Sberbank funds Belaya Ploschad purchase for O1
MOSCOW. Jan 30 (Interfax) - Sberbank subsidiary Sberbank Investments Limited bought a 33.3% stake in Cyprus-based Aflemor Investments Ltd., in December.
The stake was purchased for $100 million, Sberbank's LPN program prospectus says.
Sberbank Investments acquired redeemable preferred shares - a tool used in mezzanine financing.
Sberbank did not announce what Afelmor Investments owns. The SPARK Interfax database shows that a company with a similar name - Afelmor Overseas Ltd - owns Moscow's LLC Belaya Ploschad.
Sources told Interfax in November that Boris Mints' development company O1 Properties was holding talks with Sberbank about a $700 million loan to acquire the business center Belaya Ploschad on Tverskaya Zastava square in Moscow. Real estate market players said Belaya Ploschad was owned by Investment Company AIG/Lincoln and VTB Capital.
A source told Interfax Wednesday that the $100 million was mezzanine financing for a deal enabling O1 to buy Belaya Ploschad. Sberbank's $100 million investment does not cancel the $700 million loan that was announced earlier, he said. O1 is also putting its own money into the deal, which is worth around $1 billion. The deal could be announced very soon, the source said.
Another source said Sberbank invested in Afelmor capital as a temporary measure to maximize its return on project participation.
O1 told Interfax that its investment department does not have any information on Afelmor Investments. The deal to buy Belaya Ploschad has not yet taken place; only the $700 million loan from Sberbank has been approved.
Sberbank CIB co-owner Alexander Bazarov spoke about the practice of minority participation in projects financed by Sberbank in a recent interview with Interfax. "These are minority stakes that enable us to achieve additional revenue. Because as a shareholder you only go into the project when return from share capital is higher than the cost of debt you have raised. As we are offering the debt financing, we only look at projects where the return on the project is higher than the cost of debt. We say it is comfortable for us to finance you and to become a minority shareholder. We understand that you as a shareholder should make 25% on this deal and we also want to make 25% with our minority stake," Bazarov said.
