23 Jul 2009 11:37

Sberbank mulls GDR issue backed by existing shares

MOSCOW. July 23 (Interfax) - Sberbank Russia is examining opportunities to issue Global Depositary Receipts (GDR) to be backed with existing shares.

"We actually are thinking about that. Most likely it would be a conversion," Sberbank CEO German Gref told journalists on Wednesday.

Sberbank is currently holding consultations with the Federal Financial Market Service (FFMS). "The legislation needs to be changed or, shall we say, the sublegislative acts," he said.

Gref did not specify a timeframe for the GDR program. "As soon as the time is right we will definitely do that," he said.

It was reported earlier that Sberbank might place GDR this year.

The bank is in talks with the FFMS to ease the requirements for approving a GDR placement.

Sberbank Deputy CEO Anton Karamzin said that a positive outcome to the talks could be expected this fall.

A source close to Sberbank said the bank wants the FFMS to lift the requirement that shareholders whose shares will back the GDR must offer a portion of those shares on the Russian market.

Under current rules, the FFMS will clear a placement of GDR equal to no more than 70% of the shares earmarked for the placement. At least 30% of the shares must be offered for sale on the Russian market.

Sberbank is asking the FFMS to allow the bank to place 100% of the designated shares abroad.

Planning for a GDR issue on the London Stock Exchange began in 2007.

In January 2008 the bank expected the GDR program to exceed $6 billion-$7 billion.

In 2004 Deutsche Bank and investment company UFG issued non-sponsored GDR on the Frankfurt exchange equal to 1.32% of ordinary shares valued at $110 million. The organizers had planned to boost the number of GDR in circulation to 19.9%. However, that plan never materialized and the GDR on the German exchange are now illiquid.