VTB reopening talks on buying state stake in Belarusian subsidiary
MINSK. Aug 15 (Interfax) - VTB is resuming negotiations with the Belarusian authorities on the purchase of the state's stake in the Russian company's subsidiary VTB Bank (Belarus) with the aim of increasing its own stake from 71.4% to almost 100%, the chief of the Belarus bank Vladimir Ivanov told the press.
"The deal's realization was delayed for technical reasons, but we are resuming negotiations with the authorities next week. We're almost certain that the purchase of the state stake in our bank will take place before the end of this year," Ivanov said.
At present, the Belarusian government and shareholders associated with it own 28.6% of the stock in the bank (Belneftekhim has 16.3%). An agreement in principle that VTB would increase its stake in it was achieved during a meeting between VTB chief Andrei Kostin and Belarusian President Alexander Lukashenko last October.
There are certain difficulties with preparing the deal, Ivanov said.
Delaying in coordinating the consolidation of assets does not allow the parent company to carry out the Belarusian bank's recapitalization, which is necessary from the standpoint of the negative effect of last year's precipitous devaluation of the Belarusian ruble. As a result, the bank is unable at this point to expand lending to corporate clients because it is bound by regulatory requirements pertaining to risks per borrower. In the first half of this year, the Belarusian bank's corporate credit portfolio grew just 9.2%, and the bank's share of the legal-entity market slipped from 2.3% at the start of the year to 2.2% as of July 1.
The bank's charter capital on that date was BYR 84.37 billion, unchanged from January 1. However, if reckoned in U.S. dollars, it had fallen from $28.1 million to $10.17 million because of the national currency's devaluation.
At the beginning of this year, Ivanov said that VTB would take its stake in its Belarusian subsidiary to 97.3%. The value of the state stake was, he said, agreed at "a little higher" but proportional to the amount VTB paid in 2007 for additionally issued Slavneftebank shares (Slavneftebank was subsequently renamed VTB Bank (Belarus)) - $25.443 million - which allowed it to take control over the bank (50% plus one share). The price for the state's 25.9% will be roughly comparable to half the amount paid for the controlling stake.
The terms for Slavneftebank's sale to the VTB group involved the Belarusian government retaining a blocking stake, since the bank had been set up to serve oil refiners and petrochemicals makers, one of the country's key sectors. So, Lukashenko's okay is a must for VTB to consolidate its stake in the Belarusian bank.
