Company Announcements

Mail.ru Proposes Offering of Convertible Bonds

Source: RNS
RNS Number : 9167Z
Mail.ru Group Limited
23 September 2020
 

23rd September 2020                                                                                              

 

THIS STOCK EXCHANGE RELEASE AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, CYPRUS, JAPAN, SOUTH AFRICA, THE BRITISH VIRGIN ISLANDS OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement (the "Announcement") contains inside information for the purposes of Article 7 of the EU Market Abuse Regulation (Regulation (EU) No. 596/2014) ("MAR").

 

 

Mail.ru Group Announces Proposed Offering of Convertible Bonds

 

This stock exchange release should be read in its entirety. In particular, the information provided in the "Important Notices" section of this stock exchange release should be read and understood.

MAIL.RU GROUP LIMITED (LSE and MICEX-RTS: "MAIL") ("Mail.ru Group" or the "Company"), announces the launch of an offering of approximately USD 400 MM in aggregate principal amount of Senior Unsecured Convertible Bonds due 2025 (the "Bonds").

Concurrently with the offering of the Bonds, the Company has today separately announced the launch of an offering of newly issued Global Depository Receipts of the Company corresponding to a capital increase of approximately USD 200 MM (the "Capital Increase"), through an accelerated bookbuild process to certain institutional investors.

Further, the Company announces that pursuant to the Articles of Association of the Company a written resolution has been passed by members of the Company holding shares which represent at least 65% of the total number of votes attached to the issued and outstanding shares, approving: (i) the issuance of new Company shares in the form of GDRs to be offered in the Capital Increase, (ii) the issuance of shares in the form of GDRs which the holders of the Bonds are entitled on conversion thereof and (iii) the issuance of up to 12,150,000 new ordinary shares at par value to Mail.ru Employee Benefit Trustees Limited for the purposes of making awards under the existing and future incentive plans for employees, directors, officers and consultants of the Company and its subsidiaries. The written resolution has been filed on the National Storage Mechanism appointed by the Financial Conduct Authority and can be accessed at https://data.fca.org.uk/#/nsm/nationalstoragemechanism or on the Group's website at https://corp.mail.ru/en/investors/offering/.

Convertible Bonds

The Bonds will be convertible into Global Depositary Receipts ("GDRs") of Mail.ru Group listed on the London Stock Exchange, each representing one ordinary share of Mail.ru Group.

The Bonds will be issued at 100% of their principal amount with a denomination of USD 200,000 each and - unless previously converted, repurchased or redeemed - will be redeemed at par on 1 October, 2025. The Bonds will be offered with an annual interest rate between 1.375% and 1.875% payable semi-annually, and a conversion premium of 40% to 45% above the reference price, being the placement price of each Mail.ru Group GDR in the concurrent Capital Increase and offering of GDRs. The Bonds are subject to a cash settlement option at the discretion of the Company. The initial conversion price of the Bonds will be subject to adjustments for any dividends as well as other standard convertible market anti-dilution adjustments. Bondholders will have the right to convert their Bonds into GDRs at the then prevailing conversion price on any date from 1 October, 2021, until the date falling seven days prior to the final maturity date (unless previously redeemed).

The Company will be entitled to redeem the Bonds at any time (i) on or after 22 October, 2023 if the value of the GDRs deliverable upon conversion of the Bonds exceeds 130% of the principal amount of the Bonds over a certain period or (ii) if 15% or less of the aggregate principal amount of the Bonds remain outstanding.

The pricing of the offering of the Bonds will be determined on the basis of an accelerated bookbuilding. The Bonds are expected to be issued by Mail.ru Group on or around 1 October, 2020, and Mail.ru Group will make an application for the Bonds to be admitted to trading on an internationally recognised exchange within 60 days from such date.

The Company has agreed to a lock-up period commencing on the pricing date of the Bonds and ending 90 days after the settlement date of the Bonds, subject to customary exceptions including in relation to existing employee share schemes.

The proceeds raised by the Company from the offering of the Bonds and the concurrent offering of the GDRs in the Capital Increase will be used to:

1)   Fund development and organic growth across existing verticals

2)  Maintain flexibility to pursue strategic M&A opportunities in high growth verticals, with particular focus on those stimulated by the pandemic

3)   Finance investments into O2O and AliExpress Russia JVs, including:

·      Up to RUB4.6 Bn in KPI based payments to be made into O2O JV over the next 6 months

·      Remaining contribution into AliExpress Russia JV of $82MM

4)   Finance loan(s) to the members of the Company's group to be used for the purposes described above.

 

This stock exchange release does not constitute an offer of or invitation to subscribe for the Bonds or the GDRs, and the offering of the Bonds does not constitute a public offering in any jurisdiction.

