Information for the PJSC “LUKOIL” ADR holders
According to the Federal Law No. 114-FZ of April 16, 2022, (hereinafter, the “Law”) Russian issuers were obliged to take actions aimed at terminating depositary agreements, underpinning circulation of depositary receipts issued for shares of Russian issuers.
In accordance with the Law, the issuance of new depositary receipts is prohibited starting from April 27, 2022. Only those persons who were holders of depositary receipts as at April 27, 2022 are entitled to receive ordinary shares (hereinafter, the “Shares”) through conversion of their depositary receipts.
Until the receipts are converted into Shares, the holders of depositary receipts do not have voting rights and rights to receive dividends.
On May 5, 2022, PJSC “LUKOIL” notified the depositary bank Citibank N.A. (hereinafter, the “Citibank”) on its intention to terminate from December 30, 2022 depositary agreements under the Level 1 and Rule 144A American Depositary Receipt programs (hereinafter, the “ADR”) (https://www.lukoil.com/PressCenter/Pressreleases/Pressrelease?rid=584526).
In its turn, Citibank notified ADR holders about its intention to terminate ADR programs on its website (https://depositaryreceipts.citi.com/adr/common/file.aspx?idf=5975).
On July 14, 2022, Federal Law No. 319-FZ was published, which introduced amendments and additions to certain provisions of the Law in relation to the procedure of ADRs conversion into Shares. According to the additions, the conversion procedure depends on the clearing system where the ADRs are held. Therefore, before you start the conversion procedure, you should contact your broker to clarify this information.
ADRs held in Russian clearing system (on Russian depositary account)
If your ADRs are held in Russian depositary (including NSD), no action is required on your part - the conversion is performed automatically.
In accordance with the procedure established by the decision of the Board of Directors of the Bank of Russia as of July 22, 2022 (https://www.cbr.ru/about_br/dir/rsd_2022-07-22_28_01), ADRs will be debited from your account, and an equivalent number of Shares will be deposited to your custody account no later than three weeks since AO CITIBANK receives the notification from PJSC “LUKOIL” about the automatic conversion (August 17, 2022).
ADRs held in foreign clearing system
If your ADRs are kept in foreign depositories, there are two conversion options in this case:
1). conversion in standard mode with use of foreign clearing systems;
2). declarative conversion through Russian clearing system https://www.citibank.ru/russia/corporate/rus/pdf/drconversion/information.pdf.
Conversion in standard mode
We recommend to contact your broker/depository for information about the possibility to carry out the conversion procedure in standard mode for depositary receipts, the rights to which are recorded in foreign clearing systems (Euroclear, Clearstream and DTC).
For the purposes of converting ADRs into Shares in standard mode and receiving Shares to the holder's custody account, the ADR holder must have active banking and brokerage accounts opened in the Russian Federation.
Before opening a brokerage account with a Russian broker/depositary, an ADR holder is recommended to seek advice from his/her existing broker/depositary regarding the possibility of converting ADRs into Shares and the possibility of retaining Shares with the existing broker/depositary (in case if the broker/depositary operates on the Russian market).
Next, you need to perform the following steps:
Step 1. An ADR holder provides its broker/depositary, which keeps records of ADR, with a filled Certificate and Agreement of Person Receiving Shares of Russian issuers underlying Depositary Receipts (DRs) Pursuant to No Change in Beneficial Owner Requirement (hereinafter, the "Certificate"). The form of the Certificate to fill out is available on the Citibank website:
To initiate the conversion procedure, the Certificate (or information from it) must be submitted by the broker/depositary to:
The Certificate must contain the following information:
12-digit NSDR ID number (NSD CODE) of the broker/depositary
12-digit/17-digit broker/depositary account number
Name of the beneficial owner (individual or legal entity)
Along with the Certificate submission, give to your broker/depositary in the Russian Federation an instruction to receive Shares, indicating the following details of the local custodian (AO CITIBANK) the Shares will be delivered from:
AGENT: AO CITIBANK
SAFEKEEPING ACCT: 4000010518
AGENT BIC: CITIRUMX
AGENT PSET BIC: NADCRUMM
NSD CODE: MC0018600000
AGENT NSD ACCT: ML9512090662/DR00000CGMD000000
AGENT ACCOUNT ALIAS AT NSD: 10780619
Step 2. Pay the conversion fee
Citibank conversion fee is $0.05 per one ADR. More detailed information and the fee payment details are available on the Citibank website:
Questions related to the conversion can be directed by representatives of broker/depositary or clearing agent to Citibank using following contacts:
If an ADR holder's broker/depositary clears through clearing systems, all inquiries should be made directly to those agents.
