Conditions of transactions involving shares/interests which influence decisions on granting permission to carry out such transactions
In the case of transactions amounting to more than USD 100 million, the Governmental Commission must consider whether the following conditions for carrying out such transactions are met:
- The existence of an independent assessment of the market price of the assets;
- The sale of the assets at a discount of at least 50% of the market value of the assets;
- The setting of key performance indicators (KPIs) for the new shareholders/participants;
- The facility to pay by instalments over 1−2 years and/or
- The voluntary remittance of funds to the federal budget amounting to at least 10% of the transaction amount.
By decision of the Governmental Commission or on the basis of a petition from a federal executive body, the above conditions may be applied to smaller transactions.
We should point out that the need to obtain advance approval for transactions from the Governmental Commission was established by Edicts No. 81, No. 618 and No. 737 of the President of Russia. At the same time, transactions involving shares/interests in some legal entities may require a special decision of the President (Presidential Edict No. 520). More details about this can be found in our alert here
. We do not rule out the possibility of conditions similar to those set out in Minutes No. 116/1 being applied to transactions involving companies listed in Presidential Edict No. 520.