VTB Group rebounded, headed for the biggest gain on Russia’s benchmark stock gauge, after Reuters reported Qatar’s sovereign wealth fund hired UBS AG (UBSN) for advice on a possible $3 billion investment in the bank.
The bank gained as much as 1.7 percent after falling 2.4 percent earlier and traded up 1.3 percent at 5.56 kopeks by 3:24 p.m. in Moscow. The amount of shares traded was 48 billion, equivalent to about 1.4 times the three-month average. The Micex tumbled 1.2 percent.
Talks between Qatar and VTB are “very advanced,” Reuters reported. The Telegraph reported earlier this month that VTB will issue $1.5 billion in new equity and $1.5 billion of mandatory convertible bonds to the wealth fund. VTB is meeting sovereign wealth funds and other investors to sell new shares totaling at least $3 billion, Russia’s First Deputy Prime Minister Igor Shuvalov said in an interview last month. VTB hasn’t received an investment offer from Qatar, RIA Novosti cited him as saying Feb. 21.
“If this deal happens, it’ll be very positive, because then VTB won’t have to sell as many shares to the general market, creating an overhang,” Natalia Berezina, an analyst at UralSib Capital in Moscow, said by phone.
Russia’s second-biggest bank is working on a capital increase with Citigroup Inc., Reuters reported today, citing two people with knowledge of the matter who it didn’t identify. VTB’s press office declined to comment on today’s report by phone.
In February 2011 VTB raised $3.3 billion by selling a 10 percent stake at 9.1468 kopeks a share, below its 2007 initial public offering price. Shuvalov said last month VTB will not issue shares at a price less than what it secured in 2011.
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