Polymetal (POLY) Stock Delisting: Convert from LSE to AIX Exchange

[UPDATE: 2023/08/07 – Polymetal is no longer accepted for settlement by Euroclear. That means that, as of now, transfer of Polymetal shares is not possible. Freedom24 expects to resume the conversion in future, but the dates are unclear for now].

[WARNING: On the 15th of August of 2023, Hinderburg Research released a report about Freedom Finance, parent company of Freedom24. It includes a series of allegations, including “Brazen Sanctions Evasion, Hallmarks Of Fabricated Revenue and Risky Bets with Commingled Customer Funds”. One day later, Freedom Finance released a response. As such, we advise you to reconsider whether or not you should open an account with them]

Bottom Line

Current shareholders of Polymetal International PLC (POLY) quoted in the London Stock Exchange (LSE) should perform one of two actions:

1. Sell their holdings;
2. Open a brokerage account that operates on the AIX exchange, like Freedom24 (one of the brokers recommended by Polymetal but not opening accounts for UK residents now), and transfer their shares to the new account.

For those who hold AUCOY ADRs (American Depositary Receipts), it’s important to take action. BNY Mellon, the company that manages the ADRs, has told Polymetal International PLC that they’re ending the program. Therefore, if you own these ADRs, you need to do one of two things:

1. Sell your holdings;
2. “Request the transfer of their holding direct to such investors in certificated form which would allow such investors to become directly entered onto the Register as a Corporate Shareholder or an Individual Shareholder”.

For more information about the ADRs, please contact BNY Mellon directly at drrussiaInquiries@bnymellon.com.

What is going on with Polymetal International PLC?

On the 10th of May 2023, Polymetal International PLC published a circular where it intended to re-domicile from Jersey in the UK to the Astana International Financial Centre (AIFC) in Kazakhstan. In other words, delist from the London Stock Exchange (LSE) and make the Kazakhstan leading exchange – AIX (Astana Stock Exchange) –  the main listing.

Due to the Russian-Ukraine conflict, the Western world has imposed several sanctions on Russian persons, entities, and sectors. In return, the Russian Federation has adopted its own counter-sanction measures, including putting Jersey inside the “Unfriendly Countries List”. Since Polymetal was established there, it has been directly affected by these sanctions.

Given the high risk to the continued existence of the group in its current form, the Board has decided to move with a proposal of re-domiciliation of its operations to Kazakhstan, where there is no need to establish a new corporate structure, keeping the current status quo.

On the 30th of May 2023, the resolution was approved by the shareholders at the General Meeting:

Polymetal Shareholders Approval – Results of the General Meeting (source: here)

You can check the Re-domiciliation Q&As produced by the company.

How do I transfer my Ordinary Shares to AIX?

As stated by the company: “Ordinary shares are not “transferred” to an alternative exchange or the AIX. Shareholders simply need access to or open a trading/brokerage account which operates on such exchange and transfer their shareholding to such an account”.

There is a list of brokers on AIX website that give access to the AIX exchange. We have previously worked with Freedom24 on similar issues, like the Russian ADRs conversion to local stocks, and the process has been working well for the clients. The broker is available in the following countries (not opening accounts for UK residents now):

Austria, Belarus, Belgium, Bulgaria, Switzerland, Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, Greece, Croatia, Hungary, Ireland, Iceland, Italy, Liechtenstein, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Sweden, Slovenia, Slovakia, Thailand, United Arab Emirates.

Would I be able to receive dividends after the re-domiciliation?

Yes, all shareholders will continue to be entitled to receive dividends (or participate in corporate actions) in respect of the ordinary shares they hold, should these be declared.

The Polymetal’s ability to pay dividends remains unchanged as a result of the re-domiciliation. The declaration of any dividends is subject to the Board’s ongoing considerations in accordance with the company’s existing dividend policy.

When does the Board expect the split to happen?

After the shareholders’ approval of the Board’s proposal, the company still expects to continue shareholder consultations in Q4 2023, followed by a general meeting to approve any jurisdictional separation (should the Board recommend one) around Q1 2024, with the separation to occur in H2 2024. 

Bear in mind that the timetable is indicative and subject to change. No decision has been taken as yet by the company with respect to such potential modifications.

When will happen the delisting of POLY stock from the LSE?

The official date is set for July 17, 2023.

If the POLY stock is suspended from LSE, will a shareholder retain their shares?

Yes, the ownership is not affected by delisting.

In case the stock trading is suspended from LSE, where will the trade be held?

Centralised exchange trading of POLY stocks will continue on the Astana International Exchange (AIX), a major stock exchange of Kazakhstan.

Will a shareholder be able to trade POLY shares on AIX?

Yes, through transferring the shares to a broker who provides access to AIX.

I’m a European shareholder. Do I need to open a brokerage account in Kazakhstan to conduct trading operations with POLY stocks?

No, you don’t need to open a brokerage account in Kazakhstan to trade your POLY shares. Europeans can have direct access to the two leading exchanges in Kazakhstan, AIX and KASE, through their accounts at Freedom24. 

Does Freedom24 provide local currency exchange?

Yes, the broker provides clients with convenient currency conversion into local Kazakhstani tenge (KZT) and vice versa.

How do I transfer POLY securities to Freedom24?

First, you must register and complete the online verification to open your trading account. Then, send the request with the number of POLY stocks you plan to transfer to the Freedom24 helpdesk and follow their instructions to complete the transfer. 

Until the 30th of May, 2023, there will be no final decision. Nonetheless, you should be prepared for the proposal’s outcome since it will likely be approved.

Looking beyond the delisting from the LSE exchange, the company, with operations in both Russia and Kazakhstan, will consider a division into two independent ones to mitigate future operational risks. This development is further fueled by an already established presence of Polymetal in resource-rich Kazakhstan, with an announced plan to build a hydrometallurgical plant in the country (supported by the Kazakh authorities, who signalled their support for re-domiciliation).