Kim sells his stake in MDM Bank - paper
MOSCOW. Nov 21 (Interfax) - Igor Kim has sold his stake in MDM Bank , for which he will receive cash and MDM Bank subsidiary Latvian Trade Bank (LTB). A large part of Kim's stake will go to the bank's main beneficiary - Sergei Popov.
MDM Bank Chairman Sergei Timofeev told Vedomosti newspaper that the deal had been closed last Friday. The bank will buy Kim's share and it will then be distributed among shareholders.
A Vedomosti source said minority shareholders are unlikely to increase their stake and most of Kim's stake will be transferred to the bank's other co-owner Popov.
One minority shareholder said Kim would receive LTB for around a fifth of his stake and "cash for the lion's share - but with a discount." The Latvian bank had equity of 2.6 billion rubles on June 30 and MDM Bank - 66 billion rubles. Kim's 11% share is valued at 7.26 billion rubles, the paper says.
Kim, the main beneficiary of URSA Bank and MDM Bank co-owner Popov agreed in December 2008 to merge the two banks. They put their stakes together into a joint company, which owns 65% of the MDM Bank holding company. The company was managed on a 50/50 basis. The agreement said that neither Kim nor Popov could pull out of the business for five years after the consolidation.
Asked why Kim was pulling out of MDM Bank, after one of the biggest bank merger deals of late, Timofeev said: "The tasks set by shareholders have been carried out and the process of integration successfully completed and Igor has had his own projects crop up. Therefore he preferred to pull out of MDM Bank, selling his stake. It was a mutual wish of the shareholders. After discussion of the first half results consultations began on Igor pulling out."
Kim quit his post as MDM Bank chairman in July 2010 and this year he quit the board of directors.
It was announced at the end of October that Kim had acquired Barclays Russian subsidiary.
Popov owns 56.3% of MDM Bank. Kim had held 11%. Martin Anderson, the founder of the Brunswick Group, owns 6.3%, Olivant Ltd owns 6.7%, Russia Partners (part of Siguler Guff & Company) - 4.5%, the International Finance Corporation (IFC) - 3.6%, Troika Capital Partners - 2.2%, and German Development Corporation DEG - 1.9%. Kim's long-standing partner Andrei Bekarev owns 1.5% and he does not plan to sell his stake. Other minority shareholders own 0.8% of the bank.
MDM Bank was ranked number 15 by asset value in the Interfax-100 review of Russia's banks for the third quarter of 2011. The review is compiled by the Interfax Center for Economic Analysis.