The distribution of this stock exchange release in certain jurisdictions may be restricted by law. Persons into whose possession this stock exchange release comes are required by the Company and the Global Coordinator to inform themselves about and to observe any such restrictions.

The Bonds will be offered solely to institutional investors in certain jurisdictions, outside the United States.

Concurrent Offering of Existing GDRs by the Global Coordinator

 

The Global Coordinator has informed the Company that concurrently with the issuance of the Bonds and the Capital Increase, it intends to conduct a simultaneous placement of existing GDRs of the Company (the "Concurrent Offering of Existing GDRs" or the "Delta Placement") on behalf of subscribers of the Bonds who wish to sell such GDRs in short sales in order to hedge the market risk of an investment in the Bonds, at a placement price to be determined by way of an accelerated bookbuilding process. The Company will not receive any proceeds from the Concurrent Offering of Existing GDRs / the Delta Placement.

 

 

 

Inside Information Notice

 

This stock exchange release relates to the disclosure of information that qualified, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (Regulation (EU) No. 596/2014) ("MAR").

 

Morgan Stanley is acting as sole Global Coordinator and Bookrunner for the offering of the Bonds.

 

For further information please contact:

Investors

Tatiana Volochkovich

Phone: +7 495 725 6357 extension: 3434

Mobile: +7 905 594 6604

Email: t.volochkovich@corp.mail.ru

 

Press:
Sergei Luchin
Mobile: +7 915 223 35 71

Email: s.luchin@corp.mail.ru

 

About Mail.ru Group:

Mail.ru Group (MAIL, listed since November 5, 2010) is the largest internet business in Russia in terms of total daily audience (Mediascope WEB-Index Desktop&Mobile, Russia 0+, population aged 12+, June 2020).

 

Mail.ru Group is developing the leading domestic internet communications and entertainment platform. The company owns Russia's two largest Russian language social networks, VKontakte (VK) and Odnoklassniki (OK), leading email service, one of Russia's largest internet portals (Mail.ru), and four instant messaging services. The company also holds the international gaming brand MY.GAMES, with a portfolio of hundreds of popular games for a range of platforms and over 605 million users worldwide. In 2019, Mail.ru Group Tech Lab was launched with a primary focus on technology and innovation development.

Mail.ru Group is a shareholder of AliExpress Russia JV along with Alibaba Group, MegaFon and Russian Direct Investment Fund. The company partners with Sberbank to jointly develop O2O service platform targeting food delivery and taxi markets.

 

Important Notices

This stock exchange release has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Morgan Stanley & Co. International plc (the "Global Coordinator") or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this stock exchange release or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

 

THIS STOCK EXCHANGE RELEASE AND THE OFFERING WHEN MADE ARE ONLY directed at and may only be COMMUNICATED TO (I) IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(e) OF THE PROSPECTUS REGULATION (Regulation (EU) 2017/1129) ("QUALIFIED INVESTORS"); AND (II) IN THE UNITED KINGDOM, at Qualified Investors and who are also (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons").

 

Any investment or investment activity to which this stock exchange release relates is only available to, and will be engaged in only with, Relevant Persons. Persons distributing this stock exchange release must satisfy themselves that is lawful to do so. This stock exchange release is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire securities in any jurisdiction in which any such offer or solicitation would be unlawful. This stock exchange release may not be distributed, transmitted, published, reproduced or otherwise made available to any other person, in whole or in part, directly or indirectly, for any purposes whatsoever. In particular, this stock exchange release should not be distributed, transmitted, published, reproduced or otherwise made available, directly or indirectly, in, into or from Australia, Canada, Cyprus, Japan, the Republic of South Africa, the British Virgin Islands or the United States, its territories or possessions or in any other jurisdiction outside of the United Kingdom where such distribution or availability may lead to a breach of any law or regulatory requirements. Any failure to comply with this restriction may constitute a violation of the securities laws of such jurisdictions. 

 

PROHIBITION OF SALES TO EEA AND UK RETAIL INVESTORS - THE SECURITIES ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR IN THE UK WITHIN THE MEANING OF REGULATION (EU) NO 1286/2014 (AS AMENDED OR SUPERSEDED, THE "PRIIPS REGULATION"). CONSEQUENTLY NO KEY INFORMATION DOCUMENT UNDER THE PRIIPS REGULATION HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE SECURITIES OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR IN THE UK MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.

 

The distribution of this stock exchange release and the Securities in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Global Coordinator or any of their respective affiliates, agents, directors, officers or employees that would permit an offering of the Bonds or the GDRs (both separately, a "Security" and together, the "Securities") or possession or distribution of this stock exchange release or any offering or publicity material relating to the offering of the Bonds, the Capital Increase and/or the Concurrent Offering of Existing GDRs or any of the Securities (together, "Offer Materials") in any jurisdiction where action for that purpose is required. Persons into whose possession this stock exchange release or any other Offer Materials comes are required by the Company and the Global Coordinator to inform themselves about, and to observe, any such restrictions.

