Q&A

This section highlights selected information concerning the Tender Offer and does not contain all the information that may be important to you in deciding whether or not to tender your Securities. To more fully understand the Tender Offer and for a more complete discussion of the terms and conditions of the Tender Offer, you should read carefully this entire Tender Offer Memorandum and GDR Corporate Action Notice.

1.General Matters

  • 1.1 What is the Tender Offer?
    • MICL is inviting Securityholders, other than the Major Shareholders, to submit tenders to sell for cash, at a purchase price of US$9.75 for each Ordinary Share (to be paid in Russian rubles based on the CBR exchange rate effective on the date of the announcement of the results of the Tender Offer) and for each GDR (to be paid in U.S. dollars). On July 13, 2018, the Purchase Price represented a cash premium of US$2.03 and 26.3% per Ordinary Share to the 3-month volume weighted average price of US$7.72 for the period ending on July 13, 2018 (using MOEX daily closing ruble/dollar exchange rates in effect as of the respective period ending on July 13, 2018) and a cash premium of US$1.64 and 20.3% with respect to the closing price per Ordinary Share on the Moscow Exchange on July 13, 2018. On July 13, 2018, the Purchase Price represented a cash premium of US$0.98 and 11.1% per GDR to the 3-month volume weighted average price of US$8.77 for the period ending on July 13, 2018 and a cash premium of US$0.75 and 8.3% with respect to the closing price per GDR on the LSE on July 13, 2018. Holders of Ordinary Shares should note that the Purchase Price for the Ordinary Shares will be paid in Russian rubles at the CBR exchange rate in effect on the date of the announcement of the results of the Tender Offer and that the exchange rate of the U.S. dollar against the Russian ruble is volatile. No assurance can be given as to the CBR U.S. dollar / Russian ruble exchange rate that will be in effect on such date. Moreover, holders of Ordinary Shares should note that there is a significant amount of time (up to five (5) Russian business days) between the date when Ordinary Shares will be transferred to MICL and the date on which holders will receive the Purchase Price for the Ordinary Shares, subject to any fees, expenses, taxes(if withholding is required by applicable law) or other charges. Those who tender Ordinary Shares will not receive interest or any other form of compensation during this period of time or in the event of a delay in the delivery of the Purchase Price for the Ordinary Shares.
    • Securities must be validly tendered prior to the Expiration Time upon the terms and subject to the conditions set forth in the Tender Offer. The Clearing Systems, their respective participants and the brokers or other securities intermediaries through which GDR holders hold their GDRs will establish their own cut-off dates and times for the tender of the GDRs, which will be earlier than the Expiration Time. Holders of Ordinary Shares must also sign a share purchase agreement and, where Ordinary Shares are registered in the register of MegaFon held by IRC, submit a transfer order to IRC for their Securities to be purchased from them.
  • 1.2 Why is MICL making the Tender Offer, how is MICL related to MegaFon, and has the Board of Directors approved the Tender Offer?
    • MICL is making the Tender Offer pursuant to the resolution of its directors dated July 15, 2018 and the resolution of its sole shareholder, the Company, dated July 15, 2018. The Board of Directors approved the principal terms of the Tender Offer and the cancellation of the listing of the GDRs on the London Stock Exchange at its meeting on July 15, 2018.
    • The Board of Directors’ approval followed an evaluation of the benefits of remaining a public company with GDRs listed on the London Stock Exchange and Ordinary Shares listed on the Moscow Exchange. The Board of Directors determined that remaining a public company is not a strategic priority for MegaFon and resolved to proceed with the Tender Offer and the cancellation of the listing of GDRs on the London Stock Exchange following the completion of the Tender Offer. However, due to the complexity and potential costs of delisting the Ordinary Shares from the Moscow Exchange, the Board of Directors has not decided to initiate the process of such a delisting at this time. Following the Tender Offer, it is expected that the Ordinary Shares will be downgraded from their current Level 1 listing to a Level 3 listing due to the free float requirements of the Moscow Exchange. MegaFon will consider a potential delisting of the Ordinary Shares from the Moscow Exchange following completion of the Tender Offer. MegaFon may also consider a termination of the GDR programme following the cancellation of the listing of GDRs on the London Stock Exchange.
    • In connection with its evaluation, the Board of Directors formed a Special Committee, consisting solely of the independent non-executive directors, for the purpose of making a recommendation as to these matters for the consideration of the Board of Directors. On July 13, 2018, the Special Committee unanimously recommended to the Board of Directors that they approve the principal terms of the Tender Offer and the cancellation of the listing of the GDRs on the London Stock Exchange, and the Board of Directors took into account these recommendations in reaching its decision to approve the principal terms of the Tender Offer and the cancellation of the listing of the GDRs.
    • In arriving at these recommendations and decisions, the Special Committee and the Board of Directors considered, among other things, that:
      • In May 2017, the Company announced a change in its business strategy focused on transforming the Company from a traditional telecom operator into an operator of digital opportunities and on becoming the leader in the creation of a digital ecosystem in Russia. The Company believes that it has successfully implemented its immediate objectives under the new strategy. However, the Company believes that its status as a public company willhinder it from taking the next steps that further development of the strategy could require, including broader partnerships with state-owned corporations, transactions with higher risks, investments in infrastructure with lower returns, higher leverage and the need to use available cash for such objectives rather than for dividends. For all these reasons, becoming a private company would provide the Company with enhanced flexibility to achieve its strategic objectives.
      • In furtherance of these objectives, the Company announced on March 15, 2018 an increase in its capital expenditure programme, with capital expenditures in 2018 anticipated to reach an estimated RUB 75-80 billion (compared to RUB 56 billion in 2017), and the Board of Directors has recommended to the shareholders that no dividends be declared or paid and the shareholders have at the annual shareholders’ meeting agreed not to distribute annual dividends for 2017.
      • Despite favorable operating and financial results, the trading of the Company’s Securities has been severely hampered by external factors, including geopolitical uncertainties and an unfavorable political and economic environment. This unfavorable external environment may reduce the attractiveness of equity capital compared to other sources of financing and impact the Company's ability to raise new capital from equity capital markets. The Company believes that the Russian equity market is likely to remain volatile, as international investors become increasingly concerned about the impact of possibly worsening sanctions and counter-sanctions. The Company does not expect, in the short term, any changes in the environment or any immediate stock price catalysts.
      • Maintaining its status as a public company, meanwhile, entails costs and management attention, which the Company believes can be better directed towards achieving its strategic objectives, including merger and acquisition transactions that it may consider from time to time.
      • The Tender Offer provides an exit opportunity for Securityholders, at a premium to current trading prices, before the GDR delisting, the possible termination of the GDR programme, a possible Ordinary Shares downgrade from their current Level 1 listing to a Level 3 listing on the Moscow Exchange and a possible Ordinary Share delisting in the future, while allowing each Securityholder to consider its own specific circumstances. The Company intends to commence the process of cancelling the GDR listing shortly after the successful completion of the Tender Offer. It is not expected that the delisting of the GDRs from the LSE will be accompanied by further repurchases of GDRs. Following the Tender Offer, MegaFon may review whether or not to maintain the GDR programme following the cancellation of the listing, taking into consideration, among other things, the number of GDRs outstanding following the Tender Offer. MegaFon may also consider the possible delisting of Ordinary Shares. Any GDRs and Ordinary Shares acquired by MICL in the Tender Offer, or the Ordinary Shares represented by such GDRs, may be cancelled, sold or used as security for financings by the MegaFon Group, as currency in M&A transactions or otherwise in its discretion.
