Fix Price weighs potential move from Cyprus to Kazakhstan

Business correspondent
Fix Price will move to Kazakhstan / Photo:

The Russian chain of affordable shops Fix Price Group plans to redomicile from Cyprus to Kazakhstan. The company’s shareholders are going to discuss the issue on November 9, according to the company’s website.

«The company is going to change its location from the Republic of Cyprus to the Republic of Kazakhstan by registering as a legal entity at the Astana International Financial Center (AIFC). The company will be excluded from the Cyprus register of business,» Fix Price Group said.

Once the company is redomiciled, it will adopt its new charter and board of directors, appoint new officials and approve a new financial statement covering the period from January 1 to August 31, 2023, as the Cyprus legislation requires. However, Fix Price Group wants to keep its program of global depository receipts (GDR) and their placement on the London Stock Exchange (LSE) and Moscow Exchange (MOEX). One GDR is equal to one common share. The company’s equity consists of 850 million common shares.

The two discussions are scheduled for November 9 and will take place in Limassol, Cyprus at 3:30 p.m. and 4:00 p.m. (local time). All issues related to redomiciliation and signing of necessary documents will be resolved by Dmitry Kirsanov, Sergey Lomakin and Artem Khachatryan, members of the company’s board of directors. Once the business is domiciled in Kazakhstan, its board of directors will also include Alexey Makhnev and Azamat Akylbekuly.

According to open sources, the firm Best Price (an operational company in Russia) was established in 2007 by Sergey Lomakin and Artem Khachatryan after they successfully sold their retail chain called Kopeyka. The purpose of the new business was to create a retail chain with a new format in Russia. Namely, a chain of shops with fixed prices. In that year, Dmitry Kirsanov, who was in charge of sales in Kopeyka, became the director general of the new retail chain. In 2016, the company opened its first shops in Kazakhstan. As of September 30, 2023, Fix Price ran 262 shops with 1,600 employees in Kazakhstan.

The founders of Fix Price Group control more than two-thirds of the company, 26.9% of its shares are in the open market, 1.8% belong to top executives and 0.1% are reacquired stock. The company reported that the cost of its GDR has grown on MOEX after the announcement of redomiciliation to Kazakhstan. The share price grew from 355.9 rubles ($3.57) to 370 ($3.71) at the closing price of the market on October 9.

Redomiciliation of Polymetal

Russian Polymetal, which redomiciled to Kazakhstan’s AIFC from the British island of Jersey in August of this year, was one of the first foreign companies that officially moved to Kazakhstan. According to the company, 92% of its shareholders voted for the move. Currently, Polymetal is listed on the AIX (an exchange within AIFC) and MOEX. At the same time, the company’s shares are no longer available for trading on the LSE. Polymetal’s stock has been traded on AIX since August 10.

According to CEO Vitaly Nesis, Polymetal International plc is going to sell its Russian assets next year. As Nesis said, the vast majority of shareholders have given their preliminary consent for such a deal. The most optimistic scenario says that Russian assets might be sold within six months, while the more realistic scenario says that they will be sold within six to nine months.

Polymetal announced its plan to split its assets in Russia and Kazakhstan immediately after the Russian full-scale invasion of Ukraine to meet the expectations of investors. However, because of a new edict by President Vladimir Putin, which prohibits assets in key sectors of the Russian economy from being sold to non-residents from «unfriendly» countries, this deal is on the fence.

The biggest shareholder of Polymetal is ICT Group (23%) controlled by Alexander Nesis (older brother of Vitaly Nesis), followed by BlackRock Inc. (9.9%), Fodina B.V. (3.3%), top executives (0.9%) and institutional and private investors (62%).

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