Onexim buys stake in Renaissance Capital
Russian billionaire Mikhail Prokhorov, through his Onexim Group, is buying half of investment bank Renaissance Capital. Onexim will pay $500 million for the stake, through a share issue. Both sides deny the deal is the result of stock market volatility.
One plus one is more than two. That's how Mikhail Prokhorov commented on the deal. Renaissance group will keep control with 50% plus one share and will remain in operational control of the bank. Onexim will nominate 3 out of 7 board members.
According to Prokhorov, partnership talks with Ren Cap began several months ago, but the global financial crisis hastened the deal.
“This crisis hits not only several banks, it hits the system. It hits the old roots and our main task for the time being is to fill the gap between old leaders and newcomers on the first stage, to be a global leader of the emerging markets and on the second stage to be a global leader all over the world. This is our strategy.”
Many Russian and foreign banks expressed interest in becoming partners with RenCap according Renaissance Group CEO, Stephen Jennings.
“We are enormously ambitious. Mr.Prokhorov is equally well-known for being ambitious so the rate of growth extraordinary growth we've had in the last 10 years will continue and, most likely, will accelerate because of the competitive situation.”
RenCap is already the leader in the Russian, Ukrainian and Kazakh markets. It plans to remain Russian-focussed while expanding into other emerging economies like India, China.
According to Ren Cap its balance sheet is strong and it hasn't suffered from the global financial crisis. It forecasts a net profit of $400 mln this year. Prokhorov believes the turbulence of the financial markets will provide opportunities through the bankruptcy of some banks.