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BELUGA GROUP announces the completion of the buyback of part of its own shares in order to reduce share capital

13
may 2020

On May 12, 2020, the Board of Directors of BELUGA GROUP summed up the results of the buyback of part of its own shares in order to reduce the share capital. The acquisition of shares was approved by an extraordinary general meeting of shareholders on March 18, 2020.

The share capital of the company before redemption amounted to 19.4 million shares. In total, 3.6 million shares, or 19% of the current share capital, were presented to BELUGA GROUP for redemption. All of them were part of the quasi-treasury stake of BELUGA GROUP, which was decreased to 3.2 million shares, amounting to 20% of the new share capital. Thus, the share capital of the company was decreased to 15.8 million shares.

The Chair of the Board of Directors, Nikolay Belokopytov, commented on this corporate event as follows: “The main purpose behind the purchase by BELUGA GROUP of its own shares has been achieved: more than half of the quasi-treasury shares held by the group’s subsidiaries have been presented for redemption. As a result, the structure of the share capital has been significantly simplified and has become more transparent. We hope that this measure, which is essentially an indirect way of paying dividends, coupled with the amount of direct dividends recently recommended by the Board of Directors, will lead to an increase in the group's fundamental shareholder’s value. I'd like to emphasize that the share capital is being reduced only by means of the quasi-treasury package of shares, and thus there has been no outflow of funds from the balance of BELUGA GROUP. Thus, the percentage holding of all company shareholders will automatically increase by 1.23.

I also want to take this opportunity to say a few words about the current situation in the company. BELUGA GROUP's management is proactively responding to new challenges and is consistently implementing a strategy of diversification of its operating business. This is producing positive results: for example, just recently the company reported almost 20% growth in sales for the first quarter. The group strengthened its market leaderships in such categories as vodka, flavored spirits, and whiskey, and for the first time it became the absolute leader in the brandy category. Total shipments in April, the first "quarantine" month, support this trend: 11% growth compared to the results of April 2019 (+ 17% in January-April 2020 compared to the corresponding period of last year). The WineLab retail chain, which by the end of 2019 consisted of over 600 stores, having stabilized its growth this year, shows double-digit LFL growth* in terms of key operating indicators. Given this fact, we plan to continue the active development of the chain next year.

The situation in the country and in the world remains difficult. During this period, we are closely monitoring events, making the necessary tactical decisions, and striving to achieve the strategic goals of the company. This approach allows us to ensure the stability of the group’s business and to serve the interests of our shareholders.”

* - like for like growth; comparison is based only on a number of stores comparable to the previous period.

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