Kremlin kicks off sale with VTB offering

RUSSIA has kicked off a massive $60bn?(£37.4bn) privatisation drive with the sale of part of its stake in the country’s second biggest bank VTB, raising $3.26bn.

The Kremlin sold a ten per cent stake in the lender, which it stepped in to rescue at the height of the financial crisis.

Russian Prime Minister Vladimir Putin yesterday hailed the placement as a success, despite the “considerable” financial challenges his country faced.

In a meeting with the bank’s President, Andrei Kostin, he said: “I expect that this move, which undoubtedly attests to confidence that investors have in our financial system and our economic policy, will be to the benefit of the financial system, the economy and to VTB.”

Bank of America Merrill Lynch, Deutsche Bank and VTB Capital advised on the sale, which sees the government reduce its stake in the lender to 75 per cent.

The sale comes as Moscow gears up for a privatisation drive to sell off a swathe of state-owned assets.

The chief executive of Sberbank, Russia’s biggest lender, yesterday said the government will sell its seven per cent stake in the bank during the second half of this year.

German Greff, who is also a former Russian finance minister, said: “We are discussing it actively with the central bank. We will try to place [the 7-per cent stake] in the second half of the year.”

However, head of Russian investment banking at Renaissance Capital Alexander Merzlenko said the government was “not sure” about when to best bring its assets to market.

He said: “Every time the agenda slightly changes. You have the interests of finance ministers, who care about the budget with the interests from business ministers, who care about the individual businesses.”

ANDREA ORCEL

BANK OF AMERICA MERRILL LYNCH

EXECUTIVE chairman of global banking and markets Andrea Orcel led the Merrill Lynch team on the sale of the Russian government’s stake in VTB. Chairman of global capital markets Rupert Hume-Kendall ran the share offering for the bank, which acted as sole agent and financial adviser to the Kremlin, as well as joint global coordinator and joint bookrunner.

Deutsche Bank and VTB Capital, the lender’s investment arm, also acted as joint
bookrunners.

VTB Capital also acted as joint global coordinator on the transaction.