“U.S. banks are afraid to participate in the forthcoming privatization of Bashneft packages, ALROSA and VTB, they are not willing to take the risk that it will not be approved by the state Department”, — told a source in one of the Western investment banks. This information was confirmed by the top Manager of us Bank, who noted that most of the American banks, whose offices are opened in Russia, is not going to participate in privatization. “Banks simply have not submitted their applications for fear of history repeating with the Russian Eurobonds”, — he said.
In late February, U.S. authorities have warned major banks of the USA from participation in the government bonds of Russia. The Finance Ministry and the US state Department has issued a special warning, having received from banks questions about whether they can participate in placing the bonds. The American authorities considered that such transactions would be contrary to the sanctions policy.
In mid-March the Ministry of economic development distributed to Russian and Western investment banks the proposal to take part in “big privatization” — the organization of sale of shares of “Bashneft”, ALROSA and VTB. To give an answer they had until March 21. As told a source in the Western investment Bank, the list of participants are European participants, in particular, the Swiss Bank. However, he doubted the success of privatization. “It is unlikely that someone from the officials will take responsibility to sell strategic enterprises with a huge discount to the market. There is always the risk that then the people from the Investigative Committee will ask the economic meaning of transactions,” he says. According to the investment banker, stocks of companies that the Russian government wants to privatize in 2016, now trading significantly below the market cost 2-3 cheaper than their foreign counterparts. “To carry out the placement on such terms as to decide a few banks, because they have to explain to investors all the risks associated with the purchase of the shares,” he added.
Also, according to the financier, the demand for minority stakes “ALROSA, Bashneft and VTB is unlikely to be high. “There are few people willing to become hostages to control the businesses of these companies of the Russian authorities”, — he explained.
The number of people wishing to participate in the privatization of state-owned companies that have U.S. Bank, said one of the bankers. Another market heard that it might be Citi, which had planned to apply. Filed it and the person does not know. In the Citibank declined to comment on the possibility of participation in privatisation deals.
In Bank of America, Goldman Sachs, Morgan Stаnley and JP Morgan declined to comment.
On a government list of potential organizers of the privatization includes Goldman Sachs, JP Morgan, Credit Suisse, Deutsche Bank, Morgan Stanley, Barclays, RBS, BNP Paribas, UBS, Citi, UniCredit, Societe Generale, BofA-ML, Raiffeisen, Sberbank CIB, “VTB Capital”, “VEB Capital”, Gazprombank, “the Renaissance the Broker”, Alfa-Bank, MDM Bank and “the Russian auction house”.
The Minister of economic development of Russia Alexei Ulyukayev said that he considers unlikely major privatization deals until the summer. “Still unlikely until the summer, because the selection of consultants, then the necessary procedures — road show, reporting. Therefore still before the summer is difficult, probably”, — quotes the Minister TASS. Earlier Tuesday, Deputy economic development Minister Nikolai Podguzov told reporters that their application was filed more than 10 banks, among them foreign. The selection is planned to be completed in early April.