Otkritie valued at 0.6x equity for sale of 100% of shares to VTB, Central Bank deems deal a success

MOSCOW. Dec 22 (Interfax) - Otkritie Group was valued at 0.6x equity for the deal with VTB , the Central Bank told Interfax.

"According to the appraiser's calculations, the market value of the Otkritie was between 328 billion and 374 billion rubles. This corresponds to a multiple of more than 0.6x for the market value of shareholders equity capital and the book value of net assets. In the current conditions, this is a good market indicator, and we deem this transaction to be successful," the Central Bank said.

The cost of the deal will be 340 billion rubles as a result.

"In terms of the Bank of Russia's costs, then we recall that investments Otkritie Bank's capital during the bailout were 555 billion rubles. Taking dividends into account, the Bank of Russia will receive compensation of 352 billion rubles. At the same time, litigation will continue with the persons who controlled Otkritie before the bailout, this is a lengthy process," the regulator said.

The Central Bank said in Thursday that it had agreed the terms for the sale of Otkritie to VTB.

"The agreement is complex, it contains a certain list of conditions for the transaction, including assurances of the parties, in keeping with normal business practice," the Central Bank said.

VTB will pay a cash consideration of 233.1 billion rubles plus federal loan bonds or OFZ worth 106.8 billion rubles at market value for the shares. The deal will close by December 31. The Central Bank did not given any other details.

"The Bank of Russia has repeatedly stated its desire to exit the capital of the rehabilitated banks as quickly as possible. At the same time, we have always sought a reasonable balance between the maximum reimbursement of the costs of financial recovery and the date for such an exit, guided by the market situation. With regard to the Otkritie banking group, we also looked closely at various sale strategies, including a sale to a strategic investor and a piecemeal sale," the Central Bank said.

"Reserving the right to make a final decision taking into account various circumstances, we had also been preparing for a public offering. The market situation changed fundamentally at the beginning of 2022, and this option was no longer possible. The arrangements with VTB on the sale of Otkritie before the end of 2022 meet our goals. We, together with VTB Bank, selected an independent appraiser who assessed the market value of the group and performed an audit of its business," the Central Bank said.