    • In making these decisions and the other determinations described above, the Special Committee and the Board of Directors also considered MegaFon’s business, operations, financial condition, performance, development prospects and strategy, as well as the risks and challenges inherent in executing its strategy in the current environment; and the effects of the Tender Offer, including those discussed in Section “Certain Effects of the Tender Offer and Potential Risks for Securityholders” of the Tender Offer Memorandum.
    • In connection with the Tender Offer, MICL has engaged Credit Suisse and UBS as Dealer Managers and Debevoise & Plimpton LLP as legal counsel. On July 15, 2018, Morgan Stanley delivered to the Special Committee and the Board of Directors its opinion that as of such date the consideration to be received by the Securityholders to whom the Tender Offer is addressed is fair from a financial point of view to such Securityholders.
    • USM Holdings, a major shareholder of MegaFon, confirmed, at the request of the Company, that it agrees with the decision to cancel the listing of the GDRs following the completion of the Tender Offer as it no longer considers that maintaining public company status is a strategic priority for MegaFon.
  • 1.3 Does the management of MICL or MegaFon recommend Securityholders participate in the Tender Offer?
    • None of MegaFon, MICL, their respective boards of directors and management, the GDR Tender Agent, the GDR Depositary, the Dealer Managers, IRC, NRC Stock Market or the professional advisors of each, is making any recommendation to the Securityholders of MegaFon as to whether or not to tender Securities in the Tender Offer
  • 1.4 Does MICL have the financial resources to purchase the Securities pursuant to the Tender Offer?
    • MICL plans to fund the Purchase Price for the Securities tendered in the Tender Offer through financing provided by MegaFon in the amount of up to RUB 117 billion. The Tender Offer is subject to the condition that the shareholders’ meeting of MegaFon will approve such financing on or about August 17, 2018. Therefore, it is expected that MICL will by the Expiration Time have funds to complete the Tender Offer. See Section, “Certain Conditions of the Tender Offer”of the Tender Offer Memorandum. MegaFon expects to fund such financing with available cash at hand and funds provided by bank facilities and other available debt instruments. If the financing is not approved by shareholders and no other financing is available, MICL may be required to terminate the Tender Offer.
  • 1.5 Will USM Holdings and Gazprombank Group participate in the Tender Offer?
    • The Tender Offer is not being made to the Major Shareholders and, accordingly, neither USM Holdings nor Gazprombank Group will be participating in the Tender Offer. Additionally, MICL, which is making the offer, will not tender any Securities which it holds.

  • 2. Certain Effects of the Tender Offer and Potential Risks for Securityholders

  • 2.1 What are some of the effects of the Tender Offer?
    • Securityholders who tender their Securities in the Tender Offer will forego any potential increase in the value of the Securities following the Tender Offer.
      While the Purchase Price represents a cash premium of US$1.64 and 20.3% with respect to the closing price per Ordinary Share on the Moscow Exchange on July 13, 2018, and a cash premium of US$0.75 and 8.3% with respect to the closing price per GDR on the LSE on July 13, 2018, Securityholders, by tendering their Ordinary Shares and/or GDRs, will forego any potential increase in the value of the Securities following the Tender Offer. There can be no assurance as to the market value of Securities in the future.
    • Securityholders who do not tender their Securities in the Tender Offer will remain Securityholders of MegaFon and bear the attendant risks associated with owning those Securities.
      To the extent Securityholders retain an equity interest in MegaFon, either because they did not participate in the Tender Offer or tendered only part of their holdings, they will continue to be Securityholders of the Company. As a result, those Securityholders will bear certain risks associated with holding Securities of MegaFon. Securities held following the completion of the Tender Offer may in the future be sold at a price significantly higher or lower than the Purchase Price, and no assurance can be given as to the price at which a Securityholder may be able to sell his or her Securities in the future. In addition, the Tender Offer is likely to result in a reduction of the overall liquidity of the Company’s Securities, which could affect the ability of Securityholders to freely trade their Securities and have an adverse effect on the price and liquidity of the Securities. And Securityholders should note that the Board of Directors has recommended to the shareholders that no dividends be declared or paid and the shareholders have at the annual shareholders’ meeting agreed not to distribute annual dividends for 2017.
    • MegaFon will cancel the Standard Listing of GDRs and may terminate its GDR programme.
      As discussed in Section “Purpose of the Tender Offer” of the Tender Offer Memorandum, at its meeting on July 15, 2018, the Board of Directors determined that maintaining public company status is not a strategic priority for the Company and resolved to proceed with cancelling the GDR listing on the LSE following the Tender Offer. It is not expected that the delisting of the GDRs from the LSE will be accompanied by further repurchases of GDRs. Under the UK Listing Rules, the listing may be cancelled by giving at least 20 business days’ notice of the intended cancellation through an announcement of a Regulated Information Service, but does not require approval of GDR holders or any purchase of the outstanding GDRs. Following cancellation of the listing of the GDRs on the LSE, the GDRs will no longer trade on the LSE and it is unlikely that a liquid trading market for the GDRs would develop. As a result, the price of GDRs would become more volatile and it would be more difficult to complete a buy or sell order for the GDRs.
      Furthermore, following the delisting from the LSE, MegaFon will no longer be subject to the disclosure and other obligations under the UK Listing, Disclosure and Transparency Rules and EU Market Abuse Regulation, and the level and type of disclosures provided to holders of Ordinary Shares following the cancellation of the GDR listing may be different from that provided to GDR holders.
      MegaFon may review whether or not to maintain the GDR programme following the cancellation of the listing, taking into consideration, among other things, the amount of GDRs outstanding following the Tender Offer. MegaFon may also consider the possible delisting of Ordinary Shares. Any termination of the programme may be effected upon giving a 90-day notice to The Bank of New York Mellon, as depositary for the GDR program, which will then notify the GDR holders. Upon receipt of notice of the termination, any GDR holder who wishes to receive Ordinary Shares in exchange for their GDRs will need to comply with the procedures under the Deposit Agreement(including payment of applicable fees) for receiving Ordinary Shares underlying the GDRs they hold. With respect to any GDR holders who do not elect to exchange their GDRs for Ordinary Shares, or are not permitted to hold Ordinary Shares, the GDR Depositary in consultation with MegaFon will sell the Ordinary Shares underlying the GDRs remaining outstanding after the termination date and distribute the net proceeds to the former GDR holders. No decision has yet been made whether or not to terminate the programme, and there can be no assurance that the GDR programme will be maintained following the Tender Offer.
    • The listing of the Ordinary Shares on the Moscow Exchange may be transferred to a Level 3 listing following the Tender Offer and such listing may be cancelled in the future.
