...

SOFAZ ready to invest $500 million to purchase major Russian bank’s shares

Business Materials 29 April 2013 20:04 (UTC +04:00)
The State Oil Fund of Azerbaijan (SOFAZ) is ready to acquire a stake worth the equivalent of $500 million in the Russian bank VTB, the fund told Trend on Monday.
SOFAZ ready to invest $500 million to purchase major Russian bank’s shares

Azerbaijan, Baku, April 29 / Trend I.Khalilova /

The State Oil Fund of Azerbaijan (SOFAZ) is ready to acquire a stake worth the equivalent of $500 million in the Russian bank VTB, the fund told Trend on Monday.

"The State Oil Fund has announced the bank its intention to purchase shares from VTB Bank's new issue prospectus, proposing to acquire shares of the package worth the equivalent of $500 million. About three percent of the shares of the new issue will be purchased for this amount at a market value," the fund said.

According to the bank's statement, the Supervisory Board of VTB Bank announced that it had resolved to attract new capital in amount of up to Rub 102.5 billion ($ 3.23 billion) through the issuance of 2.5 trillion new ordinary shares by way of an open subscription at a price of Rub 0.041 per share.

Along with the State Oil Fund of Azerbaijan, VTB Bank has received firm and binding commitments from a group of investors comprising existing and new shareholders, including three prominent sovereign wealth funds: Norges Bank Investment Management (the Kingdom of Norway) and Qatar Holding LLC (the State of Qatar) to subscribe for the entire amount of the offering.

VTB Bank's existing shareholders as of April 26, 2013 will have statutory pre-emptive rights to subscribe for New Shares at the price per share in the Offering. The pre-emptive subscription period is expected to run from May 6 to May 17, 2013.

VTB Bank expects that the Federal Agency for State Property Management ("FASM") will not exercise its statutory pre-emptive rights in connection with the Offering, which is expected to result in a dilution of the FASM's current shareholding of 75.5% to 60.93%, following the placement of all new shares.

The capital raise will increase VTB Bank's Tier 1 capital ratio and total capital ratio as of December 31, 2012 to approximately 11.9% and 16.3%, respectively, following the placement of all new shares.

SOFAZ was established in 1999 with assets of $271 million. As of April 1, 2013, SOFAZ's assets amounted to over $34.325 million, or 0.6 percent more compared with the beginning of the year.

The main purposes of the fund are the accumulation of funds and the placement of these fund's assets abroad to minimize negative trends in the economy by preventing 'Dutch disease'. This ensures savings for future generations and the continuity of the country's current socio-economic standard.

The projected total cost (average amount) of SOFAZ's investment portfolio for 2013 was set at 25.2 billion manat, while as of late 2012 it was projected at 23 billion manat.

According to SOFAZ's investment strategy, for the first time since last year up to five per cent of the fund's total investment portfolio may be invested in stocks, up to five percent - in real estate, and five percent - in gold.

The official exchange rate on April 29 is 0.7846 AZN / USD.

Tags:
Latest

Latest