Translated material
YUKOS "cut" ADR
By changing the ratio of receipts to ordinary shares
The Yukos oil company has decided to increase the liquidity of its ADRs (American Depositary Receipts). By decision of the board of directors, the conversion rate of Yukos shares into ADR will change next Friday. Now one depositary receipt will be equal to four ordinary shares, and not 15, as it was before. In total, the number of ADRs will increase by 2.75 times. They will cost approximately the same as when they were placed in 2001.Currently, approximately 13.6% of Yukos shares are traded on international exchanges in the form of ADR. The company's papers can be purchased in the USA, London, Berlin, Frankfurt, Munich and Stuttgart.
Yukos issued ADRs for its shares in 2001, when they cost a little less than 50 euros per share. However, during this time the cost of receipts has increased significantly. Thus, at the beginning of this year, the quotation of YUKOS ADR on the Frankfurt Stock Exchange exceeded 130 euros, and yesterday the price was 182.82 euros (-3.96% compared to the previous day’s close).
As the company's financial director Bruce Misamore says, “since the start of the American Depositary Receipts program, the price of one ADR has more than quadrupled.” “The change in the conversion rate will make our ADRs available to a wider range of investors, and will also have a positive impact on trading conditions and market liquidity for all holders of our depositary receipts,” he said.
Starting from May 23, owners of YUKOS ADRs will receive an additional 2.75 ADRs of the company. Of course, the price of securities on international exchanges will also change. Based on the new coefficient, it should be around 50 euros.
In turn, Yukos press secretary Alexander Shadrin said: “This is a technical solution for shareholders who own ADR. However, their shares do not change.” According to him, there is no connection with the progress of the merger with Sibneft in the decision to change the conversion ratio, “this could have happened earlier.”
According to Brokercreditservice analyst Maxim Shein, “from time to time, every company must “cut its hair,” that is, change the conversion ratio in one direction or another - after all, there is a certain range of quotes that is considered the most psychologically attractive to investors.” However, according to Aton Investment Company analyst Timerbulat Karimov, “there are practically no small investors among the buyers of YUKOS ADR, so a change in the coefficient is unlikely to affect the dynamics of stock trading.”