 

This stock exchange release and any other Offer Materials are not intended as investment advice and under no circumstances are they to be used or considered as an offer to sell, or a solicitation of an offer to buy, any Security nor a recommendation to buy or sell any Security.

 

An investment in the Securities includes a significant degree of risk. Any decision to purchase any of the Securities should only be made on the basis of an independent review by a prospective investor of the Company's publicly available information and the terms of the Securities. Each person receiving this stock exchange release or any other Offer Materials should consult his/her professional advisers to ascertain the suitability of the Securities as an investment. Neither the Global Coordinator nor any of its respective affiliates accept any liability arising from the use of, or make any representation as to the accuracy or completeness of, this stock exchange release or any other Offer Materials or the Company's publicly available information. The information contained in this stock exchange release or any other Offer Materials is subject to change in its entirety without notice up to the date of issue of the Bonds.

 

The Securities have not been and will not be registered under the US Securities Act 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold directly or indirectly in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or any other jurisdiction of the United States. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES ARE BEING OFFERED AND SOLD OUTSIDE OF THE UNITED STATES IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT.

 

 

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (B) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Securities have been subject to a product approval process, which has determined that: (I) THE TARGET MARKET FOR THE SECURITIES IS ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS DEFINED IN MIFID II; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE SECURITIES TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE SECURITIES (A "DISTRIBUTOR") SHOULD TAKE INTO CONSIDERATION THE MANUFACTURER'S TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR SUBJECT TO MIFID II IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE SECURITIES (BY EITHER ADOPTING OR REFINING THE MANUFACTURER'S TARGET MARKET ASSESSMENT) AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS. Notwithstanding the Target Market Assessment, distributors should note that: the price of the securities referred to herein may decline and investors could lose all or part of their investment; the Securities offer no guaranteed income and no capital protection; and an investment in the Securities is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.

 

The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offering of the Bonds, the Capital Increase and/or the Concurrent Offering of Existing GDRs and/or the Securities.

 

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase or take any other action whatsoever with respect to the securities referred to herein. Each distributor is responsible for undertaking its own target market assessment in respect of the securities referred to herein and determining appropriate distribution channels. 

 

The Global Coordinator and any of its affiliates may enter into financing arrangements (including swaps, warrants or contracts for differences) with investors in connection with which the Global Coordinator and any of its respective affiliates may take up a portion of the Bonds in the offering of the Bonds and/or may acquire GDRs as a principal position and in that capacity may from time to time acquire, hold or dispose of Bonds, GDRs and other securities of the Company or its group or related investments in connection with the offering of the Bonds, the Capital Increase, the Concurrent Offering of Existing GDRs or otherwise. The Global Coordinator does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

 

The Global Coordinator is authorised by the Prudential Regulatory Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority. The Global Coordinator is acting exclusively for the Company and no one else in connection with the offering of the Bonds, the Capital Increase and/or the Concurrent Offering of Existing GDRs, the content of this stock exchange release and other matters described in this stock exchange release. The Global Coordinator will not regard any other person as their respective clients in relation to the offering of the Bonds, the Capital Increase and/or the Concurrent Offering of Existing GDRs, the content of this stock exchange release and other matters described in this stock exchange release and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice to any other person in relation to the Securities, the content of this stock exchange release or any other matters referred to in this stock exchange release.

 

The Global Coordinator and its affiliates may have engaged in transactions with, and provided various commercial banking, investment banking, financial advisory transactions and services in the ordinary course of their business with the Company and/or its affiliates for which they would have received customary fees and commissions. The Global Coordinator and its affiliates may provide such services to the Company and/or its affiliates in the future. 

 

Potential investors who are in any doubt about the contents of this stock exchange release or any other Offer Materials should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser. It should be remembered that the price of Securities and the income from them can go down as well as up.

 

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this stock exchange release.

 

 

THIS STOCK EXCHANGE RELEASE HAS NOT BEEN FILED WITH, OR REVIEWED BY, ANY NATIONAL OR LOCAL SECURITIES COMMISSION OR REGULATORY AUTHORITY OF THE UNITED STATES, THE UNITED KINGDOM OR ANY OTHER JURISDICTION, NOR HAS ANY SUCH COMMISSION OR AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS STOCK EXCHANGE RELEASE. ANY REPRESENTATION TO THE CONTRARY MAY BE UNLAWFUL AND MAY BE A CRIMINAL OFFENCE.

 

All references to "US$", "$" or "dollars" are to the lawful currency of the United States of America.

 

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