24 Apr 2023 17:50

VTB's Kostin suggests handing assets of foreigners to management, gives Fortum and Inter RAO as examples

MOSCOW. April 24 (Interfax) - The assets of companies from unfriendly countries could be transferred to the management of specialized local players, said Andrei Kostin, the head of VTB .

"The Finns are not very friendly right now, and they have a big company, Fortum, let's say. They value it at billions of dollars, and there are many who would like to buy it abroad even, and in Russia. Why not take over the management of it? By Inter RAO , maybe, or some specialized management company. Let them manage and pay money to the state for this," Kostin said in an interview with the Rossiya 24 TV channel.

Fortum Oy is one of the biggest foreign investors in the Russian power industry, with nearly 100% of PJSC Fortum , formerly TGK-10. Fortum also holds around 30% in Russian power company TGK-1 , the principal shareholder of which is Gazprom Energoholding. Fortum said in May last year that it planned to leave the Russian market but it has not yet managed to sell its business.

"We'd return it when the sanctions are lifted. That would be fair," Kostin said, recalling the fate of VTB's European assets, which the group has effectively lost following the imposition of sanctions.

Buying assets from foreign players, even at an attractive discount for buyers, should not be the main option for "exiting" Russia, Kostin said.

"The interests of the state, in my opinion, dictate that it is better for us to slow down this process [of buying assets from unfriendly non-residents]. And I know the Central Bank's position [on the potential 'exit deals' of foreign banks], it is roughly the same. In some cases, this can be done as an exception, but as a system we want tooth for tooth, to replicate absolutely adequately and exactly wat they are doing against us," Kostin said.

He said that VTB, following the imposition of sanctions, had offered Western banks an asset swap, and they were ready for such transactions, but the European Union was not permitting them. "And now these banks are trying to leave [Russia]. I think that they should not be allowed to leave just like that, or even sold cheaply. There has to be some sense of justice," Kostin said.

Kostin also again called for privatization tools to be used to develop the domestic market. "This is above all a question of attracting private investment, and perhaps not so much even a fiscal task," he said. And the state does not have to give up control of companies. "Suppose the privatization of a 20% stake in Rosneft gave, in my opinion, as much money as all other enterprises that were privatized over a period of 10 years. We have other large enterprises, hypothetically, like Transneft , Russian Railways. Recently, our businessmen I was talking to wondered whether it was possible to buy a chunk of Russian Post," Kostin said.

Kostin recalled proposals he made last year to resolve the issue of the assets of Russian investors frozen abroad by using funds on "C" accounts, where the earnings of unfriendly non-residents are frozen.

"This is a lot of money, but the main thing is that people have suffered, and now if this decision is made, and I hope it will be, then Western investors can use their money to buy back from the Russians, and the Russians will receive their lawful rubles instead of those dollars that they invested in the American stock market or in the European one. I think this will create major investment opportunities, including in Russian securities," Kostin said.

He said a scheme for unfreezing assets might be approved in the near future: "I think these decisions are on the way," he said.