By Ivan Anderzhanov in Moscow
The European Bank for Reconstruction and Development (EBRD) has confirmed it will buy a 11.7 % stake in Russia’s privately-owned PromSvyazBank for 4.6 billion roubles ($159.4m).
Reports had been circulating since mid-October the the EBRD would take a minority stake in PromSvyaz.
Brothers Alexey and Dmitry Ananiev own almost 85% of Promsvyazbank, while Germany’s Commerzbank controls the remainder.
The deal is the the largest EBRD investment to date in the capital of a Russian bank. The investment will entitle the EBRD to nominate a director to the board of directors of the bank.
When completed, the deal would give the EBRD and Commerzbank sufficient shares jointly to create a blocking minority stake of over 27%.
Nick Tesseyman, the EBRD’s business group director for financial institutions, said the transaction is aimed at strengthening the capital base of a long-standing partner of the EBRD in order to support its business in the current difficult environment.
He said: “Providing equity for a systemic bank should send an important message helping to boost confidence in good Russian names at a time when many financial markets are virtually closed and most investors still display extreme risk-aversion.”
The EBRD is an equity investor in 11 Russian banks and once this deal is completed, Promsvyazbank will become the 12th.
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