Eos Russia: EOS Russia - Update on recent developments
The Company's sole business activity is to manage this portfolio of shareholdings in four electricity distribution companies (`MRSKs') operating in various Russian regions. None of the MRSKs in which the Company owns shares has been subject to EU or US sanctions. The same is true of Rosseti, the Russian state-controlled company which owns majority shareholdings in the MRSKs.
The Company is unable to take any action regarding its investment portfolio. When MOEX reopens, this will remain the case as a result of an internal instruction issued by the Central Bank of Russia on 28 February. This instruction, described as a temporary measure in force until further notice, prohibits local intermediaries from executing any orders to carry out transactions in locally-traded Russian securities when those orders have been received from foreign investors resident in countries that have imposed sanctions on Russia.
The Company is also potentially affected by a second temporary instruction of the Central Bank of Russia issued on 28 February. This prohibits the transfer of Russian company dividend payments to foreign shareholders resident in countries that have imposed sanctions on Russia. The Company's operating income consists of dividends received from its portfolio of shares in MRSKs. Unless and until regulations change, the Company will not receive further dividend payments. However, the cash resources which the Company retains from past years' dividend payments are adequate to continue the Company's operations such that the Company's shareholders will have ample time to take decisions about the future of the Company in the light of developments linked to the military conflict in Ukraine.
The Board and Management of EOS Russia would like to take this opportunity of echoing the worldwide sympathy for the victims of this conflict and hopes for the restoration of peace.