7 Jun 2023 15:28

VTB plans to raise 94 bln rubles during SPO, will cover capital requirements for 2023 and 2024

MOSCOW. June 7 (Interfax) - VTB plans to raise 94 billion rubles during a secondary public offering on the open market that should cover the state bank's capital requirements for 2023 and 2024, Dmitry Pyanov, VTB Deputy Chairman of the Management Board and Chief Financial Officer, told reporters.

"We are operating on the understanding that we have either already been paid, or payment under the right of first refusal will be rendered by June 8, totaling 94 billion rubles," Pyanov said.

The bank boosted capital in the first quarter by 150 billion rubles as part of a "government" SPO, converting it into shares of a subordinated loan from funds of the National Wealth Fund and including shares of Russian National Commercial Bank in the capital, thereby increasing the share of the Russian Federation in the capital of VTB from 60.9% to 76.4%. The government's share will decrease to 61.8% upon the results of the SPO, Pyanov said.

He did not disclose the anchor investor in the SPO or their stake in the additional issue, saying only that it was a Russian non-state institutional investor. "We are a sanctioned issuer and we believe there are still risks that our counterparties may be sanctioned and we do not want to expose our new investor to this risk," he said, adding that the new shareholder's stake in VTB's capital would not be disclosed either.

Pyanov said the bank did not actively market the SPO. "It was a conscious choice. We might have fallen a few billion short in terms of potential demand. But what we are proud of is the low volatility of shares. That is, shares fluctuated by up to 5% when news about the deal broke, and this is very low value in the framework of SPOs by public issuers on the stock exchange. It was a conscious choice not to give the opportunity to short sell and add volatility to our shares, perhaps at the cost of a small shortfall in demand and lack of active marketing," he said.

"By and large we, as the issuer, are very satisfied with the issue," Pyanov said.

He said VTB met its capital requirements for 2023 and 2024 with two share offerings. "We are not planning any more corporate inorganic actions related to attracting additional capital," he said.

The funds raised will have a positive impact on capital and will be used to waive regulatory easing that applies to the entire sector until 2024, Pyanov said.