      Following the Tender Offer, the Company expects that it will only qualify for a Level 3 listing due to the free float requirements of the Moscow Exchange, and the listing will be transferred to this category. This listing level downgrade may have a material adverse effect on the trading price and liquidity of the Ordinary Shares.
      Although the Board of Directors has not decided to pursue a delisting of the Ordinary Shares at the present time, it is possible that the Board of Directors may in the future decide to recommend that shareholders approve a delisting of the Ordinary Shares. A delisting of Ordinary Shares from the Moscow Exchange is subject to shareholders’ approval by a three-fourths majority vote of holders of the voting shares participating in the respective shareholders’ meeting. Shareholders voting against or not participating in the voting on the delisting may request that the Company redeem their Ordinary Shares. The purchase price for such Ordinary Shares must be determined by the Board of Directors and cannot be lower than the fair market value of the Ordinary Shares, which is to be determined by an appraiser, and the volume weighted average price of the Ordinary Shares over a period of six months preceding the date of the Board of Directors’ meeting. The resolution on the delisting will become effective if the amount of funds required to buy out all Ordinary Shares submitted for redemption does not exceed 10% of MegaFon’s net assets calculated under RAS (as of March 31, 2018, the net assets were equal to RUB 140 billion or approximately US$2.45 billion using exchange rate as of March 31, 2018).
      If any such delisting were to occur, holders of Ordinary Shares would not be entitled to the benefit of the listing of the Ordinary Shares on the Moscow Exchange, the Ordinary Shares would no longer trade on the Moscow Exchange, and it is unlikely that a liquid trading market for the Ordinary Shares would develop. As a result, the price of Ordinary Shares would become more volatile and it would be more difficult to complete a buy or sell order for the Ordinary Shares.
    • The Tender Offer may lead one or more index providers to exclude MegaFon’s Securities from their index or cut its weight, which may materially affect the price and liquidity of the Securities.
      MegaFon’s Securities are currently included in a wide range of different emerging markets and Russia-dedicated indices (including the FTSE Russia IOB index). These indices are used as a benchmark for investments by a number of institutional investors, including those who use a passive investment approach, such as ETFs. While the criteria for including or excluding a particular security from an index, or for changing the weight given to it in the index, vary from one index provider to another, one of the key elements taken into account by many of the indices is the size of the security’s free float (the amount held by public shareholders). MegaFon believes that the Tender Offer is likely to cause MegaFon’s free float to fall below some of the thresholds which are used by the index providers as a minimum level for inclusion. As a result, it is likely that the Tender Offer will lead one or more of these index providers to exclude MegaFon’s GDRs and Ordinary Shares from the index or cut its weight given in the index after the completion of the Tender Offer. Any such action could cause investors who use these indices as a benchmark to sell MegaFon’s Securities they hold, which may have a material adverse effect on the price and liquidity of MegaFon’s GDRs and Ordinary Shares.
      If MegaFon’s GDRs were to be excluded from FTSE Russia IOB or any other indices, it could cause investors to sell their GDRs and, subsequently, it could have a significant adverse impact on the price and liquidity of MegaFon’s Securities.
    • Securities acquired by MICL will be held by MICL or another member of the MegaFon Group until cancellation. Under Russian law, MICL will retain all rights in the shares (including shares represented by GDRs).
      Following completion of the Tender Offer, MICL may hold Securities acquired in the Tender Offer or transfer them to another member of the MegaFon Group. While held by a member of the MegaFon Group, the Securities will not be considered outstanding for purposes of determining MegaFon’s earnings per share. However, unlike the laws of the United Kingdom and many other jurisdictions, under Russian law a direct or indirect subsidiary of the issuer retains all rights in the shares (including shares represented by GDRs), in particular rights to dividends and other distributions, as well as voting rights available to shareholders generally. Therefore, MICL, as well as any other subsidiary of MegaFon holding such Securities, will be entitled to receive any accrued or future dividend payments with respect to the Securities, or any other distribution paid on the Securities, and to vote the Securities until such Securities are cancelled. Any cancellation of Securities acquired in this Tender Offer, if contemplated, is subject to a number of corporate approvals and accounting requirements and may take several years to complete. In particular, depending on the structure of the cancellation, a cancellation is likely to require the transfer of the Securities from MICL to a Russian subsidiary of MegaFon with a subsequent merger of such subsidiary into MegaFon.
    • The proportionate interest of MegaFon’s Major Shareholders in MegaFon may increase following the Tender Offer.
      Since the Company’s Major Shareholders will not be participating in the Tender Offer, the Major Shareholders’ respective proportionate equity interest as a percentage of MegaFon’s outstanding share capital may increase following a cancellation of the Securities acquired in the Tender Offer if such cancellation is effected.
    • The Tender Offer may lead one or more credit rating agencies to review and downgrade MegaFon’s credit rating for a period following the completion of the Tender Offer and to a breach of MegaFon’s financial covenants.
      MegaFon has credit ratings of BBB- (with stable outlook) from Standard & Poor’s, Ba1 (with positive outlook) from Moody’s and AA(RU) (with stable outlook) from ACRA. While the determination of a credit rating is based on many factors, MegaFon believes that the Tender Offer may cause MegaFon to fall below some of the financial assumptions made by one or more of the credit rating agencies in determining its ratings. As a result, it is possible that the Tender Offer will lead one or more of such credit rating agencies to review and downgrade MegaFon’s credit rating for a period following the completion of the Tender Offer. Any such downgrade could have a material adverse effect on the Company’s financial position: in particular it could lead to an increase in interest expense for the Company, and impact the Company’s ability to raise financing on favourable terms. Furthermore, although MegaFon believes, based on its current estimates, that the Tender Offer is not likely to cause it to breach any financial covenants in any of its debt instruments, MegaFon’s compliance with such financial covenants depends on several factors, including its financial performance, and there can be no assurance that MegaFon will not breach any such financial covenants in the future. A breach of the financial or other covenants contained in one or more debt instruments may lead to a default under those debt instruments, which could have a material adverse effect on its business, financial condition, results of operations or prospects or the future trading price of its GDRs and Ordinary Shares.
    • In deciding whether or not to tender their Securities in the Tender Offer, Securityholders are urged to consider the above information, together with the other information contained in Tender Offer Memorandum.
  • 2.2 Will the GDRs be delisted from LSE?
    • As discussed in Section “Purpose of the Tender Offer”of the Tender Offer Memorandum, at its meeting on July 15, 2018, the Board of Directors determined that maintaining public company status is not a strategic priority for the Company and resolved to proceed with cancelling the GDR listing on the LSE following the Tender Offer. It is not expected that the delisting of the GDRs from the LSE will be accompanied by further repurchases of GDRs. Under the UK Listing Rules, the listing may be cancelled by giving at least 20 business days’ notice of the intended cancellation through an announcement of a Regulated Information Service, but does not require approval of GDR holders or any purchase of the outstanding GDRs. Following cancellation of the listing of the GDRs on the LSE, the GDRs will no longer trade on the LSE and it is unlikely that a liquid trading market for the GDRs would develop. As a result, the price of GDRs would become more volatile and it would be more difficult to complete a buy or sell order for the GDRs.
