(Reuters) – Metals giant Nornickel has become the first Russian company to be granted permission by a government commission to keep its listing abroad – for one year for now.
Nornickel, the world’s largest producer of palladium and refined nickel, and other large Russia-registered firms have sought government approval to keep their depositary receipts traded on foreign bourses.
The approval has been needed since President Vladimir Putin in April signed a bill requiring Russian companies to delist their depositary receipts abroad in a bid to reduce foreigners’ control over these firms.
Nornickel said on Thursday a government commission had approved its request to maintain the circulation of its American Depositary Receipts (ADRs) outside Russia until April 28, 2023.
The permission would give the metals producer time to assess available opportunities and steps to support its long-term investment attractiveness, it added.
“It is important that a precedent occurred for a Russian company to be allowed to continue trading depositary receipts (DR) abroad. In other words, it is likely that other companies will be able to retain the DR programme,” analysts at BCS said in a note.
Maintaining a foreign listing could indirectly mean that the company will continue to adhere to best corporate governance and disclosure practices. The decision is also positive for the company’s interaction with Western investors in the long term, BCS added.
Russian steel producers NLMK and MMK, gas producer Novatek, and firms like Sistema, Magnit and En+ have said that they have also applied for similar permission. The result of their applications is yet to be disclosed.
A request by Russian gas giant Gazprom was rejected and the company expects delisting of its depositary receipts on May 31.
(Reporting by Reuters; Editing by Mark Potter and Bernadette Baum)