Citibank only corresponds with the broker/depositary/clearing agent that applied for the conversion.
2. Declarative conversion through Russian clearing system
If conversion in the standard mode is not possible, you can use the declarative conversion procedure.
To do so, you must submit an application to AO CITIBANK for the conversion of ADRs into shares of PJSC “LUKOIL” no later than October 11, 2022.
Detailed information and application forms (solely in Russian) are available at AO CITIBANK website:
You may find English translation of this information conducted by LUKOIL here:
https://www.lukoil.com/FileSystem/9/594629.pdf. The English translation of the application forms is being conducted by LUKOIL and will be available shortly.
Please draw your attention that all the application forms and lists of required documents are provided at AO CITIBANK website solely in Russian language, and must be completed and submitted only in Russian as well.
In case you need any assistance with application and the list of documents please contact LUKOIL Investor Relations at firstname.lastname@example.org.
For legal entities, the documents are accepted at the office of AO CITIBANK: Moscow, 8-10 Gasheka Street, building 1, 6-th floor, Department of reception and issuance of documents.
For individuals, the documents are accepted with personal visit at one of the branches of AO CITIBANK (https://www.citibank.ru/russia/branches/rus/branches.htm).
By no later than October 25, 2022, and in the absence of reasons for rejection, AO CITIBANK will open the holder's custody account for the applicant and deposit the Shares in the amount equivalent to convertible ADRs.
Questions and Answers
Save for the automatic conversion (see above), the conversion is voluntary and is carried out on a declarative basis.
Automatic conversion is provided only to the holders of the ADRs recorded in Russian depositories. In other cases, the conversion is carried out in a declarative basis.
The conversion ratio of ADRs into Shares of PJSC LUKOIL is 1:1.
The ADRs will remain on your account until Shares are sold by the depositary bank and the funds received from the sale are distributed to you. Please note that due to restrictions introduced by the Central Bank of Russia, the depositary bank is currently prohibited, for an indefinite period of time, from undertaking a sale of the Shares. ADRs will not receive dividends and will not provide voting rights.
These ADRs cannot be converted into Shares.
In case of holding ADRs in Russian depositories (including NSD) and automatic conversion, no action is required from ADR holders. When converting in the standard mode, it is necessary to start the procedure before the date of termination of depositary agreements (December 30, 2022). It is recommended to start the conversion process as early as possible due to possible delays and restrictions from the clearing system.
In the event of a declarative conversion through Russian clearing system, you must apply to AO CITIBANK for the conversion of ADRs into shares of PJSC LUKOIL by no later than October 11, 2022.
It is possible according to the Law. If your ADRs are held in Russian depositary (including NSD), in accordance with the procedure and terms established by the decision of the Board of Directors of the Bank of Russia, the ADRs will be debited from your account and the equivalent number of Shares will be deposited to that account. No action on your part is required for this - the conversion is performed automatically. The entire conversion process may take up to three weeks since AO CITIBANK receives notification from PJSC “LUKOIL” about the automatic conversion (August 17, 2022).
How can a non-resident of the Russian Federation open a brokerage account and a banking account in Russia?
This information should be specified directly with the broker/depositary or banking organization in the Russian Federation. If necessary, you may also contact email@example.com or firstname.lastname@example.org on this issue.
In accordance with the Law, starting from April 27, 2022 the dividends on ADRs cannot be paid. However, after converting the ADRs into Shares, you will have the right to claim unpaid dividends in accordance with the procedure established by Russian law.
As a non-resident of the Russian Federation, will I be entitled for votes and dividends with the Shares received through the conversion?
The Shares received through the conversion have voting rights and receive dividends.
Can I convert my ADRs into Shares using a third party brokerage account already opened in the Russian Federation?
No, you cannot use third party accounts. Brokerage and banking accounts in Russian Federation must be opened for beneficial owner of ADRs.
Residents of the Russian Federation may sell Shares after conversion.
At the moment non-residents of the Russian Federation may sell Shares only to other non-residents on OTC market.
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