    • Furthermore, following the delisting from the LSE, MegaFon will no longer be subject to the disclosure and other obligations under the UK Listing, Disclosure and Transparency Rules and EU Market Abuse Regulation, and the level and type of disclosures provided to holders of Ordinary Shares following the cancellation of the GDR listing may be different from that provided to GDR holders.
  • 2.3 Will there be another repurchase in connection with delisting of GDRs?
    • It is not expected that the delisting of the GDRs from the LSE will be accompanied by further repurchases of GDRs.
  • 2.4 Will the GDR programme be terminated?
    • As discussed in Section “Purpose of the Tender Offer” of the Tender Offer Memorandum, at its meeting on July 15, 2018, the Board of Directors decided that cancelling the GDR listing on the LSE is in the interests of the Company and its Securityholders. Following the completion of the Tender Offer, the listing of the GDRs on the LSE will be cancelled.
    • MegaFon may review whether or not to maintain the GDR programme following the cancellation of the listing, taking into consideration, among other things, the number of GDRs outstanding following the Tender Offer. MegaFon may also consider the possible delisting of Ordinary Shares. Any termination of the programme may be effected upon giving a 90-day notice to The Bank of New York Mellon, as depositary for the GDR program, which will then notify the GDR holders. Upon receipt of notice of the termination, any GDR holder who wishes to receive Ordinary Shares in exchange for their GDRs will need to comply with the procedures under the Deposit Agreement (including payment of applicable fees) for receiving Ordinary Shares underlying the GDRs they hold. With respect to any GDR holders who do not elect to exchange their GDRs for Ordinary Shares, or are not permitted to hold Ordinary Shares, the GDR Depositary in consultation with MegaFon will sell the Ordinary Shares underlying the GDRs remaining outstanding after the termination date and distribute the net proceeds to the former GDR holders. No decision has yet been made whether or not to terminate the programme, and there can be no assurance that the GDR programme will be maintained following the Tender Offer.
  • 2.5 Will dividends continue to be paid in 2018 following completion of the Tender Offer?
    • The Company announced on March 15, 2018 an increase in its capital expenditure programme in order to achieve the benefits of its new strategy as soon as possible, with capital expenditures in 2018 anticipated to reach an estimated RUB 75-80 billion (compared to RUB 56 billion in 2017), and the Board of Directors has recommended to the shareholders that no dividends be declared or paid and the shareholders have at the annual shareholders’ meeting agreed not to distribute annual dividends for 2017.
  • 2.6 Will Ordinary Shares be delisted from the Moscow Exchange?
    • Following the Tender Offer, the Ordinary Shares are expected to remain listed on the Moscow Exchange. However, the Company expects that it will only qualify for a Level 3 listing due to the free float requirements of the Moscow Exchange, and the listing will be transferred to this category. This listing level downgrade may have a material adverse effect on the trading price and liquidity of the Ordinary Shares. The Company may decide in the future, as a result of the anticipated downgrade in its Moscow Exchange listing, potential levels of trading of the Company’s Ordinary Shares, their liquidity or for any other reason, that it is no longer in its interests to maintain a listing of the Ordinary Shares on the Moscow Exchange and to seek a delisting.
  • 2.7 Who will vote the GDRs before they are cancelled?
    • Under Russian law, any direct or indirect subsidiary of the issuer holding shares in the issuer retains all rights in the shares (including shares represented by GDRs), in particular rights to dividends and other distributions, as well as voting rights available to shareholders generally. Therefore, MICL, as well as any subsidiary of MegaFon holding such GDRs or Ordinary Shares, will be entitled to receive any accrued or future dividend payments with respect to the GDRs or Ordinary Shares, or any other distribution paid on the GDRs or Ordinary Shares, and to vote the GDRs or Ordinary Shares until such GDRs or Ordinary Shares are cancelled.

  • 3. Tender Procedures and Conditions of the Tender Offer

  • 3.1 Do all Securityholders whose Securities are accepted for purchase and purchased by MICL receive the same Purchase Price per Security, regardless of whether it is a Ordinary Share or a GDR?
    • All Ordinary Shares purchased by MICL pursuant to the Tender Offer will be purchased at a purchase price of US$9.75 for each Ordinary Share (payable in Russian rubles based on the CBR exchange rate effective on the date of the announcement of the results of the Tender Offer) and all GDRs purchased by MICL pursuant to the Tender Offer will be purchased at a purchase price of US$9.75 for each GDR, payable in cash. Payment for the Ordinary Shares accepted for purchase will be made by no later than the fifth Russian business day following receipt of the tendered Ordinary Shares by MICL pursuant to the applicable executed share purchase agreement. Tendering Securityholders will not be entitled to any payment of accrued or other interest with respect to the Purchase Price under any circumstances. Tendering Securityholders will not receive any other form of compensation in the event of a delay in the delivery of the Purchase Price.
    • MICL will make payment for the GDRs it purchases pursuant to the Tender Offer by depositing no later than two Business Days following the Expiration Time in U.S. dollars the aggregate Purchase Price to be paid for the GDRs validly tendered and accepted to purchase with the GDR Tender Agent, which will, as soon as practicable, transfer the Purchase Price, less any fees, expenses, taxes (if withholding is required by applicable law) or other charges payable by the tendering GDR holders (a) to DTC, in the cases of the GDR holders tendering GDRs via DTC or (b) to Euroclear or Clearstream, in the cases of the GDR holders tendering GDRs via Euroclear or Clearstream. The Purchase Price for GDRs, less any fees, expenses, taxes (if withholding is required by applicable law) or other charges, will be paid to tendering GDR holders through the procedures of the relevant Clearing System. Tendering GDR holders will not receive any accrued or other interest with respect to the Purchase Price for GDRs under any circumstance. Tendering GDR holders will not receive any other form of compensation in the event of a delay in the delivery of the Purchase Price for GDRs to the tendering GDR holders.
    • Neither MegaFon, MICL nor any member of the MegaFon consolidated group expects to purchase Securities, other than pursuant to the Tender Offer, during the period in which the Tender Offer is open for submission of tenders, except that MegaFon and such other companies may use Securities in connection with financing and refinancing transactions, purchase such Securities in connection with such transactions and sell and purchase Securities to and from other members of the MegaFon consolidated group. In addition, in accordance with Russian law and pursuant to Rule 14e-5, affiliates of MegaFon that are not members of the MegaFon consolidated group and over which MegaFon does not exercise control and their respective nominees or brokers (acting as agents), and any advisor to MegaFon or any of its affiliates and any Dealer Manager in the Tender Offer or any of its affiliates, and any person acting, directly or indirectly, in concert with any such persons, may from time to time make purchases of, or arrangements to purchase, Securities other than pursuant to the Tender Offer, before or during the period in which the Tender Offer is open for submission of tenders, so long as those acquisitions or arrangements comply with applicable Russian law and the provisions of the exemption provided under Rule 14e-5. Any of the purchases referred to in this paragraph may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Information about such purchases will be disclosed as and if required by applicable securities laws.
