Shareholders plan to challenge the sale in court, saying they should also have a chance to buy the additional shares
Little more than a week has passed since an agreement was reached to sell a controlling stake in one of Ukraine’s top ten banks to Italy’s Banca Intesa for over a billion dollars. However, minority shareholders in Ukrsotsbank, over 85 percent of which is owned by companies controlled by Ukrainian tycoon Viktor Pinchuk, are planning to challenge the sale in court.
The $1.16 deal, inked on Feb. 14, stipulates an additional $60 million issuance of shares, to be bought by Banca Intesa. Following the share issuance and final closing, the Italian bank would bring its ownership in Ukrsotsbank to 88 percent.
But minority shareholders claim they should also have a chance to buy the additional shares.
One minority shareholder is Cyprus-registered Tempsford Investments, which reportedly holds a 7.6 stake in Ukrsotsbank. Tempsford Investments spokesperson Larysa Borysenko used to represent Mykhailo Shchegolevsky, who owns minority stakes in companies that Pinchuk controls and has been struggling for greater control since the two men quarreled last year, according to a Feb. 16 article in the Financial Times.
Another minority shareholder that has threatened to sue is Dnipropetrovsk-based Slavutich Capital, whose chairman of the board, Gennady Korban, questioned the transparency of the sale agreement in statements made this week.
Korban and Slavutich Capital have been linked in media reports with the Dnipropetrovsk-based Privat business group, which has been a fierce business foe of Pinchuk, the son-in-law of former President Leonid Kuchma.
Pinchuk and Privat have been ranked as two of Ukraine’s five largest business groups with assets in Ukraine valued at billions of dollars.
When Pinchuk’s 2003 purchase of the lucrative Nikopol Ferroalloy Plant was overturned through court rulings, the Privat group, which owns a blocking stake in the plant, made a move for it.
Vladyslav Ostapenko, head of investment and banking at an investment firm, Sokrat, believes that Ukrsotsbank minority shareholders want to increase the value of their own shares or “they will try to block the sale itself through lawsuits.”
Nikita Poturaev, an advisor to Interpipe Corporation, said the minority shareholders’ actions don’t make sense from the economic point of view.
“Two shareholders in the bank declared their wish not only to contest the additional shares issuance, but also to prevent the deal itself, which has increased the value of Ukrsotsbank shares significantly”, he said.
According to Poturaev, the second share subscription is always held on a first-come basis, but Tempsford Investments were late and less active than other investors. He said all shareholders were informed of the terms beforehand, but the line started forming only the day before the subscription because buying shares on the eve of another rise in their price is very profitable.
Poturaev said that a court seizure of the shares won’t exert any influence on the deal anyway, as Banca Intesa is buying the companies that own the Ukrsotsbank shares rather than the shares themselves.
“For this reason,” he said, “the arrival of a big and prestigious European bank like Banca Intesa to Ukraine can be regarded as an accomplished fact.”
