Sberbank Prepares $10-Billion Emission
The Savings Bank of Russia (Sberbank) is preparing a supplemental stock emission that will increase its capital by 25 percent. Based on the market value of the stock, the volume of the emission will be about $10 billion. It will be the second largest procurement of capital ever by a Russian company, following the Rosneft IPO.
First deputy chairman of the governance board Alla Aleshkina announced the bank's plans at a meeting yesterday with banking analysts devoted to the bank's performance in the first ten months of the year. According to one participant in the meeting, Aleshkina noted that the Sberbank supervisory council has approved an addition issue of 109 million shares, although the maximum volume of the supplemental emission that Sberbank plans to issue in the coming months is 4.7 million shares. In that case, the authorized capital of the bank will grow by 24.7 percent, and the volume of funds attracted, based on the market price of the stock, will be about $10 billion.
Sberbank is declining to comment officially on that information. A Kommersant source at the Central Bank said that first deputy chairman of the Central Bank Alexey Ulyukaev is personally handling the question. At present, the final parameters of the emission are being discussed and a decision will be made with the participation of Sberbank head Andrey Kazmin.
Sberbank authorized capital now stands at 60 billion rubles, that is, 19 million common shares with face values of 3000 rubles and 50 million preferred shares with face values of 60 rubles. The bank's own funds amounted to 326 billion rubles as of October 1, 2006. The Central Bank of Russia is the main shareholder in Sberbank, with 60.57 percent of the bank's stock.
Analysts are unanimous in their opinion that the goal of attracting addition capital is first and foremost meeting Central Bank standards. “Otherwise, Sberbank will be forced to slow its pace of growth, which would not be to its advantage,” one expert explained. Aleshkina mentioned the same task at yesterday's meeting. Sergey Vasilyev, member of the National Banking Council and chairman of the Federation Council Committee on Financial Markets, noted that a “holding a supplemental emission would allow that problem to be solved in a few years.” The main concern is meeting the norms for the bank's funds (N1) and the maximum risk for a group of related borrowers (N6). Raising Sberbank's capital by $10 billion would make it possible to increase the volume of credit financing for such state companies as Gazprom and RAO UES of Russia by $2.5 billion.
Sberbank has taken measures to meet Central bank requirements before. At the beginning of 2001, the bank issued a supplemental emission of 5 million shares, thus increasing its capital by 36 percent. At that time, several minority shareholders were opposed to the emission due to fears that their shares would be watered down. Those fears proved ungrounded, however. Moreover, the price of a share rose by 20 percent in the course of the supplemental emission. Yesterday the Troika Dialog investment company raised its estimate of the fair price for a Sberbank share by 20 percent.
Sberbank shareholders, including the Central Bank, have a proprietary right to buy shares. If the Central bank does not use its right, its share in Sberbank will fall to 48.5 percent and it will lose control over the largest crediting organization in Russia. Analysts reject that possibility. “The Central Bank will not allow its share in Sberbank to be reduced or control to be lost over it under any circumstances,” MDM Bank managing director for analysis Alex Kantorovich averred. Sberbank head Kazmin told Kommersant in an earlier interview that neither the bank itself nor its foreign shareholders “are at all interested in reducing the share of the Central Bank in the capital of Sberbank.”
If the volume of the supplemental emission is approved at 4.7 million shares, Sberbank will have the chance of nearing, if not breaking, the record for Russian companies for attracting funds. That record is now held by Rosneft, which attracted $10.6 billion this summer. “By volume of funds attracted, the upcoming emission is comparable with Rosneft's,” said Vladimir Martynenko, portfolio manager at UK Rost Kapitala. “Like Rosneft, Sberbank will try to place its shares on foreign markets as well, since raising that sum in Russia would be problematic.”
Yulia Chaikina, Igor Moiseev, Elena Kiseleva
All the Article in Russian as of Oct. 24, 2006
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