    • None of MegaFon, MICL, their respective boards of directors or management, the GDR Tender Agent, the GDR Depositary, the Dealer Managers, IRC, NRC Stock Market or the professional advisors of each, is making any recommendation to the Securityholders of MegaFon, including any employee of MegaFon, as to whether or not to tender Securities in the Tender Offer.
  • 3.2 How many Securities will be purchased pursuant to the Tender Offer?
    • The Tender Offer is for all issued and outstanding Securities, other than Securities held by MICL and the Major Shareholders. Therefore, in the aggregate, not more than 128,950,036 Ordinary Shares, in any combination of Ordinary Shares and GDRs, or up to 20.8% of all issued and outstanding Ordinary Shares (including mOrdinary Shares represented by GDRs), will be purchased pursuant to the Tender Offer. See Section “Purpose of the Tender Offer” of the Tender Offer Memorandum.
    • MICL does not expect to acquire such number of Ordinary Shares as a result of the Tender Offer, which, together with the number of Ordinary Shares held by it and its affiliates, will result in the requirement to launch a mandatory tender offer for Ordinary Shares under Russian law following the Tender Offer.
  • 3.3 I have validly tendered my Securities and they have been accepted for purchase and purchased by MICL. When do I receive payment and in what currency?
    • Payment for validly tendered and accepted for purchase Ordinary Shares will be made in accordance with applicable executed share purchase agreement by no later than on the fifth (5th) Russian business day following transfer of the tendered Ordinary Shares to MICL. No Securityholder will be entitled to any payment of accrued or other interest with respect to the Purchase Price under any circumstances. Securityholders will not receive any other form of compensation in the event of a delay in the delivery of the Purchase Price to the tendering Securityholders. See Section “Payment for Securities” of the Tender Offer Memorandum.
    • MICL will make payment for the GDRs it purchases pursuant to the Tender Offer by depositing no later than two Business Days following the Expiration Time in U.S. dollars the aggregate Purchase Price to be paid for the GDRs validly tendered and accepted to purchase with the GDR Tender Agent, which will, as soon as practicable, transfer the Purchase Price, less any fees, expenses, taxes (if withholding is required by applicable law) or other charges payable by the tendering GDR holders (a) to DTC, in the cases of the GDR holders tendering GDRs via DTC or (b) to Euroclear or Clearstream, in the cases of the GDR holders tendering GDRs via Euroclear or Clearstream. The Purchase Price for GDRs, less any fees, expenses, taxes (if withholding is required by applicable law) or other charges, will be paid to tendering GDR holders through the procedures of the relevant Clearing System. Tendering GDR holders will not receive any accrued or other interest with respect to the Purchase Price for GDRs under any circumstance. Tendering GDR holders will not receive any other form of compensation in the event of a delay in the delivery of the Purchase Price for GDRs to the tendering GDR holders.
    • Payment for GDRs will be made in U.S. dollars, and payment for Ordinary Shares will be made in Russian rubles at the CBR exchange rate in effect on the date of the announcement of the results of the Tender Offer. See Section “Payment for Securities” of the Tender Offer Memorandum.
  • 3.4 Are there reasons why my tendered Securities would not be accepted by MICL?
    • Yes. If any of the conditions described under Section “Certain Conditions of the Tender Offer” are not satisfied, including if the financing from MegaFon to MICL to fund the Purchase Price for the Securities tendered is not approved by the shareholders of MegaFon on or about August 17, 2018, or if Securities are defectively tendered, MICL is not required to complete the purchase of tendered Securities. MICL reserves the right to reject any and all tenders determined by it not to be in appropriate form or that do not otherwise comply with the terms and conditions of the Tender Offer. MICL may reject tenders of Ordinary Shares if, for instance, relevant Ordinary Shares Letter of Transmittal does not include original signature(s). See Section “Procedures for Tendering Securities — Proper Tender and Delivery” and Section “Procedures for Tendering Securities — Determinations of Validity” of the Tender Offer Memorandum.
    • MICL will not knowingly be accepting tenders from, or on behalf of, or purchase or pay for Securities tendered by, or on behalf of, any person who is a Sanctioned Person, if such acceptance, purchase or payment would violate any law or regulation, including any Sanctions, applicable to MICL, MegaFon, the Dealer Managers or any of their respective affiliates, or any contractual obligations of MegaFon or its group companies in relation to compliance with Sanctions.
    • MICL reserves the right, at any time prior to the Expiration Time, to amend or extend the Tender Offer in its sole discretion in any respect, or terminate it subject to the provisions of Section10 if any of the conditions in Section 4 of the Tender Offer Memorandum are not satisfied, including if the financing from MegaFon to MICL to fund the Purchase Price for the GDRs tendered is not approved by the shareholders of MegaFon on or about August 17, 2018, or for any other reason.
  • 3.5 May I tender pledged or otherwise encumbered Securities into the Tender Offer?
    • No. Securityholders may not tender Securities that are blocked, encumbered, pledged or subject to attachment or have other restrictions of any kind.
    • In respect of Ordinary Shares, IRC may disregard any Ordinary Shares Letter of Transmittal if the purchase and transfer of the Ordinary Shares to which it relates cannot be performed on any grounds, including due to the Ordinary Shares specified in the Ordinary Shares Letter of Transmittal being blocked, encumbered, pledged or subject to attachment or having other restrictions on the rights and ability of the shareholder to transfer the Ordinary Shares to MICL and for MICL to receive the Ordinary Shares free and clear of any liens, restrictions, charges and encumbrances and not subject to any adverse claim or right, and together with all rights attached thereto.
    • In respect of GDRs, each Securityholder by tendering its GDRs through the submission of an electronic acceptance instruction in accordance with the requirements of relevant Clearing System, will be deemed to represent and warrant that it has full power and authority to tender, sell, assign and transfer the GDRs (including the underlying Ordinary Shares) tendered hereby and all distributions relating thereto and that when such tendered GDRs are accepted for purchase and payment by MICL, MICL will acquire good, marketable and unencumbered title thereto and to all distributions, free and clear of any liens, charges, claims, interests, rights of third parties, encumbrances and restrictions of any kind and not subject to any adverse claim or right, and together with all rights attached thereto.
  • 3.6 When will the Tender Offer commence and what is the deadline for tendering my Securities? May the Tender Offer be extended?
    • The Tender Offer will commence on July 16, 2018 and will expire at 5:00 P.M., Luxembourg/Brussels time (6:00 P.M., Moscow time, 4:00 P.M., London time, 11:00 A.M., New York time) on August 22, 2018, unless extended, provided that any tenders submitted by Securityholders must be received by either IRC (with respect to Ordinary Shares) or the relevant Clearing System (with respect to GDRs) within their normal business hours and in any event prior to the Expiration Time or, in the case of GDRs, prior to the cut-off dates and times established by the relevant Clearing System, its respective participants and the brokers or other securities intermediaries through which GDR holders hold their GDRs. MICL may elect to extend the Expiration Time of the Tender Offer. If the Expiration Time of the Tender Offer is extended, MICL will issue a press release announcing the extension and publish it on the website www.micltenderoffer.com no later than 9:00 A.M. New York time, on the next Business Day after the original Expiration Time. See Section “Amendments; Extension of Tender Period; Termination” of the Tender Offer Memorandum. Please note that DTC, the custodians for Euroclear and Clearstream, their respective participants and the brokers or other securities intermediaries through which GDR holders hold their GDRs, will establish their own cut-off dates and times, which will be earlier than the Expiration Time.
