VTB Group, Russia’s second-largest lender, said investors including sovereign wealth funds in Norway, Qatar and Azerbaijan have agreed to buy all $3.3 billion of new shares it’s selling to increase capital.
The bank has orders from new and existing shareholders, including Norges Bank Investment Management, the world’s largest sovereign fund, and Qatar Holding LLC and Azerbaijan’s State Oil Fund, Moscow-based VTB said today in a statement.
VTB plans to sell the stock in Moscow to boost regulatory capital depleted by acquisitions including OAO Bank of Moscow and OAO TransCreditBank and a buyback of minority investors. The share sale will lift its Tier 1 Capital ratio to 11.9 percent from 10.3 percent at the end of March, VTB said.
“We are delighted to announce the capital increase and are pleased with the transaction structure,” Andrey Kostin, VTB chairman, said in the statement. “Binding commitments to subscribe from major global investors have allowed us to secure our capital-raising targets.”
The state-run bank is selling 2.5 trillion new shares at 4.1 kopeks apiece, VTB said on April 26. The government stake of 75.5 percent in VTB is expected to fall to 60.93 percent following the placement, VTB said today. Buyers of the new shares won’t be eligible to receive 2012 dividends, according to the statement.
VTB’s shares erased an earlier loss of as much as 4 percent, gaining 2.7 percent to 4.66 kopeks by 12:30 a.m. in Moscow. The bank’s market value has plunged about 70 percent since it raised $8 billion selling stock in an initial public offering in 2007.
“VTB is trading at the price level of a distressed asset, but I don’t think it is a distressed asset,” Olga Naydenova, a banking analyst at Moscow-based brokerage BCS Financial Group, said by telephone. “It’s really cheap and it might be a good time for these funds to get in.”
Jamala Aliyeva, head of the press service for Azerbaijan’s State Oil Fund in Baku, confirmed it was investing. Mette Fossum Beyer, spokesman at Oslo-based Norges Bank, which has $714 billion under management, declined to comment on the fund’s individual investments. A spokesman for the Qatar Holding didn’t immediately return a telephone call.
VTB Capital and Citigroup Inc. were named as joint global coordinators and joint bookrunners, while Bank of America Corp. and JPMorgan Chase & Co. are joint lead managers, according to the statement.
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