Bank “Peresvet”, the main shareholder is the Russian Orthodox Church, will hold additional issue of shares and conversion of all outstanding preferred shares into ordinary, according to the materials of the Bank. The decision on the additional issue on the eve adopted by the Board of Directors of the credit institution. Now the capital of the Bank consists of 1,364 million preference shares with a nominal value of RUB 329 each. The conversion to ordinary shares scheduled a 1:1 ratio.
The Bank also announced that shareholders will discuss the question of the issuance and conversion into shares of the subordinated bonds. Terms of issue the Bank does not disclose.
Experts believe that plans for “overexposure” to replenish the authorized capital due to the “prefs” and to issue subordinated bonds talking about the beginning of preparation to the procedure of financial recovery.
Plans to issue subordinated bonds, which are accounted for in the Bank’s capital is likely to mean that they will be converted liabilities of creditors, says Director of financial institutions Fitch Raitings Alexander Danilov. According to him, it’s part of the procedure of the bail-in. I agree with him, the analyst of rating Agency S&P Roman Rybalkin. “Given other plans of the Bank (approval of major transactions and the approval of related party transactions) we may certainly presume that we are talking about converting liabilities into capital and preparation for bail-in,” said he .
Conversion of preferred into common stock also may be associated with the preparations for bail-in, analysts say. According to Danilova, it must be followed by the conversion of debt (deposits, bonds) in essentially an interest-free loan/sub debt, resulting in IFRS statements the Bank has a profit that will compensate for the loss of capital.
Rybalkin indicates that the decision on converting of preference shares in ordinary is a technical, in particular, in the case of reduction of adequacy ratio core capital H1.1 below the minimum. Previously reported by the Bank of Russia, indicating that according to statements of the Bank, his figure H1.1 reached the level below 5,125%, this level is the minimum for banks, which on the balance sheet subordinated loans.
“During the conversion of debts of creditors in subordinated bonds or Deposit capital replenishment takes place gradually, as the Bank earns placing money in profitable instruments (e.g., OFZ). Therefore, even after converting debt into equity, the Bank can violate norms on capital”, — said Danilov.
Thursday, December 29, it became known that the largest creditors of the Bank appealed to Prime Minister Dmitry Medvedev with the request to support the rehabilitation of the Bank. The turnaround can be belonging to structures “Rosneft” the all-Russian regional development Bank (RRDB). Shareholders are willing to convert into capital of the Bank 90% of the requirements in placing a 15-year subordinated Deposit and the remaining amount may be provided by the Bank of Russia. According to preliminary data, the “hole” in the balance sheet of the Bank “Peresvet” can be 80-85 billion rubles.
A number of representatives of the largest shareholders of “Peresvet” confirmed the fact of appeal to the Prime Minister.
In the Bank “Peresvet” from October this year, has a temporary administration, appointed by the Central Bank in connection with the fact that he did not satisfy the requirements of creditors. The main shareholder is the Russian Orthodox Church. According to statements of the Bank “Peresvet” on his accounts, placed the funds structure “inter RAO” and “RusHydro”, the Board of Directors which includes the head of “Rosneft” Igor Sechin.