Fundamental decision reached to hold Segezha SPO, details to appear in autumn - CEO

MOSCOW. Aug 28 (Interfax) - Segezha Group forestry holding company, the timber industry asset of AFK Sistema , has reached the decision to hold a SPO in order to improve its financial position, and the group plans to announce the placement details this autumn, Segezha CEO Alexander Kreschenko said during a conference call on Wednesday.

"The process is naturally very complicated, because there are many participants, and the model must be understandable and acceptable to everyone. Therefore, we could perhaps not announce any details at this time, except perhaps that the fundamental decision has been reached to hold an additional issue, and I expect to bring the details to the market, figuratively speaking, this autumn," Kreschenko said.

"I am certain that it will end this autumn," Kreschenko said when asked about the timeframe for the preparations for the SPO, suggesting waiting until mid-autumn.

Kreschenko has declined to comment on the possible amount or pool of potential investors.

Kreschenko also said that preparations for the SPO are underway with the participation of the controlling shareholder. Sistema founder Vladimir Yevtushenkov at this year's St. Petersburg International Economic Forum said during an interview with RBC that, "We will definitely not hold a SPO, because the market is not in the best condition". Yevtushenkov at the time said additional capitalization could occur using the group's funds or other financial instruments.

Mikhail Shamolin, who was president of Segezha at the time, told Interfax during an interview in March this year that the company could resolve its debt burden through additional capitalization. Shamolin resigned as company president this summer in order to become chairman of the board of directors.

Segezha Group is a vertically integrated international timber-industry holding that unites the logging and timber processing assets of AFK Sistema. In April 2021, Segezha Group held an IPO that generated 30 billion rubles. The company has 24.25% of its shares in free float; AFK Sistema owns 62.2%; the Bonum investment company owns around 13%; and the members of the board of directors and the executive board own a total share of 4.4%. The charter capital is divided into 15,690,000,000 ordinary shares at a par value of 0.1 rubles per share.