At the in-absentia meeting held on September 12, the Supervisory Board of ALROSA considered the change of the diamond miner’s degree of participation in the capital of OAO GMK Timir, according to the company’s press release received by Rough&Polished.
It was decided to approve the change of the company's stake in Timir from 100% to 49% minus 1 share by selling the shares of Timir to Evraz Plc on condition that 1 share of Timir will be sold to Vnesheconombank, while the parties will conclude a shareholders’ agreement.
The shareholders' agreement between the parties will include the following terms:
1) Vnesheconombank will be granted a pre-emptive right to buy shares from Timir at a price defined by an international independent appraiser and agreed to by all the shareholders in case of stock sale by one of the Timir shareholders;
2) The sale of shares by one of the shareholders will be only possible in case of fully completed key development stages in the iron field and its opening in accordance with the two licenses issued to Timir, namely:
- In case of completed exploration in the license area and a duly provided geological report on the estimated reserves split between the C1 and C2 categories to be submitted for state expert appraisal of mineral reserves;
- In case of due approval of industrial development project report for the plots containing approved reserves in the license area;
- In case the first stage of the mining operation is commissioned;
- In case the mining operation will reach its full capacity;
3) Timir will be transformed in a closed joint-stock company under the laws of the Russian Federation within a period not later than one year from the date of the shareholders' agreement;
4) The Chief Executive Officer of Timir will be appointed from among the candidates proposed by Evraz plc (London);
5) The Financial Director of Timir will be appointed from among the candidates proposed by ALROSA.
In addition, the Supervisory Board approved several related-party transactions and agreed to amend the Regulation on Internal Control over Financial and Economic Activity of ALROSA to bring it in line with the Regulation on Organization of Trade in Stock Markets approved by Russia’s Federal Service for Financial Markets. This is one of the conditions to include ALROSA’s stock into the A level quotation list.
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