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Russian CB to sell Sberbank shares, but retain control

Russian CB to sell Sberbank shares, but retain control
Russian state-controlled Central Bank will sell 7.6% of its Sberbank shares by September 2011 as a part of government privatization plan.

The Central Bank of Russia is the main shareholder of Sberbank, controlling 57.6% of the latter bank’s shares. CB First Deputy Chairman Alexey Ulyukayev, speaking at the VTB Capital investment forum “Russia Calling” in London, said the deal is to be finalized as soon as the pool of strategic investors is approved

“We expect the transaction to be finalized in September. By now we hold negotiations with possible banks and financial consultants that can be attracted to conduct the privatization. The privatization may involve 4-5 investment banks and Sberbank acting as a technical agent for the deal have already addressed 16 investment banks with an offer to set up the bid,”

Ulyukayev added that the timeframe and price will depend on unbiased market analysis and previous experience.

"We look forward to selling the entire package, but market conditions can still impact the final decision. We will scrutinize all options and review all expert advices to come up with most efficient solution. September, according to our market experience and forecasts, is [the] right time assuming that [the] second part of October-November is not favorable on the global markets. Moreover, many companies are planning to list their shares at that time which is another sign for us,”

Vladimir Savov, Head of Equity Research at bank Otkritie, said the bank will look for long-term strategic investors Vladimir Savov, analyst at bank Otkritie, said the bank will look for long term strategic investors

“According to earlier announcements the stake could be divided and offered partly to strategic investors, and partly as a public offering. Offering the whole stake through a public offering would be more challenging, given its significant size--it can crease higher risk of supply overhang. However, the launch of Sberbank's depositary receipts program will likely expand the range of potential investors and reduce the risks of market oversupply. Sberbank is the most liquid stock in the Russian market currently and the main aim would be to find investors who’d rather keep the shares for longer than cash in on market price fluctuations. As of today according to the current Sberbank capitalization the value of stake to be offered by CBR is about 5.5 billion US dollars."