Former German Chancellor Gerhard Schroeder was nominated for the company’s executive board but “strong political pressure in his country” has finally led to his appointment being withdrawn.
The shareholders of the Russian gas giant, Gazprom, decided this Thursday at its annual general meeting to suspend the payment of dividends for the 2021 financial year. Famil Sadígov, vice president of the Gazprom board of directors, announced in a statement that “the shareholders have decided that in the current situation it is not advisable to pay the 2021 dividends.” This decision has caused the shares of the consortium to plummet by up to 32.8% on the Moscow stock exchange, although they have later recovered a little with a final loss of around 30%.
According to Sadígov, «Gazprom’s priorities at the moment are the implementation of the investment program, which includes gasification of the regions of the Russian Federation, preparation for the coming winter and, of course, we must be ready to fulfill the obligation to pay higher taxes. Initially, it was planned to pay 52.53 rubles per share, which is equivalent to 1.24 trillion rubles (22.5 billion euros).
The shareholders also approved technical modifications to the regulations of the general meeting and renewed the composition of the board of directors. One of the nominees was former German Chancellor Gerhard Schroeder, but, in Sadígov’s words, “strong political pressure in his country meant that he had to withdraw his consent to the appointment.” For the third consecutive year, the meeting has taken place online.
Gazprom’s authorized capital consists of 23.674 million ordinary shares. The Russian State controls more than 50% of these titles, directly 38.37% and through the state companies Rosneftegaz, 10.97%, and Rosgazifikatsia, 0.89%.
The decision to suspend the payment of dividends has influenced the ruble, whose price in recent weeks has reached abnormal levels considering the state of the country’s economy. The Russian currency added more than 3.5% to 51.25 against the dollar, heading towards the 50 mark it hit on Wednesday for the first time since May 2015.
Against the euro, the ruble rose 4.3% to 53.55, after topping 53 earlier this week for the first time since April 2015. The ruble has become the world’s best performing currency this year. , fueled by steps taken to protect Russia’s financial system from Western sanctions imposed after Moscow sent troops to Ukraine on February 24.
But the strength of the ruble has generated concern in the Government and in exporting companies, since it reduces income from the sale abroad of raw materials and various merchandise paid in dollars and euros. On Wednesday, Finance Minister Anton Siluanov announced that Russia could cut state spending and channel funds for foreign currency interventions to check the strengthening of the ruble, which seriously threatens budget revenues.
Russia’s central bank could also ease upward pressure on the ruble by cutting interest rates as inflation slows and the economy needs cheaper credit. The Bank of Russia is expected to cut the benchmark rate to 9% from 9.5% on July 22.
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