Gazprom stock collapses

The stock of the state-owned company Gazprom collapsed by more than 30% at the Moscow Stock Exchange because of the decision of the gas monopoly's board of directors not to pay dividends at the end of 2021. The decision was announced in a statement issued by the company.

At the opening, Gazprom stock was trading at 300 rubles, the refusal to pay dividends was reported around 10:46 Moscow time. After the publication of the release the stock went down and peaked at 207.69 rubles, falling by more than 30% from the day’s high.

«The meeting has not decided on the distribution of the company's profits or dividends for 2021,» the state-owned company said in a statement.

At the same time, Gazprom did not shy away from paying remuneration to the top management. «The decision was made to pay remuneration to members of Gazprom's Board of Directors and Audit Commission who do not hold government or civil service positions in the amounts recommended by the Board of Directors,» the statement reads. The statement does not disclose the amount of remuneration.

The refusal to pay dividends may have a negative impact on Russia's budget, since the state owns about 40% of the shares in the state monopoly; moreover, the decision runs counter to the government’s requirement for state-owned companies to use at least 50% of their net profits for paying dividends. The decision may be linked to a decrease in gas production in Russia, as well as a reduction in gas supplies to European markets.