MOSCOW, April 1. /TASS/. The Arbitration Court of the Moscow Region upheld the application of the Russian Industry and Trade Ministry to suspend the corporate rights of the Dutch X5 Retail Group N.V. in respect of its Russian entity, the company said in a statement.
"The Arbitration Court of the Moscow Region has satisfied the claim of the Ministry of Industry and Trade of the Russian Federation to suspend the Company’s corporate rights in its Russian subsidiary, X5 Corporate Centre LLC," the company reported.
The retailer also indicates that the court decision does not affect X5's trading operations in Russia. The X5 Group operates the Pyaterochka, Perekrestok and Chizhik retail chains.
On March 29, Dutch X5 Retail Group N.V., it reported that the Industry and Trade Ministry notified the company of filing an application with the court. The company indicated that the application, if granted, would lead to the suspension of the company's shareholder rights in relation to the Russian entity and the subsequent distribution of shares of the Russian company between the holders of depositary receipts and the ultimate owners of X5 Retail Group N.V. At the same time, the subsidiary company will be transformed into an open joint-stock company with shares listed on the Moscow Exchange.
Filing an application to suspend the corporate rights of foreign companies is possible on the basis of the law on the specifics of regulation of corporate relations in business companies that are economically significant organizations. Corporate Center X 5 is included in the list of economically significant organizations.
X5 is the leading Russian retailer in terms of revenues. The company managed 24,472 stores as of December 31, 2023.
About company’s further steps
X5 notes that the court granted the application in full, but the full text of the decision has not yet been published.
"The Company is not aware of its specific content and the date of issue, which serves as the starting point for the procedures of the Law. Nevertheless, it is already understood that the Court decision suspends the Company’s shareholder rights in the Subsidiary and transfers the Company's shares in the Subsidiary to the Subsidiary itself," the press release says.
"The decision also means that Russian holders and ultimate owners of the Company’s depositary receipts (DRs) on the date of issue of the full text of the Court decision will be required to accept a distribution of shares in the Subsidiary proportionate to their shareholding in the Company, while the Company’s non-Russian holders and beneficiaries on the date of issue of the full text of the Court decision are granted an option to do so," the retailer said.
"The Company is closely examining the consequences and legal options following the Court decision and will issue an update as soon as the full text of the Court decision text is issued. In doing so, the Company remains committed to acting in the best interests of X5 shareholders and other stakeholders," X5 says.