Freedom Holding Corp. Enters into Agreement to Sell Russian Businesses
20 October 2022 - 7:59AM
Business Wire
Sale to Maxim Povalishin Subject to Central Bank
Approval
Freedom Holding Corp. (Nasdaq: FRHC) (the “Company”) today
announced that it has entered into an agreement to sell its Russian
subsidiary, Investment Company Freedom Finance LLC (“Freedom RU”),
together with Freedom RU’s subsidiary FFIN Bank LLC (such companies
together the “Russian Subsidiaries”). The transaction is subject to
the approval of the Central Bank of the Russian Federation and is
expected to close in the coming months.
The Russian Subsidiaries are the Company’s only subsidiaries in
Russia. The Russian Subsidiaries are being acquired by Maxim
Povalishin, who is currently the Deputy General Director and a
member of the Board of Directors of Freedom RU. As consideration
for the purchase of the Russian Subsidiaries, Mr. Povalishin will
(1) pay cash in an amount of approximately US$33 million (subject
to adjustment based on the Russian ruble-U.S. dollar exchange rate
on the closing date) and (2) be assigned the Company’s obligation
to Freedom RU under an outstanding deferred payment in the amount
of approximately RUB 6.6 billion (currently approximately US$107
million) which resulted from the purchase by the Company of Freedom
RU’s Kazakhstan subsidiary Freedom Finance JSC (“Freedom KZ”) (with
its subsidiaries) from Freedom RU as part of a corporate
restructuring. Completion of the purchase of Freedom KZ is subject
to regulatory approvals and is expected to occur prior to the
closing of the sale of the Russian Subsidiaries.
Mr. Povalishin has informed the Company that he will use his
personal funds, including from sales of stock he was granted while
an executive at Freedom RU, to finance the cash component of the
purchase price.
The parties expect that, following the completion of the sale of
the Russian Subsidiaries, a number of existing clients of the
Russian Subsidiaries will invest in the non-Russian international
capital markets going forward through accounts at other
subsidiaries of the Company, subject to appropriate on-boarding for
compliance purposes.
“This is an excellent transaction for both organizations,” said
Timur Turlov, chief executive officer of Freedom Holding. “We are
focused on our growth in Kazakhstan, other areas of Europe and the
United States, the latter through our New York Stock Exchange
member firm, Prime Executions. Consumers in Europe are gravitating
to our platform, and this transaction will allow us to focus on
that growth.”
“We regret that the challenging geopolitical circumstances have
made it necessary for us to sell our Russian subsidiaries,” Mr.
Turlov added. ”Our Board and management undertook a rigorous
process and believe this is the best possible result for
shareholders in these difficult circumstances. The sale of our
Russian subsidiaries will enable us to accelerate growth in other
markets.”
“We look forward to further developing these businesses in
Russia,” said Mr. Povalishin. “The foundation is strong, and we
plan to develop our own ecosystem and offer comprehensive
services.”
About Freedom Holding:
Freedom Holding Corp. provides financial services, retail
financial securities brokerage, investment counseling, securities
trading, investment banking and underwriting services through its
subsidiaries. The company is incorporated in Nevada and is
headquartered in Almaty, Kazakhstan. The company has a presence in
14 countries, including Cyprus, the United States, Uzbekistan, the
United Kingdom and Germany. The company's shares are traded on the
Nasdaq Capital Market under the ticker FRHC.
Cautionary Note Regarding Forward-Looking Statements
This release contains “forward-looking” statements, including
with respect to the Company’s ability to successfully complete the
transaction described herein and its ability to accelerate its
growth in non-Russian markets. All forward-looking statements are
subject to uncertainty and changes in circumstances. In some cases,
forward-looking statements can be identified by terminology such as
“expect,” “new,” “plan,” “seek,” and “will,” or the negative of
such terms or other comparable terminology used in connection with
any discussion of future plans, actions and events. Forward-looking
statements are not guarantees of future results or performance and
involve risks, assumptions and uncertainties that could cause
actual events or results to differ materially from the events or
results described in, or anticipated by, the forward-looking
statements. Factors that could materially affect such
forward-looking statements include certain economic, business, and
regulatory risks and factors identified in the Company’s periodic
and current reports filed with the U.S. Securities and Exchange
Commission. All forward-looking statements are made only as of the
date of this release and the Company assumes no obligation to
update forward-looking statements to reflect subsequent events or
circumstances. Readers should not place undue reliance on these
forward-looking statements.
Website Disclosure
Freedom Holding Corp. intends to use its website,
https://ir.freedomholdingcorp.com, as a means for disclosing
material non-public information and for complying with U.S.
Securities and Exchange Commission Regulation FD and other
disclosure obligations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221019006061/en/
Media: Deborah Kostroun Phone: +1 201 403-8185 Email:
Deborah@zitopartners.com
Freedom (NASDAQ:FRHC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Freedom (NASDAQ:FRHC)
Historical Stock Chart
From Jul 2023 to Jul 2024