MICEX may borrow 4 bln rubles to buy shares for options
MOSCOW. Oct 26 (Interfax) - The RTS board has approved the opportunity for the MICEX group to obtain a 4 billion ruble loan, sources familiar with the board's decision, told Interfax.
"The loan is necessary for the purchase of CJSC MICEX shares, which will later go into an option program for management," the source said, without clarifying who the MICEX shares would be bought from.
The RTS-MICEX merger agreement values CJSC MICEX at 103.5 billion rubles. If the shares are purchased based on that valuation, MICEX can buy around 4% of its shares for 4 billion rubles.
"MICEX asked the RTS board to approve the opportunity of obtaining a loan to buy MICEX shares for an option program. The RTS board has approved this opportunity with its decision," an RTS spokesman said, without naming the confirmed amount. Approval is required by the RTS according to the documentation on the merger of the two businesses, he said.
MICEX CEO Ruben Aganbegyan said earlier that an option program for management would be determined before the end of the year. He said around 5% of MICEX shares would be used in the program.
A source close to MICEX told Interfax the board had not yet approved the option program.
CJSC MICEX already owns over 5% of its own shares. The company had to buy 5.37% of its shares from shareholders that do not approve of the merger deal by October 19.
"Among the items raised with the MICEX and RTS boards, it was indicated that MICEX-Finance would be the borrower and shares for the option program would be accumulated by it. The ceiling for the possible loan was set at 4 billion rubles and the real amount of the loan will depend on the decision on the size of the option program share package," a MICEX spokesman told Interfax.
Another source told Interfax that MICEX needs the loan to balance its wholly owned subsidiary MICEX-Finance.
The SPARK database shows that MICEX-Finance was established in February 2011. Charter capital was raised from 1 million rubles to 3.33 billion rubles in March. At the same time, MICEX-Finance acquired 12.7% of CJSC MICEX Stock Exchange shares, which were later exchanged for additional issue CJSC MICEX shares.
In addition, MICEX-Finance was used to buy RTS shares and in May it acquired 11% of RTS shares, which were previously owned by KIT Finance investment bank. Part of this stake was later acquired by CJSC MICEX shareholders. The RTS reported that on October 17, MICEX-Finance owned 9.51% of voting shares in the RTS. The RTS shares held by MICEX-Finance were to be converted into shares in the merged exchange and used for the option program.
"MICEX-Finance will use the loan to buy some of the CJSC MICEX shares, which the latter acquired from the compulsory purchase of shares from shareholders that did not approve of the merger. In addition, MICEX will replace internal funding for the purchase of RTS shares, especially from KIT Finance, for external funding," a source familiar with the details of the deal with RTS said. He explained that for the purchase of RTS shares from KIT Finance, CJSC MICEX was credited by MICEX-Finance, which, receiving the money from an external source, will return the parent company money.
The RTS-MICEX merger is due to take place on December 19.