  • 3.7 How do I tender my Ordinary Shares or GDRs, or both?
    • The procedures for tendering Securities will vary depending on whether you are tendering Ordinary Shares or GDRs.
    • I wish to tender Ordinary Shares and my Ordinary Shares are registered in my personal account in the MegaFon shareholders’ register held by IRC. In order to validly tender your Ordinary Shares pursuant to the Tender Offer, you must follow the procedures set forth in Section “Procedures for Tendering Securities”, and in the Ordinary Shares Letter of Transmittal that accompanies the Tender Offer Memorandum. If you are a Securityholder whose Ordinary Shares are registered with your personal account in the MegaFon shareholders’ register held by IRC, you must, prior to the Expiration Time, properly complete, sign and deliver the Ordinary Shares Letter of Transmittal and any other documents required by the Ordinary Shares Letter of Transmittal to IRC at the addresses specified in this Tender Offer Memorandum and the Ordinary Shares Letter of Transmittal, or have your duly authorized representative complete these actions on your behalf and appear at IRC at the addresses specified in this Tender Offer Memorandum and the Ordinary Shares Letter of Transmittal (or have your duly authorized representative appear at IRC). MICL will be deemed to have accepted for purchase validly tendered Ordinary Shares and a binding contract between MICL and each holder of validly tendered Ordinary Shares on the terms and conditions set out in this Tender Offer Memorandum and the Ordinary Shares Letter of Transmittal will be deemed to have been formed, and MICL will proceed with signing of share purchase agreements with respect to tendered Ordinary Shares, when, as and if MICL (i) gives oral or written notice to IRC of its acceptance of such Ordinary Shares for purchase pursuant to the Tender Offer and (ii) announces the results of the Tender Offer.
      After your Ordinary Shares have been validly tendered and accepted for purchase in accordance with this Tender Offer Memorandum, you must during the Execution Period appear at IRC at the addresses specified in this Tender Offer Memorandum (or have your duly authorized representative appear at IRC) and sign a share purchase agreement and a transfer order to transfer the tendered Ordinary Shares to MICL. Russian licensed securities trustees wishing to tender Ordinary Shares pursuant to the Tender Offer should follow same procedures as holders of Ordinary Shares holding their Ordinary Shares on a personal account in the MegaFon shareholders’ register held by IRC or a depo account with a nominee holder (depositary). If you wish to tender Ordinary Shares and your Ordinary Shares are registered with an account of a non-licensed Russian securities trustee, certain restrictions on the transfer of such Ordinary Shares may apply and you need to consult your non-licensed securities trustee with respect to procedures for the transfer of your Ordinary Shares. See Section “Procedures for Tendering Securities — Proper Tender and Delivery” of the Tender Offer Memorandum. MICL will not be required to purchase any Ordinary Shares if the procedures set out above have not been complied with.
    • I wish to tender Ordinary Shares and my Ordinary Shares are registered with an account of a nominee holder. In order to validly tender your Ordinary Shares pursuant to the Tender Offer, you must follow the procedures set forth in Section “Procedures for Tendering Securities”, and in the Ordinary Shares Letter of Transmittal that accompanies the Tender Offer Memorandum. If you are a Securityholder whose Ordinary Shares are registered with your depo account with a Russian licensed depository (nominee holder), you must properly authorize and instruct your nominee holder or any other representative to properly complete, sign and deliver the Ordinary Shares Letter of Transmittal and any other documents required by the Ordinary Shares Letter of Transmittal to IRC at the addresses specified in this Tender Offer Memorandum and the Ordinary Shares Letter of Transmittal prior to the Expiration Time. MICL will be deemed to have accepted for purchase validly tendered Ordinary Shares and a binding contract between MICL and each holder of validly tendered Ordinary Shares on the terms and conditions set out in this Tender Offer Memorandum and the Ordinary Shares Letter of Transmittal will be deemed to have been formed, and MICL will proceed with signing of share purchase agreements with respect to tendered Ordinary Shares, when, as and if MICL (i) gives oral or written notice to IRC of its acceptance of such Ordinary Shares for purchase pursuant to the Tender Offer and (ii) announces the results of the Tender Offer.
      After your Ordinary Shares have been validly tendered and accepted for purchase in accordance with this Tender Offer Memorandum, you must, during the Execution Period, have your duly authorized nominee holder or other authorized representative appear at IRC at the address specified in this Tender Offer Memorandum and the Ordinary Shares Letter of Transmittal to sign on your behalf a share purchase agreement and a transfer order, if applicable, and effect all actions required to transfer the Ordinary Shares tendered to MICL. Alternatively, you may do all actions specified above yourself without authorizing your nominee holder (whether Russian or foreign) or another representative. Alternatively, you may effect the actions specified above yourself, provided that you submit to IRC the relevant documents specified in the Ordinary Shares Letter of Transmittal attached hereto. You will not be obligated to pay a brokerage commission in connection with your tender of Ordinary Shares pursuant to the Tender Offer, but you may be charged a fee by a brokerage firm or similar nominee for processing the tender(s) on your behalf and effecting transfer of Ordinary Shares pursuant to your instructions. See Section “Procedures for Tendering Securities — Proper Tender and Delivery” of the Tender Offer Memorandum. MICL will not be required to purchase any Ordinary Shares if the procedures set out above have not been complied with.
    • I wish to tender GDRs. In order to validly tender your GDRs pursuant to the Tender Offer, you must follow the procedures set forth in Section “Procedures for Tendering Securities” of the Tender Offer Memorandum. If you wish to tender GDRs, you must: (a) instruct the relevant Clearing System of your intention to participate in the Tender Offer, in accordance with the relevant procedures of, and deadlines for tender set by, such Clearing System, (b) in the case of Regulation S GDRs, instruct Euroclear or Clearstream to block, with immediate effect, any transfers from the relevant Clearing System participant account of such GDR holder of the number of GDRs which the GDR holder intends to tender for participation in the Tender Offer, and © follow the instructions of, and procedures established by, the relevant Clearing System for the tender and blocking of GDRs, including the process established by the relevant Clearing System to certify electronically as to status as a holder meeting the conditions of the Tender Offer.
      A GDR holder (or direct participant of DTC on behalf of such holder) holding Rule 144A GDRs must tender through the voluntary offering procedures operated by DTC. A GDR holder (or direct participant of Euroclear or Clearstream, as the case may be, holding on behalf of such holder) holding Regulation S GDRs must tender through either Euroclear or Clearstream, as the case may be.
