In compliance with the government's decision, Vneshtorgbank, which is Russia's second-largest bank in terms of assets and equity, approved last December the placement of additional shares worth 90-120 billion rubles (about $3.5-4.6 billion) through an open subscription on the Russian market and abroad in the first half of 2007.
Vneshtorgbank will apply to the Russian financial market regulator April 10 or 11 for the issue of Global Depositary Receipts (GDRs) as part of its global share offering scheduled for May, VTB Senior Vice-President Nikolai Tsekhomsky said.
VTB may fail to sell the entire volume of its newly issued shares as part of its global offering, Vneshtorgbank CEO Andrei Kostin said.
The additional share issue totals 24.97% of VTB's charter capital, Kostin said.
"But this does not mean that this volume will be sold in full during the global offering. This is the maximum amount," Kostin said.
The Russian government is VTB's key shareholder, holding 99.9% of its stock. After the share placement, the government's stake in Vneshtorgbank is expected to drop to 75% plus one share.
VTB's stock will be offered only to professional investors on the London Stock Exchange (LSE) and both to professional market participants and individuals in Russia, Kostin said.
Vneshtorgbank earlier said VTB would accept applications from individuals for its offering from April 9 through May 7, with the minimum price of bids totaling 30,000 rubles (about $1,153).
"We have decided this is the optimal sum, making it possible to ensure a qualitative selection of investors, i.e. persons who are really interested in investment and can act as qualified investors. On the other hand, this threshold is not high for interested individuals to participate in the public offering of our shares," Kostin said.
The program of VTB's borrowings in 2007 totals more than $8 billion and will not be adjusted following the results of the bank's global share offering, Kostin said.
VTB's share placement follows the share offering by state-run retail savings bank Sberbank.
Sberbank held its domestic rights offering of 3.5 million new shares at 89,000 rubles (about $3,396) per share through open subscription between February 22 and March 24 to raise 230.24 billion rubles (about $8.86 billion) to meet growing demand for loans, the bank's press office earlier said.
Overall, Sberbank placed 2,586,948 shares or 73.9% of its new share offering, the bank's press office said.
