VTB gets 70% minority support in Bank of Moscow, plans no offer

Russia’s state-controlled VTB, which owns 46.48% in Bank of Moscow, has gained enough support from its minority shareholders to control the bank and has no plans to make an offer to them, VTB head Andrei Kostin said on Friday.

“We have enough support from other shareholders for VTB to have operational control of Bank of Moscow,” Kostin told a news conference, adding VTB had the support of 70% of shareholders who also supported former VTB employee Mikhail Kuzovlev for the post of bank president. Elections will be held for the post on April 21.

In February, VTB bought 46.48% of Bank of Moscow, Russia’s fifth largest bank by assets, from the Moscow government for 103 billion rubles as well as a 25 percent stake in insurer Stolichnaya Strakhovaya Gruppa, which owns 17.3 percent in Bank of Moscow. VTB said it wanted to buy a 100% of the bank by summer but the plan hit a snag as the bank’s President Andrei Borodin and his aide Lev Alaluyev hold 20.3% and were reluctant to sell.

Borodin is a close ally of former Moscow mayor Yury Luzhkov who was fired last fall by President Dmitry Medvedev over a loss of trust. VTB made its acquisition of Bank of Moscow stake in February.

Borodin fled to London this week and offered VTB purchase of his stake, based on a market capitalization of around $6 billion, down from his previous valuation of between $8.2 billion and $9.6 billion. He gave VTB six days to decide.

Kostin said VTB was studying Borodin’s proposal but starting management of Bank of Moscow was more important.

“I do not think it is a six-day ultimatum. Mr Borodin can enjoy his shareholder status,” he said.

MOSCOW, April 8 (RIA Novosti)

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