Russia raised US$3.3 billion selling a stake in VTB Group in the largest state asset sale since the bank’s IPO nearly four years ago.
Russian Prime Minister Vladimir Putin’s government sold 10 percent of the bank to a group of investors for 95.7 billion rubles (US$3.3 billion), the country’s -second-biggest lender said in a statement yesterday.
The per-share price of 9.1468 kopeks is 33 percent less than the 13.6 kopeks the government got in May 2007, when it raised US$8 billion in that year’s biggest IPO.
The sale is the first major transaction in a three-year privatization plan in which the government aims to raise about US$34 billion to help plug its budget gap and lessen its role in the economy. Three non-state companies, Nord Gold NV, OAO Koks and ChelPipe, all pulled their London IPOs this month, citing market conditions.
“Several” sovereign wealth funds from northern Europe and Asia bought stock in the offering, as did companies from “all over the world, including the US, UK, Europe and Asia,” Russian Finance Minister Alexei Kudrin said on state television yesterday, without identifying any of the buyers by name.
Assicurazioni Generali SpA, Italy’s biggest insurer, and private equity fund TPG Capital planned to buy US$300 million and US$100 million of stock, respectively, according to a term sheet obtained by Bloomberg News last week.
VTB, based in Moscow, gained as much 3.3 percent to 9.76 kopeks by 10.49am in Moscow yesterday, valuing the bank at 1.02 trillion rubles. The government bought 180 billion rubles of new VTB shares at 4.82 kopeks a piece in September 2009, boosting its stake in the lender to 85 percent. VTB shares tumbled to a record low 1.94 kopeks in March 2009.
“This move to attract investors clearly demonstrates confidence in our financial system as well as in our economic policies,” Putin told VTB chief financial officer Andrei Kostin at a meeting near Moscow.
Neither Putin nor VTB identified the buyers. Vladimir Melnikov, a spokesman for TPG in Moscow, declined to comment, as did Generali’s press service in Trieste.
Transactions involving global depositary receipts, priced at US$6.25 each, are scheduled to be completed on Thursday, while those for ordinary shares are due on Monday, according to the government’s statement. Deutsche Bank AG, Merrill Lynch and VTB Capital managed the sale.
The government this year plans to sell as much as 7.6 percent of OAO Sberbank, VTB’s bigger rival. Other major sales that may take place this year include stakes in shipper OAO Sovcomflot, grain trader United Grain Co and utilities OAO RusHydro and Federal Grid Co, according to the Russian Economy Ministry’s Web site.