Nov. 24 (Bloomberg) -- OAO Sberbank may seek to lower the purchase price for Oesterreichische Volksbanken AG’s eastern European unit because of losses caused by Hungary’s foreign- currency loan law, two people familiar with the deal said.
Sberbank, Russia’s largest lender, is arguing that losses at Vienna-based Volksbanken International’s Hungarian unit are reducing equity and therefore the sellers must either inject fresh capital or accept a lower price, according to the people, who declined to be identified because the process is private.
One of the people said the effect of both measures would cut the price by about 15 percent to about 500 million euros ($668 million) from the 585 million-euro minimum agreed in September. It would be the second time VBI’s price was reduced.
Hungary’s government is forcing banks to swallow losses on Swiss franc-denominated mortgages to ease the burden on borrowers. Volksbanken is under heightened pressure to sell assets after failing the European Union’s bank stress test in July and announcing in October it expects a 750 million-euro loss this year.
A decision could be made within the next few days, the people said. Der Standard, an Austrian daily, earlier reported that Sberbank wanted to lower the price to 500 million euros to compensate for the Hungarian losses.
A Volksbanken spokesman said the conditions of the sale were stipulated when the agreement was signed, and the Austrian bank is expecting all parties to comply with those conditions. He declined to comment further.
Sberbank’s press service didn’t answer the phone when called after Moscow office hours. Responding to a request for comment on a Vedomosti story on Nov. 16 that Sberbank was seeking a lower price, Olga Laletina, a Moscow spokeswoman for the bank, said that “preparation of the response required additional work and additional time” and that Sberbank would send a reply “as soon as the answer will be agreed.”
Volksbanken, which is majority owned by a group of 62 regional cooperative banks in Austria, holds 51 percent of VBI. Germany’s DZ Bank and WGZ Bank jointly own 24.5 percent, as does France’s Groupe BPCE.
Sberbank is buying VBI, excluding its unit in Romania, to expand outside the former Soviet Union. It agreed in September to pay 585 million euros to 645 million euros, depending on the company’s performance. That was already a reduction from the previous 670 million euros in a preliminary July agreement.
--With assistance from Jack Jordan, Torrey Clark and Jason Corcoran in Moscow. Editors: Keith Campbell, Frank Connelly
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