MDM Bank to buy back preferred shares, convert them to ordinary
MOSCOW. May 16 (Interfax) - MDM Bank plans to buy up Class 3 preferred shares on the market and convert them into ordinary shares.
Shareholders will vote on the share buyback and related issues at the AGM on June 20, 2011, the bank said in a statement.
The board of directors has set the offer price at 16.4 rubles per Class 3 preferred share.
The weighted-average price of the shares was 17.88 rubles at the close of trading on the MICEX exchange on May 13.
Bank charter capital totals 3.924 billion rubles, including 284.163 million Class 3 preferred shares (7.2% of charter capital). The shares were received in the merger with URSA Bank.
MDM charter capital also includes unlisted shares: 3.581 billion ordinary shares, 150,000 Class 1 preferred shares, 1.415 million Class 4 preferred shares, 1,210 Class 5 preferred shares, 21,450 Class 6 preferred shares, 2.531 million Class 7 preferred shares and 55.710 million Class 8 preferred shares.
The holders of the preferred shares have repeatedly criticized the bank's dividend policy. The bank announced in April that it would pay no dividends for 2010, including on preferred shares, causing their market price to drop 20%. They had fallen 30% in May 2010 when the bank made a similar announcement about dividends for 2009.
In April 2011 another bank in which MDM co-owner Igor Kim holds shares announced similar plans to buy back shares. Orient Express Bank said it would acquire all preferred shares (just over 1% of charter capital) and a portion of ordinary shares (5%) in order to simplify the shareholder structure.
The controlling shareholder in MDM Bank is Sergei Popov with 56.3%. Igor Kim owns 11%, Brunswick Group founder Martin Andersson - 6.3%, Olivant Ltd - 6.7%, Russian Partners (part of Siguler Guff & Company) - 4.5%, the International Finance Corporation (IFC) - 3.6%, Troika Capital Partners - 2.2%, German development corporation DEG - 1.9%, Andrei Bekarev - 1.5% and minority shareholders - 0.8%.
MDM Bank was the 15th biggest Russian bank by assets according to the Interfax-100 list as of the end of the first quarter of 2011.
RTS$#&: MBWB, URSA
