Today, the Board of Directors of PJSOC Bashneft has adopted resolutions aimed at streamlining the Company's corporate structure and transferring control over a number of its assets under Russian jurisdiction in accordance with a directive from the Government of the Russian Federation.
In particular, the Board of Directors has resolved that PJSOC Bashneft should exit from three of its overseas subsidiaries, Bashneft Trading AG, RusPET Holding B.V. and Siviera Invest Ltd, which are not doing business at present and are to be liquidated.
The Board of Directors has also resolved to establish LLC Bashneft-Invest, a wholly owned subsidiary of PJSOC Bashneft, in Ufa. After obtaining additional corporate approvals, Bashneft-Invest is expected to become the owner of 4,864,168 preferred shares of PJSOC Bashneft (2.7% of its authorized share capital) and 3,428,887 ordinary shares of PJSOC Bashneft (1.9% of its authorized share capital) that are currently recorded on the balance sheet of Bashneft's wholly owned subsidiaries, Bashneft Middle East Ltd and Bashneft Investments S.A. respectively. In addition, the ownership of a 5% stake in LLC Burneftegaz will be transferred to LLC Bashneft-Invest from Bashneft Middle East Ltd.
These deals will not involve any cash outflow from Bashneft Group. After the deals are completed, Bashneft will also exit from Bashneft Middle East Ltd and Bashneft Investments S.A. by liquidating them.
Bashneft is expected to exit from the five above-mentioned overseas subsidiaries before 2017; Bashneft International B.V. (Netherlands), an operator of international projects in Iraq and Myanmar, will then remain the only subsidiary of Bashneft outside Russian jurisdiction.
In accordance with the directive from the Government of the Russian Federation, today Bashneft's Board of Directors has also approved the agenda of the Extraordinary General Meeting of Shareholders to be held on December 1, 2015 by absentee voting. The agenda of the meeting includes the following items:
- Approval of a new version of PJSOC Bashneft’s Charter.
- Approval of a new version of the Regulations on the General Meeting of Shareholders of PJSOC Bashneft.
- Approval of related-party transactions.
The necessity for approving the new versions of the Charter of PJSOC Bashneft and the Regulations on the General Meeting of Shareholders has arisen from amendments to the Federal Law on Joint-Stock Companies and consistent implementation of recommendations of the Code of Corporate Governance by the Company.
Related-party transactions involve potential borrowings in order to finance Bashneft's operations; conclusion of a supplementary agreement with VTB Bank (PJSC) on the issue of bank guarantees; conclusion of a D&O and corporate liability insurance contract and provision of finance to LLC Bashneft-Polyus, which develops the R. Trebs and A. Titov fields.
As the employment contract concluded with Vladimir Nesterenko, General Director of LLC Bashneft-Polyus, expires in December this year, Bashneft's Board of Directors has reappointed him to this position until the end of 2018.