Monday 24 September 2012 10:58 pm

Promsvyazbank confirms plans for London float

PROMSVYAZBANK (PSB), one of Russia’s largest privately owned lenders, said yesterday it will proceed with its long-awaited initial public offering (IPO), aiming to strengthen its capital and better position itself to compete with state-owned banks. PSB is seeking to capitalise on positive investor sentiment towards Russian banks, powered by market leader Sberbank’s partial privatisation last week, which raised just over $5bn (£4bn). With the Sberbank deal now out of the way, PSB is joining companies like Russia’s second biggest mobile phone company MegaFon – which is eyeing a $3bn float in London – in seeking an international listing. Promsvyaz Capital, through which brothers Dmitry and Alexey Ananyev own an 88.3 per cent stake in PSB, will sell existing ordinary shares in Moscow and global depository receipts (GDRs) in London. After the offering, the lender plans to issue new ordinary shares via a closed subscription, in which Promsvyaz Capital has agreed to participate. The European Bank for Reconstruction and Development (EBRD), which owns the rest of PSB, is considering participating in the closed subscription, PSB said. The EBRD may convert a 3.5bn rouble (£70m) subordinated loan provided to PSB in 2011, with a view to maintaining its ownership level at 11.75 per cent. Artem Konstandian, chief executive with PSB, said yesterday that offering existing shares first and issuing new ones subsequently is “a just a matter of technique, more comfortable” in the current market environment. He said the purpose of the IPO is to raise new capital for the bank, not for existing shareholders to make money selling their stakes. In September, PSB asked Russia’s regulator to approve the listing of no more than 25 per cent of its shares in London in the form of GDRs. It had planned to raise around $1bn in the form of new and existing shares but sources said last week that PSB now aims to raise up to $500m.