PPF Group selling Russian subsidiaries for 530 mln euros, recognizes 900 mln euros losses

MOSCOW. Dec 7 (Interfax) - PPF Group is selling its Russian subsidiaries for 531 million euros, recognizing a net loss of 900 million euros, the group said in a financial report.

PPF Group originally expected sell controlling stakes in its Russian divisions for around 26.4 billion rubles in the first phase of the asset disposal.

The first phase includes the sale of 50.5% in Russia's HCF Bank, Home Credit Insurance, and microlending organization Kupi ne Kopi (Buy Don't Save), as well as 100% of Forward Leasing and the Vsegda da (Always Yes) company, the group said in its annual report.

The second phase of the deal involved selling the group's remaining stakes in its Russian divisions for 16.4 billion rubles. This phase was due for completion before November 2023. The seller and the buyer also have the right under certain conditions to accelerate settlement of the deal, as a result of which the price could be reduced.

The group ultimately sold controlling stakes in the Russian subsidiaries for 383 million euros and will receive 149 million euros or 9.1 billion rubles for the residual 49.5%, the report says.

First phase investors were a group of Russian individuals led by Ivan Tyryshkin, the former head of the RTS. HCF Bank itself is the second phase investor.

The sale was accelerated through replacing each of Russian individual investors who had been parties to Phase 1 of the transaction with HCFB as the purchaser of the remaining shares. HCFB registered title to a 49.5% stake in itself on August 24 and to an identical residual stake in Kupi on October 24. The transfer of 49.5% of shares in HC Ins and the payment of the related purchase price is expected to be completed within the forthcoming months and upon obtaining all requisite Russian regulatory approvals.

PPF Group reported an audited loss 318 million euros for H1 2022, mainly resulting from costs associated with its exit from the Russian banking market, compared with profit of 188 million euros in the same period of 2021.

HCF Bank was Russia's 30th largest bank by assets at the end of 2021, according to the Interfax-100 ranking.