      If you wish to tender GDRs held through a broker or other securities intermediary, you must contact that firm to effect a tender on your behalf (and any such firm may have established an earlier deadline for tendering Securityholders to act to instruct it to accept the Tender Offer). You will not be obligated to pay a brokerage commission in connection with your tender of GDRs pursuant to the Tender Offer, but you may be charged a fee by a brokerage firm or similar securities intermediary for processing the tender(s) on your behalf. See Section “Procedures for Tendering Securities — Proper Tender and Delivery” of the Tender Offer Memorandum.
    • I hold both Ordinary Shares and GDRs and wish to tender both. For each type of Security you wish to tender pursuant to the Tender Offer, please follow the relevant procedures outlined for such Security above and in Section 5 of the Tender Offer Memorandum.
  • 3.8 Can I tender my Securities by guaranteed delivery?
    • No, Securities may not be tendered pursuant to the Tender Offer by guaranteed delivery.
  • 3.9 Will Securities not purchased by MICL pursuant to the Tender Offer be returned to me?
    • Tendered Ordinary Shares that are not purchased under the Tender Offer will remain in the ownership of the holder thereof and remain registered on the relevant Securityholder’s personal account with IRC or depo account with the depositary, as applicable.
    • Tendered GDRs that are not purchased under the Tender Offer will be unblocked by the relevant Clearing System on the account of the tendering GDR holder.
    • See Section “Procedures for Tendering Securities — Return of Securities Tendered by Securityholders, but Not Purchased by MICL” of the Tender Offer Memorandum.
  • 3.10 Are there any limitations on the number of Ordinary Shares or GDRs that may be tendered by a Securityholder into the Tender Offer and does the Tender Offer differentiate between Ordinary Shares and GDRs?
    • No. Securityholders may tender any number of Ordinary Shares or GDRs owned by them and there are no limitations on the maximum number of Securities that may be tendered.
  • 3.11 Must I tender all of my Securities? If I am a holder of both Ordinary Shares and GDRs, may I tender both?
    • No, you do not need to tender all of your Securities, but you must tender any Securities that you wish MICL to potentially purchase pursuant to the Tender Offer. If you are a holder of both Ordinary Shares and GDRs, you may (but are not obligated to) tender any portion or all of your Ordinary Shares and GDRs, or a combination of Ordinary Shares and GDRs, in the case of Ordinary Shares, by properly completing and submitting the Ordinary Shares Letter of Transmittal prior to the Expiration Time or, in the case of GDRs, by the cut-off dates and times established by the relevant Clearing System, its respective participants and the brokers or other securities intermediaries through which you hold your GDRs and any other documentation required in connection with the tender prior to the applicable deadline. Alternatively, you may choose to tender none of your Securities (in which case no action on your part is required), or tender either Ordinary Shares or GDRs you hold.
  • 3.12 May I withdraw my tender?
    • No, you will not be able to withdraw your validly submitted tender of Securities. A GDR holder who has tendered GDRs in the Tender Offer will have its tendered GDRs blocked by DTC, Euroclear or Clearstream and therefore will not be able to transfer, dispose of, or otherwise deal in, the GDRs that have been tendered. A holder of Ordinary Shares who has completed and submitted to IRC a Ordinary Shares Letter of Transmittal (in person or by a duly authorized representative, nominee holder or trustee, as the case may be) will be deemed to have entered into a binding, irrevocable agreement to tender the Ordinary Shares covered by the Ordinary Shares Letter of Transmittal and to complete all steps required for settlement, after the Tender Offer results are announced.
  • 3.13 How will my choosing to participate in the Tender Offer affect my rights with respect to the Securities I tender?
    • If you validly tender your Securities pursuant to the Tender Offer and to the extent that those Securities are accepted for purchase and purchased by MICL, you will receive the Purchase Price for such Securities in exchange for giving up your interest in such Securities. In other words, you will give up in exchange for such payment all rights associated with owning such Securities, including any accrued or future dividend payments, if any, and voting rights with respect to such Securities. You will not be able to vote at any annual or extraordinary meetings of the shareholders. See Section “Payment for Securities” of the Tender Offer Memorandum.
    • By giving instructions to the relevant Clearing System, the Securityholder will irrevocably appoint each designee of MICL or one or more of its affiliates as the attorneys-in-fact and proxies of the Securityholder, each with full power of substitution, (i) to give voting instructions with respect to any annual or extraordinary meeting of MegaFon’s shareholders or any adjournment of postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or his or her substitute shall, in his or her sole discretion, deem proper with respect to, (ii) to execute any written consent concerning any matter as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, and (iii) to otherwise act as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, all of the GDRs (including the underlying Ordinary Shares and any and all distributions) tendered hereby and accepted for purchase and payment by MICL. This appointment will be effective if and when, and only to the extent that, MICL becomes obligated to pay for the tendered GDRs pursuant to the Tender Offer following the satisfaction, or the waiver by MICL, of all conditions to the Tender Offer. See Section “Procedures for Tendering Securities — Proper Tender and Delivery” of the Tender Offer Memorandum.
  • 3.14 Once the results of the Tender Offer are announced, is MICL required to complete the Tender Offer?
    • Yes, once the results of the Tender Offer are announced, MICL is required to complete the Tender Offer, unless any of the conditions described under Section “Certain Conditions of the Tender Offer” of the Tender Offer Memorandum are not satisfied, including if the financing from MegaFon to MICL to fund the Purchase Price for the Securities tendered is not approved by the shareholders of MegaFon on or about August 17, 2018, or MICL has not accepted for purchase tendered Securities. MICL also has the right to extend or amend the Tender Offer in its sole discretion or terminate it for any reason or if any of the conditions set forth in Section 4 are not satisfied, including if the financing from MegaFon to MICL to fund the Purchase Price for the Securities tendered is not approved by the shareholders of MegaFon on or about August 17, 2018, at any time prior to the Expiration Time. See Section “Amendments; Extension of Tender Period; Termination” of the Tender Offer Memorandum.
  • 3.15 Is my sale in the Tender Offer a taxable transaction?
    • Securityholders should be aware that the sale of Securities and receipt of the Purchase Price pursuant to the Tender Offer may have certain tax consequences, and are urged to consult at their own expense with their tax advisors with respect to those consequences in considering the Tender Offer. Securityholders are liable for their own taxes and have no recourse to MICL, any Dealer Managers, GDR Tender Agent, with respect to taxes arising in connection with the Tender Offer. For certain U.S. federal income tax consequences, please see Section “Certain U.S. Federal Income Tax Consequences” of the Tender Offer Memorandum.
  • 3.16 Will I have to pay any fees?
    • You will not be obligated to pay a brokerage commission in connection with your tender of GDRs, but you may be charged a fee by a brokerage firm or similar securities intermediary for processing the tender(s) on your behalf. See Section “Procedures for Tendering Securities — Proper Tender and Delivery” of the Tender Offer Memorandum. You are urged to check with the relevant brokerage firm or similar securities intermediary and, if appropriate, consult with your advisors.
  • 3.17 What actions need I take if I decide not to tender any of my Securities pursuant to the Tender Offer?
