable laws and regulations. The Company also intends to proceed with the termination of its Regulation S and Rule 144A GDRs programmes and its Level 1 American depositary shares programme.

The Voluntary Tender Offer was accepted by over 64% of the Company’s free-float shareholders.  In light of the high take up of the Voluntary Tender Offer evidencing shareholders’ interest in the transaction, the Company may consider another repurchase of its ordinary shares approximately at the same price level as, but in any event not higher than, the price of the Voluntary Tender Offer. Any such repurchase will be subject to consideration and approval by the Company’s Board of Directors and the receipt of all necessary corporate and, if applicable, statutory approvals; no assurance can be given at this time that such approvals will be obtained or that any further share purchase transaction would be announced and completed.

For more information:

TMK IR Department:

Irina Yarotskaya

Tel: +7 (495) 775-7600

IR@tmk-group.com

TMK PR Department:

Fedor Klimkin

Tel: +7 (495) 775-7600

PR@tmk-group.com

Cautionary Statement Regarding Forward-Looking Statements

Some of the information in this document may contain or refer to projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward-looking statements by terms such as “expect”, “believe”, “anticipate”, “estimate”, “forecast”, “intend”, “will”, “could”, “may”, or “might” the negative of such terms or other similar expressions. These statements are only predictions and are based upon various assumptions which are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control. The Company may fail to achieve or accomplish these plans or predictions. The Company does not necessarily intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries in which the Company operates, the impact of various external market factors, regulatory developments, as well as many other risks specifically related to the Company and its business and operations.

Statement Regarding Inside Information

This announcement contains inside information. The subject matter, the identity of the issuer, the identity of the persons making the notification and their titles, and the date and time of the notification are all as set forth above.

Important Notice

THIS PRESS RELEASE IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR ADVERTISEMENT OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SHARES OR OTHER SECURITIES OF THE COMPANY, NOR SHALL ANY PART OF IT NOR THE FACT OF ITS DISTRIBUTIONS FORM PART OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR INVESTMENT DECISION RELATING THERETO, NOR DOES IT CONSTITUTE A RECOMMENDATION REGARDING SHARES OR SECURITIES OF THE COMPANY.

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS ADDRESSED EXCLUSIVELY TO THE HOLDERS OF ORDINARY SHARES AND, TO THE EXTENT APPLICABLE, HOLDERS OF REGULATION S GLOBAL DEPOSITARY RECEIPTS, RULE 144A GLOBAL DEPOSITARY RECEIPTS AND LEVEL 1 AMERICAN DEPOSITARY SHARES (COLLECTIVELY, “DRS”) OF TMK. DRS, TO WHICH THIS ANNOUNCEMENT 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 DATED 22 APRIL 1996 NO. 39‑FZ “ON THE SECURITIES MARKET”, AS AMENDED (THE “RUSSIAN SECURITIES MARKET LAW”). ANY INFORMATION IN THIS ANNOUNCEMENT AND RELATED DOCUMENTS IN RESPECT OF DRS OF TMK IS ADDRESSED IN THE RUSSIAN FEDERATION SOLELY TO PERSONS WHO ARE “QUALIFIED INVESTORS” AS DEFINED IN THE RUSSIAN SECURITIES MARKET LAW.

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.

THE VOLUNTARY TENDER OFFER WAS MADE TO SHAREHOLDERS OF TMK 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 TO THE EXTENT APPLICABLE. THE VOLUNTARY TENDER OFFER WAS MADE BY VTZ AND NO ONE ELSE.

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY U.S. STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY APPROVED OR DISAPPROVED OF THE VOLUNTARY TENDER OFFER, PASSED UPON THE FAIRNESS OR MERITS OF THE VOLUNTARY TENDER OFFER OR DETERMINED WHETHER THE VOLUNTARY TENDER OFFER IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

THIS ANNOUNCEMENT, AND ANY INVESTMENT ACTIVITY TO WHICH IT RELATES, IS AVAILABLE ONLY TO (I) PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM, (II) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”), (III) HIGH NET WORTH COMPANIES FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, (IV) PERSONS WITHIN THE SCOPE OF ARTICLE 43 OF THE ORDER, OR (V) ANY OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE MADE UNDER THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS ANNOUNCEMENT MAY NOT BE ACTED OR RELIED ON IN THE UNITED KINGDOM BY ANYONE WHO IS NOT A RELEVANT PERSON.

TMK IS A COMPANY ORGANISED UNDER THE LAWS OF THE RUSSIAN FEDERATION. THE VOLUNTARY TENDER OFFER WAS MADE SOLELY PURSUANT TO RUSSIAN LAW AND, IN THE CASE OF SHAREHOLDERS OF TMK RESIDENT IN THE UNITED STATES, SECTION 14(E) OF THE EXCHANGE ACT AND REGULATION 14E THEREUNDER TO THE EXTENT APPLICABLE. THE VOLUNTARY TENDER OFFER WAS NOT MADE OR INTENDED TO BE MADE PURSUANT TO THE PROVISIONS OF ANY OTHER LAW. THE VOLUNTARY TENDER OFFER IS SUBJECT TO DISCLOSURE AND PROCEDURE REQUIREMENTS OF RUSSIA WHICH ARE DIFFERENT FROM THOSE OF THE UNITED KINGDOM OR THE UNITED STATES. IN ADDITION, U.S. INVESTORS SHOULD BE AWARE THAT THE VOLUNTARY TENDER OFFER DOCUMENT WAS PREPARED IN A FORMAT AND STYLE, WHICH DIFFER FROM THE U.S. FORMAT AND STYLE. FURTHERMORE, THE PAYMENT AND SETTLEMENT PROCEDURE WITH RESPECT TO THE VOLUNTARY TENDER OFFER FOR ORDINARY SHARES DIFFERS FROM U.S. PAYMENT AND SETTLEMENT PROCEDURES, PARTICULARLY WITH REGARD TO THE DATE OF PAYMENT OF CONSIDERATION.

Results of the voluntary tender offer for TMK ordinary shares made by Volzhsky Pipe Plant