PrivatBank sells Moskomprivatbank for UAH 1.9 billion

PrivatBank, the largest by assets in Ukraine, sells a Russian subsidiary, Moskomprivatbank, the press service of the parent structure said yesterday. The purchaser of the 100% stake in Moscomprivbank became Binbank, which is in the top 30 of the largest Russian financial institutions, of which Mikayil Shishkhanov is the main shareholder. Recall that in September 2011, after a series of scandals, he bought out a 95% stake in Inteko, formerly owned by Yelena Baturina, wife of ex-mayor of Moscow Yuri Luzhkov.

Shishkhanov expects to complete the transaction within two weeks, after which the bank will change the sign to Binbank. Moscomprivatbank has worked under this brand for 20 years: in 1994 it was created on the basis of the representative office of Ukrainian PrivatBank in Moscow. The new shareholder acquired Privat’s subsidiary in order to expand its retail business. The development of financial institutions is planned to send 12 billion rubles. (3.8 billion USD). This amount as a loan will provide the Deposit Insurance Agency. The resources will be used to support the liquidity of Moskomprivatbank, as well as to implement a project to create an independent IT infrastructure of a credit institution, Binbank reports.

Value added

The amount of the transaction is about 1.9 billion UAH. “The cost of Moscomprivatbank is determined on the basis of the market valuation of the asset and, taking into account the subordinated loan, will be about 6 billion rubles”. The multiplier slightly exceeded one equity. “The price of 6 billion rubles high enough for this bank. I think the real cost is 20% lower. And considering the situation in which the bank found itself, it seems to be just a space one” says Volodymyr Kundzich, managing partner of the investment-banking company Rada Capital. The bank, which introduced a temporary administration, to sell for such a price is just the wonders of the art of negotiation, he added.

“Calculations will be made from cash and Ukrainian assets of the main shareholder of Binbank, Mikayil Shishkhanov”  the Binbank website reported. Inteko Group of Companies works in Ukraine. It is represented by specialized construction, manufacturing, trading enterprises. Among its projects, in particular, is the light-music fountain in Novopecherski Lypkah. “Companies are developing dynamically and have been successfully working for many years both on the territory of Ukraine and in the CIS countries” the group’s website says, but the press service refused to provide information on the number of companies and owners of Ukrainian Inteko.