Lidings Team Successfully Completed Procedure of Forced Conversion of Depositary Receipts into Shares of One of Russia's Largest Oil Companies

Lidings' sanctions compliance and corporate & M&A practice lawyers managed the conversion of depositary receipts (ADRs) into stocks of a Russian issuer in support of private clients from Europe and the United States.

In the middle of April 2022, the President of the Russian Federation signed a law1 prohibiting the placement and circulation on foreign stock exchanges of depositary receipts for the stocks of Russian issuers - such companies had to undergo a delisting procedure and convert the receipts into stocks.

The procedure of forced conversion of depositary receipts, which was new for the Russian legal system, was conducted in the absence of unified regulatory, recommendation or guidance documentation, which required a quick response to the changing requirements of Russian depositories to the documents of foreign applicants.

The Lidings team advised the client to quickly prepare and submit the required documents to Russian depositories, which resulted in successful opening of C accounts with banks and depositing of converted stocks amounting to over one hundred million rubles.

The project was managed by Andrey Zelenin, Managing Partner of Lidings, Ellina Izotkina, Senior Associate, and Kirill Evstifeev, Legal Trainee.

Ellina Izotkina, Senior Associate of Lidings Due to our wide network of contacts with leading law firms around the world, extensive experience in international and national securities circulation and the professional expertise of the team, we were able to advise our clients and successfully convert depositary receipts, avoiding a lengthy and wasteful litigation with depositories and state authorities.

1Federal Law No. 114-FZ dated 16.04.2022 “On Amendments to the Federal Law “On Joint-Stock Companies” and Certain Legislative Acts of the Russian Federation”