    • None.
  • 3.18 What happens if I sell my Securities after receiving this Tender Offer Memorandum?
    • You may trade your Securities in the normal way during the Tender Offer period so long as you have not tendered those Securities in accordance with the terms of this Tender Offer Memorandum. If you sell or have sold or otherwise transferred all of your Securities, please forward this Tender Offer Memorandum at once to the purchaser or transferee or the agent through whom the sale or transfer was effected, for onward delivery to the purchaser or transferee (but not if such purchaser, transferee or agent is resident in a jurisdiction where the Tender Offer would be unlawful). If you have sold part of your holding of Securities, please retain these documents and contact the bank, stockbroker or other agent through whom the sale or transfer was effected as to the actions you should take.
  • 3.19 What regulatory approvals are required for the Tender Offer?
    • The Tender Offer has not been and will not be registered under the securities laws of the United States or the Russian Federation or in any other jurisdiction. Neither the SEC nor any other authority or securities exchange in the United States has approved or disapproved of the Tender Offer, passed upon the merits of the Tender Offer or determined whether the Tender Offer is accurate or complete. Participating Securityholders are urged to consult their own legal and tax advisors regarding possible legal requirements as well as possible tax consequences of participating in the Tender Offer in their particular circumstances. Neither this Tender Offer Memorandum nor the Tender Offer nor any information contained herein constitute or may be construed as constituting an offer (“oferta”) pursuant to Russian law, or an advertisement, or an offer of securities to an unlimited number of persons within the territory of or outside the Russian Federation, or a voluntary tender offer or a mandatory tender offer under Russian law.
    • As required by the Russian Securities Market Law, MICL will notify MegaFon and the CBR of any acquisition of Securities pursuant to the Tender Offer as well as of any acquisition of Securities that entitle MICL to determine more than 5%, 10%, 15% or 20% of the total voting rights attaching to Ordinary Shares.
    • If as a result of the Tender Offer, MICL and its affiliates will acquire rights to vote more than 75% of Ordinary Shares, including Ordinary Shares represented by GDRs, such acquisition will require a preliminary consent of FAS. Following commencement of the Tender Offer, MICL intends to file an application with the FAS seeking its preliminary consent to an increase in the percentage of Ordinary Shares, including Ordinary Shares represented by GDRs, held by MICL and its affiliates to more than 75% of the outstanding Ordinary Shares. It is currently anticipated that, if granted, such consent would be issued prior to the Expiration Time, unless the review of MICL’s application is extended or denied by the FAS. Under recent amendments to Russia’s foreign investments law, the Chairman of the Governmental Commission has the discretion to require that any transaction by a foreign investor in relation to a Russian company be submitted for the review of, and clearance by, the Governmental Commission in accordance with applicable law. MICL does not expect that the acquisition of Ordinary Shares and GDRs by it would result in any such requirement.
    • MICL is not aware of any approval or action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required to effect the Tender Offer other than those disclosed in this Tender Offer Memorandum. Should any such approval or other action be required, MICL presently cannot determine whether such approval or other action will be sought. MICL is unable to predict whether it may determine that it is required to delay the acceptance for purchase or payment for, Securities tendered pursuant to the Tender Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to MICL’s or MegaFon’s respective businesses. MICL expressly reserves the right at any time to terminate the Tender Offer prior to the Expiration Time and not accept for purchase, or pay for, any Securities for any reason or if any of the conditions referred to in Section 4 has not been satisfied or upon the occurrence and during the continuance of any of the events specified in Section 4 of the Tender Offer Memorandum.
  • 3.20 What are the conditions to the Tender Offer?
    • In addition to (and not in limitation of) MICL’s right to extend, amend or terminate the Tender Offer at any time prior to the Expiration Time, the Tender Offer is also subject to several other conditions, which MICL may waive in whole or in part at any time and from time to time in its sole discretion. In particular, MICL will not be required to accept for purchase or pay for, and may delay the acceptance for purchase or the payment for, any tendered Ordinary Shares or GDRs, if:
      • any action or proceeding has been instituted or threatened that would, in MICL’s sole discretion, impair the contemplated purpose of the Tender Offer;
      • MICL has not obtained all consents, approvals, including, if required, consent of the FAS, waivers or amendments from third parties necessary to permit the consummation of the Tender Offer;
      • MegaFon has not obtained, or has elected not to seek, shareholders’ approval of the financing to MICL in the amount of up to RUB 117 billion to fund the Purchase Price for the Securities tendered in the Tender Offer on or about August 17, 2018;
      • acceptance for purchase or payment for any Ordinary Shares or GDRs pursuant to the Tender Offer would violate any law or regulation applicable to MICL or MegaFon, including any applicable Sanctions (as defined above), or any contractual obligations of MegaFon or its group companies in relation to compliance with Sanctions;
      • there has occurred or will be likely to occur any event affecting the business, financial affairs, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of MICL or MegaFon, or their respective subsidiaries or affiliates, that, in MICL’s sole discretion, would or might prohibit, prevent, restrict or delay consummation of the Tender Offer, or that will, or is reasonably likely to, materially impair the contemplated benefits of the Tender Offer to MICL, MegaFon or MegaFon securityholders as a group, or otherwise result in the consummation of the Tender Offer not being or reasonably likely not being in the best interests of MICL, MegaFon or MegaFon securityholders as a group; or
      • there has been, among other things, (a) any general suspension of, shortening of hours for, or limitation on prices for trading in securities on any securities exchange on which any securities of MegaFon, including the Ordinary Shares and GDRs, trade, (b) any significant adverse change in the price of the Ordinary Shares or GDRs or in the Russian, any European or United States securities or financial markets, © a declaration of a banking moratorium or any suspension of payments in respect of banks by the Russian Federation, United Kingdom, European Union or federal or state authorities in the United States (whether or not mandatory), (d) a commencement of a war, armed hostilities, terrorist action or other national or international crisis or national calamity, (e) any limitation (whether or not mandatory) by any governmental authority on, or other event having a reasonable likelihood of affecting, the extension of credit by banks or other lending institutions in the Russian Federation, United Kingdom, European Union or United States, (f) any significant change in Russian, UK or U.S. currency exchange rates or a suspension of, or limitation on, the markets thereof (whether or not mandatory) or (g) in the case of any of the foregoing existing at the time of the commencement of the Tender Offer, a material acceleration or worsening thereof.
    See Section “Certain Conditions of the Tender Offer” and Section, “Amendments; Extension of Tender Period; Termination” of the Tender Offer Memorandum

  • 4. Additional Information

  • 4.1 How do I obtain more information?
    • Questions about the tendering procedures for the GDRs should be directed to The Bank of New York Mellon as GDR Tender Agent at the following e-mail address: drprojectolto@bnymellon.com.
    • Questions and requests for assistance in connection with the tendering procedures for the Ordinary Shares should be directed to IRC during business hours at its address and telephone number set forth on the back page of this Tender Offer Memorandum.
    • Copies of this Tender Offer Memorandum and accompanying documents and other related materials will be made available at a dedicated website at: www.micltenderoffer.com.