22 Mar 2023 11:41

Sale and purchase agreement for shares of Alfa Bank parent entity concluded in Feb, awaiting approval in Russia, EU

MOSCOW. March 22 (Interfax) - The sale and purchase agreement for a 100% stake in the parent entity of Alfa Bank was concluded in February, and it is currently awaiting the respective regulatory approvals from the European Union and the Russian Federation, AB Holding said in its 2022 report.

It became known in early March that Mikhail Fridman and Pyotr Aven planned to exit the capital of Alfa Bank by selling their shares to banking business partner Andrei Kosogov in order to have Western sanctions lifted. The credit organization is valued at 178 billion rubles, or $2.3 billion, the Financial Times has reported, citing sources.

Kosogov is expected to purchase Alfa Bank from Cyprus-based ABH Financial Ltd, of which Kosogov is one of the beneficiaries along with Fridman and Aven. Alfa Bank's current ownership structure is unknown, though the final link in the bank's ownership chain was AB Holding, owned by ABH Financial Ltd, when the corresponding information was last disclosed.

"In February 2023, ABH Financial Ltd entered into an agreement with one of the beneficiaries to sell and purchase the company's shares. The agreement requires the approval of the regulatory authorities of the Russian Federation and the European Union countries. The approvals have still not been received as of the issue date of the financial statements," AB Holding said in the report signed on March 16.

The deal is scheduled to close this spring, but it must be approved by regulators, including the Central Bank of Russia and the tax authorities. Moreover, approval of the U.S. and EU sanctions authorities could be required, the FT sources said. Alfa Bank is on U.S. and European sanctions lists, while Fridman and Aven are under EU and UK sanctions.

Such a deal really is being mooted. It's too early to talk about its completion - the parties need to go through a number of corporate and legal procedures, Alfa-Bank has said. "Neither Andrei Kosogov nor the seller have been sanctioned, so it is likely that approval of the transaction by foreign regulators will not be required. One way or another, the transaction will be carried out in full compliance with all applicable laws. The main outcome of the transaction, if it takes place, will be that the core owner of the bank will be a Russian citizen and one of the founders of Alfa Group, Andrei Kosogov," it said.

The Central Bank of Russia has not yet received proposals regarding a change of Alfa-Bank's shareholders, Central Bank Governor Elvira Nabiullina said at a press conference on Friday.

"As for the change of the owner of Alfa-Bank, we have not yet received such proposals for a deal. We don't know whether this needs to be cleared with the Central Bank, so I can't say. We haven't had a request from the bank's owners," she said.

"If a transaction comes to us for approval, we will certainly assess it for compliance with the law, and assess the buyer of the shares," Nabiullina said.

Alfa Bank ranked fourth by assets in the Interfax-100 ranking in 2021.

It follows from the report that the Belarusian Alfa-Bank may also be among the assets passing into Kosogov's ownership. The document says that AB Holding is currently awaiting permission from the National Bank of Belarus to purchase a stake in CJSC Alfa-Bank. As of the beginning of 2022, the Russian Alfa-Bank owned 30.8% of the shares of the Belarusian bank, and the Cyprus-registered ABH Belarus Limited had 64.5%, its ultimate beneficiaries being the same as those of ABH Holdings S.A.