The U.S. investment fund Texas Pacific Group (TPG) Capital is negotiating with the Russian government to acquire 10% stake in Russia’s second largest bank VTB, the state plans to sell by year’s end. This writes the newspaper Kommersant, citing its sources by the government. If the deal is done, the U.S. fund may become the largest minority shareholder of VTB Bank (Foreign Trade Bank), in which the state currently has a share of 85.5%. According to preliminary estimates 10 percent of the capital of VTB may cost 2.4 to 3.1 billion dollars. Data to Release on Monday on the issue of selling a package of 10% of the shares of VTB had a meeting with Deputy Prime Minister Igor Shuvalov. Experts explain that if that deal with U.S. fund is implemented, this would have happened to “circumvent” the standard procedure of privatization in Russia, “for which there is a way. During the meeting in question, according to an inside source, it became clear that so far the major potential strategic investor for VTB is TPG Capital, which has said it intends to bring the transaction to a group of nearly 40 other co-investors.
The Russian edition recalls that the idea of selling shares of VTB in the country to cover part of the budget deficit is the Deputy Prime Minister Alexei Kudrin. In early September by the Russian Finance Ministry reported that the Government may by the end of this year to sell 10% stake in VTB to a strategic investor, and then over three years to sell another 25% of its shares. According to government sources quoted informally by Kommersant, Prime Minister Vladimir Putin has approved in principle the application of the management of VTB to sell 10% stake in the bank’s group of investors led by TPG Capital and is now negotiating the details of the transaction. According to unofficial information, the Ministry of Economic Development of Russia insists that as an organizer of the transaction for the sale of shares of VTB to attract Russian or Merrill Lynch “ВЭБ-Capital, a Russian Finance Ministry has already undertaken a Russian law firm to represent its interests in preparation of legal transaction. TPG was founded in 1992 and is one of the largest private equity funds worldwide, managing assets of approximately $ 40 billion. Since last year, VTB Capital and TPG Capital together have about 30% of the capital of one of the largest chains in Russia for the sale of household goods.

Tags: bank, investment fund, Kommersant, Russia, Russian bank, TPG Capital, VTB

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