Sovcombank shareholders approve additional share issue to purchase HCF Bank

MOSCOW. May 3 (Interfax) - Shareholders of Sovcombank have decided to boost the bank's equity capital by issuing an additional share placement as part of the first stage of the transaction to purchase HCF Bank, which operates under the Home Bank brand, Sovcombank said.

Sovcombank said that it would place 1.173 billion ordinary shares at par value of 0.1 ruble per share through private offering. The volume of the additional issue at par value would be 117.3 million rubles. The bank will set the placement price of the additional share issue later.

Sovcombank currently has equity capital of 2.07 billion rubles, comprising 20.694 billion ordinary shares at par value of 0.1 ruble per share, which could rise 5.7% to 2.19 billion rubles following the additional issue.

The shares of the additional issue are planned for placement in favor of Smart Capital Management Company LLC, acting as the trustee of the Financial Independence combined closed-end mutual fund. Unified State Registry of Legal Entities (USRLE) data indicate that Ibrahim Zagidulin is the sole owner of the management company, with Zagidulin having previously owned 9.9% of HCF Bank.

The Home Capital company, whose founders are undisclosed, is the principal owner of HCF Bank with a stake of 99.98%, having received 49.5% of HCF Bank in January 2023. Prior to this, Ivan Tyryshkin, former head of RTS, had owned 9.91% of the bank, and Violetta Chaika, Zagidulin, Dmitry Chemendryakov, and Yelena Martynenko had owned 9.9% each.

Home Capital's stake in HCF Bank nearly doubled after redemption of the treasury shares.

Sovcombank announced plans to buy HCF Bank in mid-February 2024. The deal is scheduled to be closed by the end of 2024. Sovcombank plans at the first stage to buy out 51% of the shares in HCF Bank through an additional issue of its own shares totaling 5% of the equity capital, or slightly more than 15 billion rubles. Sovcombank plans at the second stage to acquire the remaining 49% of the shares in HCF Bank by the end of 2024, for which the bank will pay cash in installments over 2024-2025.

Funds raised as part of Sovcombank's IPO could be used to pay for the second part of the transaction, the bank's executive board first deputy chairman Sergei Khotimsky said previously. The IPO in December 2023 totaled 11.5 billion rubles accounting for the stabilization package, and totaled 10 billion rubles without the stabilization package.

Sovcombank was 9th in terms of assets with of 3.212 trillion rubles in 2023 in the Interfax-100 ranking prepared by the Interfax Center for Economic Analysis, and HCF Bank was 32nd with assets of 309 billion rubles.